Rangel defends himself, attacks GOP

Rep. Charles Rangel (D-N.Y.) fired back at GOP critics Wednesday even as he acknowledged that he owes roughly $10,000 in unpaid taxes because he failed to report rental income to the IRS and state and local government.

The powerful chairman of the tax-writing Ways and Means Committee held a press conference in which he admitted to making mistakes on his tax returns but argued that should not force him to give up his committee gavel or leave office.

{mosads}Rangel stressed that he will repay the taxes owed, takes the omissions “seriously” and has no good excuse for failing to report nearly 20 years of income on a beach villa he owns in the Dominican Republic.

“I sincerely regret and take personal responsibility for these errors,” he told reporters in a question-and-answer session that ranged from jovial and forthcoming to confrontational and confusing and went on for more than an hour.

He pledged to correct the omissions and amend filings to both the IRS and to his financial disclosure forms in Congress. He stopped short, however, of admitting any lapse in moral judgment.

“I personally feel that I have done nothing morally wrong,” he said.

Rangel has asked the ethics committee to review the tax and rental income omissions as well as the two prior ethics charges against him. Before the August recess, the panel announced that it was reviewing the first two allegations, but Rangel attorney Lanny Davis said committee members and staff have yet to request any documents from him.

House Republicans recently have ratcheted up the political pressure on Rangel. Before the August recess and before the tax omissions on the villa were reported, Minority Leader John Boehner (R-Ohio) offered a motion to censure Rangel. It failed, with dozens of Republicans either voting with Democrats against the motion, voting present or failing to show up to the vote.

Earlier this week, Boehner sent a letter to Speaker Nancy Pelosi (D-Calif.) calling on her to relieve Rangel of his Ways and Means chairmanship while the ethics panel investigates the three sets of allegations against him.

The New York Democrat punched back at Boehner on Wednesday, slamming the minority leader for using the ethics allegations to score political points.

“I have felt embarrassed for my friend John Boehner that he felt that politically he had to do that,” Rangel said.

{mospagebreak}“I am more than confident that he knows there’s no justification for it,” Rangel added.

Rangel purchased the villa in the Punta Cana section of the Dominican Republican 20 years ago for a price of $82,750. He and his wife provided a down payment of $28,900 and initially held a mortgage of $53,850. Later, there was a $23,000 renovation that was added to the mortgage. Over the next 15 years, Rangel did not make any mortgage payments directly, but the managers of the resort property used rental income from it to pay off the mortgage completely.

During all but two years of the mortgage, Rangel paid no interest on it. He said the resort owners decided not to charge all early owners — who were called pioneers — interest, because their properties were not generating rental income quickly.

{mosads}His lawyers estimate he failed to report some $75,000 in rental income over a 20-year span, but it only amounted to $5,000 in recent tax liability because the U.S. provides credit for taxes paid to foreign governments and Rangel could claim depreciation on the villa because he considered it an investment property.

Despite owning the villa for two decades, Rangel said a Spanish language barrier and inconsistencies in communication from the resort’s owners made it difficult to figure out the details of the mortgage and how much rental income he received from it.

“Every time I thought I was getting somewhere, they’d start speaking Spanish,” Rangel told reporters.
Rangel also acknowledged that fellow lawmakers and aides had stayed in the resort as his guests but would not name them.

At one point during his talk with reporters, Rangel said he stayed in the villa less than four days a year, and at another point, he said he stayed less than nine days annually. None of his villa guests had business before the Ways and Means Committee and none of them were financial contributors to his campaign or political action committee, he said.

Rangel is considering releasing tax returns dating back 20 years but said he still needed to talk it over with this wife.

Besieged by the sheer number of questions, Rangel laughed at some, bristled at others and told funny stories.

When asked if his problems could hurt his party in the November elections, Rangel was clearly annoyed.

“How the hell would I know how people look at this?” he said.

Rangel also joked about an unflattering photo of himself lying asleep on a chaise lounge perched on the beach in front of his villa that appeared in the New York Post. He said that his wife saw it and told him he was fat.

“I’ve lost 10 to 15 pounds because of that picture,” he said, “but it hasn’t been an entirely pleasant experience.”