The clock is ticking on tax cheat Charlie Rangel
By: Byron York
Chief Political Correspondent
September 1, 2009
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It hasn't gotten much attention amid news of Ted Kennedy, Obamacare and the worsening outlook in Afghanistan, but an extraordinary situation is developing in the House of Representatives. With each passing day, it's becoming more clear that the powerful committee chairman in charge of writing America's tax laws is a financial wheeler-dealer, a serial asset-hider, and a tax offender.
Rep. Charles Rangel has been in the House since 1971. He's as old bull as you get in the Democratic hierarchy, and he waited through 12 long years of Republican rule to take over as chairman of the Ways and Means Committee in 2007. Along with Speaker Nancy Pelosi and fellow Democratic power brokers Henry Waxman and Barney Frank, Rangel is playing a key role in the effort to push the president's health care, environmental, and financial initiatives through the House.
Last week, we learned that Rangel filed a grossly misleading financial disclosure report for 2007 -- failing to report at least half a million dollars in assets.
It turns out Rangel had a credit union account worth at least $250,000 and maybe as much as $500,000 -- and didn't report it. He had investment accounts worth about the same, which he also didn't report. Ditto for three pieces of property in New Jersey.
Beyond that, we've learned that Rangel has failed to report assets totaling more than $1 million on legally required financial disclosure forms going back to at least 2001.
The news comes on top of revelations last year that Rangel didn't report -- and didn't pay taxes on -- income from a villa in the Caribbean. In that matter, the Internal Revenue Service gave him sweetheart treatment; Rangel paid about $10,000 in back taxes but was not required to pay any penalty or interest.
Rangel's doings are under investigation by the House Ethics Committee, which so far hasn't taken any action. Democrats are standing behind their chairman, and minority Republicans can't do anything about it.
But they're still trying. In February, the GOP introduced a resolution calling for Rangel to be removed as chairman. It failed, 242 to 157.
The Republican leadership also wrote a letter to Pelosi urging that Rangel "step down from his Ways and Means chairmanship pending an investigation of his ethical lapses." That went nowhere, too.
And then there is H.R. 735, also known as the "Rangel Rule Act of 2009."
The brainchild of Rep. John Carter, a Texas Republican who spent two decades as a judge before coming to the House in 2002, H.R. 735 would require the IRS to give everyone the same kid-glove treatment it gave Rangel.
The bill's title is modeled on something known in Texas as the "Hobby Rule." In the 1970s, Bill Hobby, then the state lieutenant governor, was pulled over for drunken driving. Hobby was taken to the police station, but when his attorney showed up in the wee hours of the morning, authorities simply let Hobby go -- no bond, no nothing. That special treatment became a precedent for future drunken-driving cases, as lawyers cited the "Hobby Rule" to demand their clients be freed with no questions asked, just like Bill Hobby.
Thus the "Rangel Rule." Under H.R. 735, if you're caught cheating on your taxes, you would pay what you owe, then write "Rangel Rule" at the top of your return, and you wouldn't be charged any penalty or interest. That way, Carter said when he introduced the bill, ordinary taxpayers would be "treated with the same courtesy that, it seems, the IRS is treating the chairman of the Ways and Means Committee."
Of course Carter's bill doesn't have a chance. Democrats undoubtedly see it as a joke. But the Rangel case is very, very serious.
If you don't think so, just look at this, from the front page of the Oct. 28, 2008 Washington Post: "Sen. Ted Stevens of Alaska, one of Congress's most powerful Republicans, was convicted yesterday of lying on financial disclosure forms to conceal his receipt of about $250,000 in gifts and expensive renovations to his house. ..."
Stevens' conviction was later thrown out because of prosecutorial misconduct, but the message was clear: This is the kind of thing you can go to jail for.
Rangel appears to have hidden greater sums of money than Stevens allegedly did. Democratic leaders don't want to face it now, but it's just a matter of time before they're forced to admit they have a serious Rangel problem.
Byron York, The Examiner's chief political correspondent, can be contacted at byork@washingtonexaminer.com. His column appears on Tuesday and Friday, and his stories and blog posts appears on www.ExaminerPolitics.com ExaminerPolitics.com.
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