Rangel's conflict problems grow

by Frank James

House Speaker Nancy Pelosi has a growing problem and it comes in the form of the raspy voiced Rep. Charlie Rangel, chairman of the House Ways and Means Committee.

The New York Times has a very strong story today which chronicles what is a clear appearance of conflict of interest on the part of Rangel who chairs the House Ways and Means Committee.

The bottom line: Rangel supported keeping a tax loophole that was important to a wealthy oil-drilling executive who pledged $1 million to a City College of New York public-policy school that will bear Rangel's name.

As the Times reports:

Representative Charles B. Rangel has helped raise $11 million for a City College of New York school of public service to be named in his honor. In recent months, as questions have emerged about his fund-raising, he has insisted that he has kept his efforts to attract donors scrupulously separate from his official duties in Congress.

But Congressional records and interviews show that Mr. Rangel was instrumental in preserving a lucrative tax loophole that benefited an oil-drilling company last year, while at the same time its chief executive was pledging $1 million to the project, the Charles B. Rangel School of Public Service at C.C.N.Y.

The company, Nabors Industries, was one of four corporations based in the United States that were widely criticized in 2002 and 2003 for opening offices in the Caribbean to reduce their federal tax payments. Mr. Rangel was among dozens of representatives from both parties who bitterly opposed those offshore moves and, in 2004, pushed unsuccessfully for legislation to make the companies pay more tax.

What is clear is that Mr. Rangel played a pivotal role in preserving the tax shelter for Nabors and the other companies in 2007. And while the issue was before his committee, Mr. Rangel met with Mr. Isenberg and a lobbyist for Nabors and discussed it, on the same morning that the congressman and Mr. Isenberg met to talk about the chief executive's potential support for the Rangel center.

If you're Pelosi, this isn't not good. House Democrats came into the majority in 2006 promising to end the culture of corruption that had exploded under Republican rule.

While what we know of Rangel's behavior shouldn't even be mentioned in the same sentence as former Republican congressman Randy "Duke" Cunningham who was convicted and now serving federal prison time, his actions still cut against the spirit of what Democrats campaigned on since there is clearly an appearance of a conflict of interest.

In an admittedly quick perusal of the
House Ethics Manual , I didn't find anything that speaks directly to a situation like Rangel's, for instance, he didn't receive a personal gift from Isenberg.

But if we can stretch the definition of a gift to include someone donating money to a one of a lawmaker's pet projects, then perhaps the following section of the manual would apply:

Other prohibitions. Under the Code of Official Conduct, a Member, officer, or employee is expressly prohibited from accepting any gift ―except as provided by clause 5 of rule 25.
9 The Code of Official Conduct also prohibits a Member, officer, or employee from receiving any benefit ―by virtue of influence improperly exerted from his position in Congress.
10 Similarly, the Code of Ethics for Government Service
(¶ 5) admonishes every Government employee, ―Never discriminate unfairly by the dispensing of special favors or privileges to anyone, whether for remuneration or not; and never accept for [oneself] or [one's] family, favors or benefits under circumstances which might be construed by reasonable persons as influencing the performance of his governmental duties. This Committee has cautioned all Members ―to avoid situations in which even an inference might be drawn suggesting improper action.
11 Members, officers, and employees must always exercise discretion concerning the acceptance of gifts or favors from persons who are not relatives, and particularly gifts or favors that would not have been offered ―but for the individual's position in Congress. Among the factors that one must consider are the source and value of a gift, the frequency of gifts from one source, the possible motives of the donor, and possible conflicts of interest with official duties.

It seems fairly straightforward that under House ethics rules, a lawmaker isn't supposed to accept any benefit for himself or family that would create even the appearance of a conflict. Of course, it's up to the House Ethics Committee to determine if Rangel violated those rules in this instance.

But coming as it does after other reports about Rangel writing letters on his official House stationery to potential donors to the public-policy school and his failure to pay taxes related to a house in the Dominican Republic, Rangel is becoming an ever bigger target for Republican and good-government critics.

Adding to Pelosi's Rangel problems is that his ascension to chair one of Congress's most powerful committee, the first African-American to do so, was welcomed by many blacks who wouldn't be pleased with the speaker if she were seen to be leading efforts to dump him. But she undoubtedly has a big problem on her hands.

The Ways and Means Committee is going to be a major player in any new tax legislation that will be part of the economic recovery efforts. The question many will be looking for an answer to is how effective will it be with Rangel under a cloud and spending some part of his energy fending off his critics?