Posted by: reddiva | April 7, 2010

It’s Different When It Happens At Home

In SEPTEMBER 2008, according to the NY Times,

Representative Charles B. Rangel, chairman of the Congressional committee that writes the nation’s tax code, failed to pay an unspecified amount in federal taxes during the past five years on rental income from a villa he owns in the Dominican Republic, his lawyer said on Tuesday.


When Mr. Rangel’s legal advisers first acknowledged the unreported income last week, during interviews with reporters, they said his accountants had determined that he would probably owe back taxes to the city and New York State, but not the federal government.


Mr. Rangel will file amended tax returns and pay the taxes, Mr. Davis said. He has scheduled a news conference for Wednesday morning to discuss the matter and announce his formal request that the House ethics committee open an investigation. The inquiry is also expected to examine the unusual financing Mr. Rangel got for the villa — the resort did not charge him interest on his mortgage for more than a decade.


The Wall Street Journal published an article detailing Rep. Charlie Rangel’s tax problems.  IN JULY 2009!

Ever notice that those who endorse high taxes and those who actually pay them aren’t the same people? Consider the curious case of Ways and Means Chairman Charlie Rangel, who is leading the charge for a new 5.4-percentage point income tax surcharge and recently called it “the moral thing to do.” About his own tax liability he seems less, well, fervent.

Exhibit A concerns a rental property Mr. Rangel purchased in 1987 at the Punta Cana Yacht Club in the Dominican Republic. The rental income from that property ought to be substantial since it is a luxury beach-front villa and is more often than not rented out. But when the National Legal and Policy Center looked at Mr. Rangel’s House financial disclosure forms in August, it noted that his reported income looked suspiciously low. In 2004 and 2005, he reported no more than $5,000, and in 2006 and 2007 no income at all from the property.

The Congressman initially denied there was any unreported income. But reporters quickly showed that the villa is among the most desirable at Punta Cana and that it rents for $500 a night in the low season, and as much as $1,100 a night in peak season. Last year it was fully booked between December 15 and April 15.

Mr. Rangel soon admitted having failed to report rental income of $75,000 over the years. First he blamed his wife for the oversight because he said she was supposed to be managing the property. Then he blamed the language barrier. “Every time I thought I was getting somewhere, they’d start speaking Spanish,” Mr. Rangel explained.

And how did Mr. Rangel handle the situation?

Mr. Rangel promised last fall to amend his tax returns, pay what is due and correct the information on his annual financial disclosure form. But the deadline for the 2008 filing was May 15 and as of last week he still had not filed. His press spokesman declined to answer questions about anything related to his ethics problems.

What possible reason could Mr. Rangel have had for trying to hide this income problem?

Besides not paying those pesky taxes, Mr. Rangel had other reasons for wanting to hide income. As the tenant of four rent-stabilized apartments in Harlem, the Congressman needed to keep his annual reported income below $175,000, lest he be ineligible as a hardship case for rent control. (He also used one of the apartments as an office in violation of rent-control rules, but that’s another story.)

Early MARCH 2010 brought an editorial in the Observer-Reporter saying,

Rep. Charles Rangel, the 20-term Democratic congressman from New York, stepped down last week as chairman of the House Ways and Means Committee after being scolded for breaking House rules by accepting corporate-financed travel.

Huh?  Accepting corporate-financed travel?  I thought the problem was documented in 2008 was because of some property in the Dominican Republic.  Now, he’s been “scolded” for a totally different reason?  Oh, I see.  I should have kept on reading the Observer-Reporter article:

That’s not the only ethical lapse for which Rangel, 79, has been accused. He faces inquiry into late payment on income taxes on a rental villa he owns in the Dominican Republic, belated disclosure of hundreds of thousands of dollars in previously unlisted wealth and other failures in judgment.

Hmmm.  Okay, Mr. Rangel has problems with money.  The American people should not be concerned about this, however, because he was ONLY the Chairman of the House Ways and Means Committee.  That just means that he is the one who is responsible for the US Tax Code.  Nothing really important.

Is this a pattern with Democrats?  I don’t know.  It could be.  Another Democrat is now in a bit of hot water for his income and tax problems.  This one is much closer to home, and I would like to think that Texas will be a little more eager to bring the suspected abuse to light and whatever punishment is found deserved will be handed down more quickly.

The Texas Insider published the following in the April 5, 2010 edition about the Democratic nominee for Governor of Texas, Bill White.

AUSTIN – On Day 16 of refusing to release his income tax returns, Democratic gubernatorial nominee Bill White – critics claim – has been caught lying to the Texas Ethics Commission (TEC).  A trial lawyer, White appears to have failed to report more than $83,000 in income from a real estate partnership to the TEC, according to his 2009 income tax return and disclosure documents he filed with the Texas Ethics Commission February 16, 2010.

“This is no little White lie,” said Republican Party of Texas Chairman Cathie Adams.

“This is a failure to comply with the very laws that White is campaigning to uphold as the state’s chief executive officer. The people of Texas deserve more transparency from Bill White, and they deserve leaders who will comply with the law,” Adams said.

White’s spokesman, Katy Bacon, has confirmed that White received the income as reported on his 2009 income tax return. But there is no mention of this income anywhere on White’s filing with the Texas Ethics Commission.

That real estate partnership in question, Wedge Group, is already at the center of a controversy stemming from White’s tenure as mayor of Houston.

For years, White has claimed that he received no income from Wedge Group while he was mayor of Houston, but his 2009 income tax return – the only income tax return he has released so far – shows $83,677 in income from Wedge during 2009 alone.

White’s tenure began in January 2004 and ended in January 2010.

To date, White has only released his 2009 income tax return, and only after mounting pressure on him to do so. Republican party officials, and the Perry Campaign itself, have been pressing White for weeks saying it is long past time for Bill White to match Gov. Rick Perry and disclose all of his income tax returns so that Texans might learn what other undisclosed payments may be hidden within them.

The Wedge Group payment marks the 2nd hidden compensation White has received while mayor of Houston.

The Houston Chronicle has also reported that White earned more than $2.6 million while serving on the board of BJ Services, a company currently under Congressional investigation for possible groundwater pollution.

The Texas Ethics Commission received the complaint March 23, 2010. White has 10 days to respond to it.

It will be interesting to see how Texas handles the situation by comparison to the way Washington and Nancy Pelosi have handled the Rangel debacle.


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