Rangel Takes On The New York Times

He may fear “death by a thousand cuts” — a stream of damning newspaper stories, private grumblings from Democratic colleagues, a pending ethics investigation — but insiders say House Ways and Means Committee Chairman Charles B. Rangel has no intention of giving up his powerful post.

To the contrary, the New York Democrat is launching a concerted counterattack against The New York Times, which reported last week that Rangel helped retain a multimillion-dollar tax loophole for an oil drilling company at the same time that the company’s CEO was pledging $1 million to the Charles B. Rangel Center for Public Service at City College of New York.

House Speaker Nancy Pelosi, meanwhile, is denying GOP charges that she has interfered with the House ethics committee’s investigation into Rangel by promising that the panel’s probe would be completed by the end of the 110th Congress.

Although Pelosi said last week that she’d received “assurances” that the committee would finish its investigation before Jan. 3, her office says she was referring to assurances from her own staff that the committee typically completes its investigations that quickly — and not to any inappropriate, inside communication she received from committee members themselves.
That Pelosi’s office felt obliged to respond to the GOP complaints underscores the degree to which the continuing furor over Rangel — with new allegations of improprieties now surfacing regularly — has become a major problem for the speaker and her colleagues in the Democratic leadership. Republicans have tried to tie Democrats to Rangel, and some Democrats have begun to say privately that Rangel should step down in order to allow them to press ahead, undistracted and untainted, with President-elect Barack Obama’s plans for dealing with the economy.

Rangel’s ethics problems grew significantly worse last week after the Times reported that Rangel met on Feb. 12, 2007, with Eugene Isenberg, the CEO of oil drilling company Nabors Industries, about retaining a tax loophole worth millions of dollars to the company. On the same morning, the Times said, Rangel and Isenberg discussed Isenberg’s $1 million pledge to the Rangel center.

Isenberg first made a $100,000 donation to the Rangel center in December 2006 and followed that up with another $100,000 on Feb. 7, 2007, according to the Times. 



Rangel has vehemently denied any link between Isenberg’s donation and his committee’s action — or even that he was aware of Isenberg’s contribution, — and aides to Rangel have raised questions about the accuracy of the Times story. Rangel, however, has yet to fully explain why he met with Isenberg and his lobbyist, Ken Kies, on the same day as a committee markup. Neither Isenberg nor Kies, considered by many to be the top tax lobbyist in Washington, were available for comment on Monday.

Kies and Isenberg have never donated to any of Rangel’s fundraising committees, although Kathleen Kies, Kies’ wife, gave $4,000 to Rangel’s reelection campaign on June 29, 2007, according to Federal Election Commission records.

On Monday, Rangel’s aides said that the Ways and Means Committee in 2007 never considered eliminating the loophole that benefited Nabors. Thus, they say, Rangel could not have blocked the measure.

“The New York Times reporter repeatedly ignored facts and statements provided by tax policy experts that Chairman Rangel played no role in defending this tax loophole,” said Matthew Beck, communications director for the Ways and Means Committee. “In fact, the Nabors Corp. was grandfathered into the benefit by those who negotiated the 2004 Republican Jobs Act, a group that did not include Chairman Rangel.”

 

The Senate Finance Committee did include the so-called “inversion” provision in it own tax bill in early 2007, but it later dropped the measure prior to a House-Senate conference, according to Beck.

“Contrary to the reporter’s assertion, the 2007 attempt to retroactively change the law did not come before the Ways and Means Committee and was voluntarily dropped by Senate Finance Committee staff before final deliberations on the minimum wage and small business tax relief bill. Attempts to suggest otherwise are more than irresponsible; they are patently false,” Beck added.

The Times did not immediately respond to a request for comment.

It is unclear whether the ethics committee is looking into this latest allegation against Rangel — or if it was even aware of the matter before it was reported. Ethics committee investigators have been interviewing Rangel’s staffers for the past several weeks, according to people close to the congressman. Rangel’s lawyer did not return a call seeking confirmation on whether Rangel himself has met with the panel, although such interviews typically take place late in the ethics process.

“They have spoken to many of us. ... They have gotten to some people who are really low down on the totem pole,” said a Rangel associate who was interviewed in mid-November. “They are really serious. They almost never go that deep, I’m told.”

The ethics committee is looking into Rangel’s control of multiple rent-stabilized apartments in Harlem, as well as $75,000 in income from a Dominican Republic vacation home that Rangel failed to disclose or pay taxes on. But for Republicans, any Rangel probe that does not include review of the allegations set forth in the Times story would be incomplete.

“How serious can an ethics investigation be when you receive ‘assurances’ that it will be done in short order even though there are new allegations coming to light almost every week, and especially when the most devastating allegation — a direct quid pro quo for a donor — came to light just [last week]?” asked a House GOP aide. “It doesn’t pass the straight-face test.”

This source also said that Republicans on the ethics panel may not agree to end the probe by Pelosi’s deadline. With the ethics committee having five Democrats and five Republicans, there is no way for the panel to vote to end the investigation — or recommend action to the House — unless GOP lawmakers agree to do so.

Conversely, Republicans cannot force the investigation to continue into next year, which Democrats believe is the GOP’s real intention, without Democratic support. A stalemate between the two sides could result in the investigation fizzling out with no final report issued by the ethics panel, a move that would be a public relations disaster for the committee, Rangel and Democratic leaders.

Rangel is concerned that the recent revelations — which take the questions around him from the realm of sloppy bookkeeping to an alleged quid pro quo — could sour Pelosi’s support for him. Still, one adviser said, he has no plans to give up his chairmanship.

When asked whether Pelosi had any contact with Democrats on the ethics committee or staffers on the panel, Pelosi’s spokesman denied any such discussions had occurred.

“The speaker was relying on assurances from her staff that the ethics committee, in the past, has tried to wrap up matters pending at the end of a Congress,” said Brendan Daly, Pelosi’s communications director.

Another Democratic insider said Pelosi has “received no secret information” from the committee but did say the speaker was “very interested” in when the panel will complete its Rangel investigation.

Glenn Thrush contributed to this story.
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