by Andrew Zajac
White House chief of staff Rahm Emanuel's Washington lodging arrangements, a rent-free basement room in a Capitol Hill home owned by Rep. Rosa DeLauro (D-Conn) and her pollster husband, have inspired debate among tax experts and in Republican-leaning portions of the blogosphere.
One issue is whether Emanuel, who served in the House with DeLauro until early January, should have listed the room either as a gift or as income on his congressional financial disclosure forms. Emanuel's disclosure filings contain no mention of his use of the room.
A murkier question is whether Emanuel has a tax liability for the arrangement. The matter may have particular sensitivity in the early days of an Obama administration in which at least four picks for high posts have had confirmations delayed or derailed by tax irregularities.
A further complexity involves DeLauro's husband, Stan Greenberg, an old friend of Emanuel's whose firm had done polling work for an Emanuel campaign committee and for the Democratic Congressional Campaign Committee, which was headed in 2005 and 2006 by Emanuel.
Emanuel's rooming agreement with DeLauro and Greenberg is a twist on a familiar arrangement in the capital. Many lawmakers room together while in Washington, though in many cases they rent apartments and share costs.
Emanuel has stayed in the basement room of the home for free during House sessions for approximately five years, according to the Hartford Courant.
Neither Emanuel nor DeLauro could be reached for comment.
Emanuel's accommodations drew attention in early February when the gawker.com web site accused Emanuel of living in an illegal apartment in DeLauro's house.
DeLauro issued a statement batting down the story by asserting that "we have no separate apartment in our DC house, no rental apartment," and that bedrooms and living areas in the house "are often used by close family and friends."
DeLauro's statement also said the house had been inspected in November by Washington zoning officials pursuant to a complaint. The inspections was "uneventful and we did not hear again from the zoning office," she said.
Jan Baran, a Washington ethics lawyer who advises mostly Republicans, said Emanuel's use of the room from DeLauro and Greenburg does not violate House ethics rules since members clearly are allowed to give each other gifts of lodging.
Greenberg's co-ownership of the property doesn't affect DeLauro's ability to offer hospitality subject to House rules permitting the practice, Baran said. "It's indisputably her home," Baran said.
Tax experts are divided about whether Emanuel would have an IRS liability for the free room. The issue has aroused unusual online interest among tax experts, perhaps because arcane points of tax law rarely intersect with mainstream political events, said Paul Caron, an associate dean at the University of Cincinnati Law School and author of the TaxProf blog.
Caron said Greenberg's polling work for Emanuel and the DCCC muddies the argument that the room is a gift and thus either tax exempt or subject only to limited taxation.
"The courts have been very clear. It's very hard to claim something is a gift when you have a business context," said Caron.
Joseph Dodge, a professor at Florida State University College of Law, argued that the room is not subject to tax either as a gift or as income.
It's not a gift because it doesn't effectively cost DeLauro and Greenberg anything, Dodge said.
Nor would it be taxable as income to Emanuel because of the couple's motive in making the room available, "which would be friendship or generosity," Dodge said.
Comments
This seems a little crazy to me. What about anyone who puts up a cot and sleeps in their office? Should he have to pay tax on it? If I let someone live with me....do they need to pay tax? This is crazy.
Posted by: bill r. | February 24, 2009 7:48 AM
How is sharing a room news? How many of you out there have roomed with some friend for a time, over the years? I didn't know you had to disclose this info on tax forms, did you? He's been house hunting and has been shacking with his friends in the mean time. This is somehow nefarious? This is so NOT NEWS. You're fanning right wingnutty flames here.
Posted by: postulantk | February 24, 2009 8:06 AM
He could have moved into the White House like Harry Hopkins did when FDR was Prez.........
O, wait. Maybe Rahm isn't as dear to Barack's heart as Harry Hopkins was to FDR's......
But you would think with all that $$$ he made in his meteoric career as an "investment banker" he could afford something of his own, would you not???
Where did he stay when he still had the "Rosty-Rod-Rahm" seat in the H of Reps??
Posted by: ornery | February 24, 2009 9:12 AM
The New York Post has been in the lead on this news story, while the Tribune, Emanuel's home town newspaper, has (until today) censored it. See http://www.nypost.com/seven/02172009/postopinion/opedcolumnists/rahms_rent_is_just_the_tip_of_ethics_ice_155536.htm for the latest, which points out that Emanuel's rent-free digs were a $100,000 value, and that Emanuel's DNCC gave roommate Greenberg over $500,000 in business in 2006 and 2008.
Where can ordinary people get $100,000 worth of housing for nothing? In the Obama administration, I guess. But he's a Democrat, so it's all ok.
Posted by: Inconvenient Truth | February 24, 2009 9:14 AM
Could it be called RENT FREE POLITICAL DONATIONS?
Posted by: Inky | February 24, 2009 11:10 AM
Rahm "dead fish, knife stabber, Israel soldier" Emanuel made $18,000,000 after he left the Clinton White House.
He can afford a home in DC and he has been "in the basement" for 5 (FIVE!) years without paying anything for electricity, water? What a mooch!
Oh, but wait, he guarantees that the company of the homeowners get business from the democrats!
Pay to Live, not Pay to Play.
If Arabs think things are different since Obama got elected; they have another "think" coming.
The American/Israeli whose dual citizenships permeate the halls of the White House and the Capitol will ensure that no changes take place in the Middle East. Israel first!
Emmanuel is a creep. He is not to be trusted.
Posted by: Harry | February 24, 2009 11:16 AM
Wake up everybody!. This is the level politics has fallen to. Its Chicago politics, its the good old boy network, anything goes, just don't get caught. Most if not all are lawyers, and they know they are suppose to claim all of these different perks on their income tax. Just take a look at Obamas' cabinet failures, look how many had tax problems,or other unscrupulous dealings.
Posted by: Paul | February 24, 2009 11:25 AM
The person who's been the "lead" in this NON-story has been the right wingnutty self appointed "private investigator" who wasted more taxpayer money filing another one of his agenda driven nuisance complaints, this time sending a DC housing inspector on a wild goose chase in which he found no "illegal apartment" in the DeLauro home. All the usual wingnutty sources -- NY Post, Fox News -- ran after the story like the pack of rabid dogs they are and tried to make a big deal of it. Now real reporters have looked into it and found, horror of horrors... a guy staying with his friends while he's in DC. :o
It's hilarious to see the "get government out of our lives" crowd twist themselves into pretzels, so desperately trying to make staying with friends illegal. What's next, a tax on the "gift" of friendship? How about all those people who've lost their homes? Sorry, but this is America, you can still let people stay in your home without charging them, and without taxing their guests.
Posted by: willa | February 24, 2009 12:21 PM
http://www.swamppolitics.com/news/politics/blog/2009/02/stimulus_patrol_rat_board_gear.html
I would imagine President Obama's Rat Patrol Board would be designed for exactly this type of thing. I would hope he (Earl E. Devaney) would start at the top and work his way down, right?
Posted by: PG | February 24, 2009 2:02 PM
I hope he didn't keep "dead fish" for future use there.
Posted by: vla | February 24, 2009 2:42 PM
This sounds like the cheap straw man deal that really lets Emanuel off the hook. Accuse him of a riduculous benefit while he walks away with $14 million from an "investment banker" job that sounded a lot like getting paid back for political access and a down payment on pay for play deals this month. He sure outdid Daschle. Or, all the self- investigatory BS going on while Emanuel was on the board of Freddie Mac as they donated gabillions to Republicans, Democrats, etc so the management could make themselves rich from Congressional rule changes that ruined the economy. These might be considered a lot more damaging to the economy than his sleeping room, but no one wants to think about it.
Posted by: don | February 24, 2009 4:31 PM
What does Sen. Durbin think of this one?
Posted by: ornery | February 24, 2009 6:55 PM
Bill,
.
That old crazy tax code that you flatliners just adore so much. Sometimes it bites the ones you love right in the keester.
.
Posted by: Terry | February 24, 2009 9:32 PM