Rangel Tries to Explain Back Taxes on Villa “I really don’t believe making mistakes means you have to give up your career,” Representative Charles B. Rangel said at a news conference in Washington on Wednesday.
By DAVID KOCIENIEWSKI
Published: September 10, 2008
WASHINGTON — Representative Charles B. Rangel said on Wednesday that “cultural and language barriers” had hindered him from understanding the finances of his Dominican Republic beach house, and vowed to repay several thousand dollars in federal taxes he owes after failing to report $75,000 in rental income from the villa.
At a Capitol Hill news conference, during which he was by turns remorseful and combative, the congressman said that he had not been aware of the income and unpaid taxes in part because he had trouble getting detailed financial statements from the resort’s managers in the Dominican Republic.
“Every time I thought I was getting somewhere, they’d start speaking Spanish,” Mr. Rangel said.
The explanation was greeted with skepticism and surprise by some people in his district, where Spanish is the primary language in nearly half the households and even Mr. Rangel’s own Congressional Web site can be instantly translated to Spanish with just two clicks of a computer mouse.
The congressman brushed aside calls that he step down as chairman of the powerful House Ways and Means Committee, and accused Republicans who have demanded that he do so of trying to exploit his financial missteps.
“I really don’t believe making mistakes means you have to give up your career,” said Mr. Rangel, a Democrat from Harlem.
Mr. Rangel, a lawyer who has been a member of the tax-writing committee for three decades, has found himself on the defensive in recent months because of disclosures about the villa, his use of Congressional stationery to solicit financial support for a City University center that will bear his name and his rent-stabilized apartments in Upper Manhattan.
At the news conference, Mr. Rangel said that he had asked the House ethics committee to investigate the issues surrounding the villa, which include his failure to pay taxes on the rental income and the resort developer’s decision to waive the interest on a mortgage extended to him to buy the home. He had previously requested that the committee examine his rent-stabilized apartments and his fund-raising for the City University center.
The congressman also released copies of documents he has submitted to the committee and pledged to apologize to the public and fellow members of Congress if he was found to have violated House rules.
“I personally feel I have done nothing morally wrong,” he said. Pressed by reporters about how, given his position and background, he could be ignorant of the tax rules, he answered: “I never had any idea that I got any income.”
Mr. Rangel bought the beachfront house at the Punta Cana resort and club in 1988. The resort, with tennis courts, a 1,500-acre nature preserve, golf and a marina, has emerged as one of the most desirable in the Caribbean, attracting celebrity investors like Oscar de la Renta and Julio Iglesias and high-profile guests like former President Bill Clinton.
Mr. Rangel said on Wednesday that he had never used the home more than four days in any calendar year. He said he had occasionally let other members of Congress stay at his villa for honeymoons or holidays, but declined to name them.
The news conference, which drew about 50 reporters, lasted for more than an hour, and while Mr. Rangel was contrite in accepting responsibility for his errors, he also displayed some of the cantankerousness that has marked his four decades in office,
When a reporter asked whether his errors had undermined his credibility to the point that he should step down as leader of the committee, he responded by asking the reporter how long he had been in journalism.
“I wouldn’t judge whether it’s time for you to leave,” the congressman said.
According to the letter Mr. Rangel had previously sent to the ethics committee and that he released on Wednesday, he bought the villa for $88,900, putting $28,900 down and taking out a mortgage for the balance from the resort owner.
While the resort made payments to Mr. Rangel every six months for his share of the rental income, and stopped charging interest on his mortgage after two years, the congressman said he paid little attention to the transactions — and was unaware that the interest had been waived — because the money was never sent directly to him or his wife but was instead used to pay down his mortgage and cover other fees he owed the development.
Elaborating on his difficulty with the language barrier, Mr. Rangel said that at various times over the past two decades, he tried to get the resort to send financial statements more regularly, and asked for help from Theodore Kheel, the prominent New York labor lawyer, who was a principal investor in the project.
Mr. Rangel said he was stymied by the company’s impenetrable bureaucracy and his inability to speak Spanish. He said it took a bilingual team assembled by his lawyer, Lanny Davis, to sort the villa’s finances out in recent days.
Mr. Rangel conceded on Wednesday that he had been “irresponsible” in failing to gather the information needed to report the income on his taxes or financial disclosure forms, and acknowledged that as a member of Congress and chairman of the Ways and Means Committee he should be held to a higher standard of conduct.
Asked to release his tax returns, however, he declined, saying that might infringe on the privacy of others. Mr. Davis, his lawyer, has said that Mr. Rangel’s wife, Alma, handled the family’s finances.
Mr. Rangel said that his accountants were still calculating the total he owed in unpaid taxes over the past five years, but that it was unlikely to exceed $5,000 to the Internal Revenue Service. Mr. Davis said that Mr. Rangel would probably owe another $5,000 to New York State and New York City combined.
Republican leaders in Congress, who demanded on Tuesday that Speaker Nancy Pelosi strip Mr. Rangel of his chairmanship, were unmoved by his explanation on Wednesday.
Ken Spain, a spokesman for the National Republican Campaign Committee, said Mr. Rangel should “go on a permanent vacation and trade his powerful committee chair in for his favorite lounge chair on the beach.”
Mr. Rangel also defended his advocacy on behalf of CUNY, which is trying to raise millions of dollars to open the Charles B. Rangel Center for Public Service to train students for careers in government. Mr. Rangel acknowledged using his Congressional letterhead to ask leaders of charitable foundations and businesses to support the project, but said he had asked only that they meet with CUNY officials to discuss the project.
“I never asked for one nickel,” he said. “I asked for a meeting.”
Mr. Rangel did concede, however, that the ethics committee might find that he had improperly used his Congressional stationery, and he said he would abide by the committee’s rulings.
The congressman nonetheless said it was unfair to judge his long career in public service based on the ethics complaints. Hours before the news conference, he was included on a list of the 20 most corrupt members of Congress released by the group Citizens for Responsibility and Ethics in Washington, an action he called “sad and unfair.”
Mr. Rangel also dismissed the notion that he could be viewed as receiving an improper gift from his New York City landlord, the Olnick Organization, because the company allowed him to lease four rent-stabilized apartments, one of which he used as a campaign office.
Mr. Rangel has since agreed to relinquish the campaign office, but says there is nothing improper about keeping the others.
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