Rangel Used Leadership PAC Funds for Legal Fees

Rep. Charles Rangel (D-NY), whose House ethics trial is scheduled to begin tomorrow, used almost $400,000 in funds from his National Leadership PAC to pay legal bills to fend off corruption allegations. Rangel’s ability to retain high-powered lawyers helped him delay the Ethics Committee action for more than two years, and push his trial past the election.

Rangel appears to have violated House rules. Members of Congress may use funds from their personal re-election committees for legal expenses related to their official actions. The National Leadership PAC is not Rangel’s re-election committee but what is classified as a “leadership PAC,” the purpose of which is make contributions to other candidates. Up to and during his tenure as Ways and Means Committee chairman, Rangel distributed hundreds of thousands to his colleagues, many of whom donated the money to charity as Rangel became an embarrassment.

When he was not attacking NLPC during his August 11 speech on the House floor, Rangel complained that his legal expenses totaled two million. According to Federal Election Commission filings, Rangel paid $1.65 million to lawyers from his re-election fund, in addition to the money from his leadership PAC.

Most of the money went to the Zuckerman Spaeder law firm, but two payments of $100,000, one from the re-election fund and one from the leadership PAC, went to Washington lawyer Lanny Davis. Rangel retained Davis after NLPC exposed his failure to disclose, or pay taxes on, rental income from his Dominican Republic beach house. The relationship did not last long, probably because Rangel would not take Davis’ advice. Davis is the author of a book titled Truth To Tell: Tell It Early, Tell It All, Tell It Yourself, with advice on how public figures should react to scandal.

From his re-election fund, Rangel also paid $174, 303 to Watkins, Meegan, Drury & Co., a firm that specializes in forensic accounting. Rangel announced that he would retain a forensic accountant in the wake of the beach house controversy that prompted a more far-reaching scrutiny of Rangel’s finances. In August 2009, Rangel amended his financial disclosure forms to show hundreds of thousands in previously unreported assets and income.

The Ethics Committee must add Rangel’s use of leadership PAC funds for his legal fees to the currently pending 13 counts announced on July 22. The Committee must also investigate our allegations of cronyism and corruption related to Rangel obtaining earmarks for a New York group called Alianza Dominicana (Spanish for Dominican Alliance). The allegations were contained in a Complaint we filed on August 10, 2010.