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What is the problem with chairmen of the House Ways and Means Committee?

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What is the problem with chairmen of the House Ways and Means Committee?

Old 09-09-08, 02:35 PM
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What is the problem with chairmen of the House Ways and Means Committee?

There was Rostenkowski who went to the slammer, now Rangel. These are the guys writing the tax policy they can't seem to be able to follow.

Tax chairman Rangel failed to report income

By Daniel Trotta
Reuters
Friday, September 5, 2008; 1:22 PM

NEW YORK (Reuters) - House Rep. Charles Rangel, chairman of the tax-writing Ways and Means Committee, failed to report $75,000 of income from a villa he owns in the Dominican Republic, his attorney said on Friday.

The Democratic congressman, who has represented New York City's Harlem district for 38 years, plans to file an amendment to his previous tax returns and likely has no federal tax liability on the investment, lawyer Lanny Davis said.

Rangel probably owes nothing to the federal government because of depreciation and foreign tax credit, but he may owe a few thousand dollars to the state of New York, Davis said, calling Rangel's omission an "honest error" that he only realized due to recent media reports.

Details about the three-bedroom, three-bathroom beachfront home were first reported in the New York Post on Sunday and again in The New York Times on Friday.

Davis declined to comment on whether the matter embarrassed the head of the committee that drafts federal tax laws.

Rangel said in a statement his accountant would review the matter and that he would follow any recommendations.

Rangel has owned the villa at the Punta Cana Resort and Club since 1988 and rents it for as much as $500 per night, the Times said, but he never reported the income on his federal or state tax returns. Davis stressed that all investors in the time-share resort pay expenses and draw income on the resort collectively.

Rangel paid $80,000 for the unit, with a down payment of $28,500, in 1988 and spent $23,000 on renovations in 2003, Davis said. Discounting the down payment, his profit from the property over 20 years was a few hundred dollars, or less than 1 percent, Davis said.

"That's some cash cow," Davis said, mocking a headline in the Post.

The resort sent twice-annual statements to Rangel that detailed the reduction in his debt on the property, Davis said. Those statements were received by Rangel's wife and not given to the accountant, the lawyer said.

Rangel's finances have been under scrutiny since July, when the Times reported that the lawmaker lived in multiple reduced-rent apartments provided under a plan to preserve affordable housing in New York City.

Rangel defended his right to maintain those below-market rentals, but agreed to give up an office that he used for campaign activities.

Rangel has asked for a congressional ethics inquiry on that matter and was considering requesting a similar review of his Dominican property, Davis said.

http://www.washingtonpost.com/wp-dyn...090502078.html
Rangel Says He Didn't Know of Loan Terms
Villa Deal Compounds Controversy

By Christopher Lee
Washington Post Staff Writer
Saturday, September 6, 2008; Page A03

Rep. Charles B. Rangel (D-N.Y.) did not know that the Caribbean resort villa he purchased 20 years ago was financed with a no-interest mortgage from the developer and has generated $75,000 in income that he should have reported on tax and financial disclosure forms, his lawyer said yesterday.

Lanny Davis said the powerful chairman of the House Ways and Means Committee, which oversees complex tax policy, was unaware until this week of the financial terms surrounding the Dominican Republic property because the developer of the Punta Cana Yacht Club did not regularly send annual financial statements to property owners.

The undisclosed income and favorable loan terms compounded the ethical controversies already enveloping the 38-year veteran of Congress.

In July, the Democrat from New York asked the House Ethics Committee to examine his fundraising entreaties to corporations and foundations on behalf of a university academic center that bears his name, and into his rental of several Harlem apartments at below-market rates.


Davis said Rangel likely will amend his federal, state and New York City tax returns and update his congressional financial disclosure filings. He also will ask the ethics committee to add the Caribbean real estate deal to its inquiry.

"We are confident that Mr. Rangel has done nothing wrong," he said.

That will not assuage the congressman's critics. Kenneth Boehm, chairman of the National Legal and Policy Center, said in a statement yesterday that his nonprofit group, which promotes ethics in public service, had filed complaints against Rangel with the Justice Department and the Internal Revenue Service.

"Ordinary citizens are prosecuted all the time for tax evasion," Boehm said. "Rangel should not get special treatment just because his committee writes the tax laws. A full investigation of this matter is warranted."

Rangel paid $82,750 for the beachfront Casita 412 in 1988, financed in part by a $52,000 loan from the developer that since 1990 has been interest-free, according to Davis and records released by the resort and Rangel's office. Rangel bought the property at the suggestion of Theodore W. Kheel, a friend and New York labor arbitrator who was a principal investor in the project. Proceeds from rentals at the resort property were automatically credited toward paying down the mortgage, Davis said, so the money did not flow directly into Rangel's pocket.

"He simply didn't realize that there was any actual income being generated, since he never received . . . any checks over the last 20 years," Davis said. "So he never realized there was any income tax filing issue or financial disclosure issue. Now that he knows what he knows, we're going to fix all that."

Two years after the opening of the property, the developer waived the interest rate on loans made to Rangel and other foreign backers among the initial investors known as "pioneers" because rental income had not met expectations, according to a written statement this week from Jose Oliva, director of the Yacht Club.

"Mr. Rangel did not receive individual preferential treatment," Davis said.

The initial loan was paid off by 2003, and Rangel borrowed an additional $23,000 to expand the unit to three bedrooms, Davis said. Rangel's share of rental revenue from the resort then went to pay off that loan, including about $1,100 in interest.

Only recently, in June, did Rangel see his first cash payment from the property, about $775 dollars, Davis said.

Rangel once valued the property at $250,000 or more on his federal disclosure forms, but Davis said it would be expected to fetch far less these days in the slumping real estate market.

The New York Post first disclosed Rangel's unreported income from the property in Sunday's editions. Rangel said in a statement that he had asked his accountant to review all the financial data concerning the Caribbean property. "Once my accountant obtains and verifies the facts, I will follow his recommendations," he said.

Davis said he expects Rangel to have no federal income tax liability from the villa because the congressman can deduct the taxes paid to the Dominican Republic and because he is entitled to deduct depreciation on the property. He estimated the back city and state taxes owed to be "in the several-thousand-dollar range."

Kevin Smith, a spokesman for House Minority Leader John A. Boehner (R-Ohio), called it "more than just a little ironic" that the leader of the tax-writing committee had not paid the U.S. taxes on income from his own luxury vacation home.

http://www.washingtonpost.com/wp-dyn...090503442.html
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Old 09-09-08, 02:47 PM
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Wilbur Mills wasn't an altar boy either.
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Old 09-09-08, 02:50 PM
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Surely Rep Rangel has accountants that could have advised him on this dealing.
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Old 09-09-08, 02:51 PM
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Originally Posted by wendersfan View Post
Wilbur Mills wasn't an altar boy either.
That's for sure. But I don't recall his problems involving his taxes.
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Old 09-09-08, 02:55 PM
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Originally Posted by X View Post
That's for sure. But I don't recall his problems involving his taxes.
No, he had more "earthy" problems. It was just the first thing i thought of when I saw the thread title.
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Old 09-09-08, 02:56 PM
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Strippers and booze... The thread would have to be "What's the problem with politicians?" to cover that.
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Old 09-09-08, 03:28 PM
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I'm a fan of Charlie Rangel.

But - I don't see how he can keep his committee chairmanship after this.

At the very minimum he has to step aside while the House Ethics Committee looks into the matter. And, I don't see how he can escape at least a censure by The House for this.

Last edited by classicman2; 09-09-08 at 03:31 PM.
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Old 09-09-08, 04:22 PM
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<a href="http://en.wikipedia.org/wiki/Sam_Gibbons">Wikipedia seems to indicate</a> that Sam Gibbons could've been prosecuted under Godwin's Law for his remarks to the newly Republican congress in the mid 1990s.
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Old 09-09-08, 04:41 PM
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Originally Posted by wendersfan View Post
Wilbur Mills wasn't an altar boy either.
Don't even get me started on that son of a bitch Thaddeus Stevens.
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Old 09-10-08, 12:52 AM
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Give Rangel a break. Do you really expect him to remember how many houses he owns?
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Old 09-10-08, 03:08 AM
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Rangel may have a horrible accountant, but he has a hell of a realtor.
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Old 09-10-08, 04:10 AM
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Originally Posted by wishbone View Post
Surely Rep Rangel has accountants that could have advised him on this dealing.
The letter explaining his tax ramifications got lost in one of his four rent controlled apartments.
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Old 09-14-08, 03:33 PM
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Sarah Palin had members of her own party prosecuted for corruption.

Barack Obama is too wimpy to urge for Charles Rangel to be prosecuted for tax evasion.

Rangel is the chairman of the tax writing committee, and he didn't pay his taxes. He wrote the rules, but he didn't follow them.

Why is he still the chairman?

Why hasn't he been fired?

Here's why:


http://www.worldnetdaily.com/news/ar...TICLE_ID=38879

There is simply no accountability for government employees. Once they have a job, it's practically a job for life. Almost no one ever gets fired from a federal government job. The statistics are staggering.

According to the Office of Personnel Management, only one in 5,000 non-defense workers get fired annually for poor performance.

From 1984 through 2001 – a period of 17 years – of 28,000 employees in the State Department, only six were fired for poor performance. Yet, I think we could safely eliminate the entire department and not lose a step as a nation.

Only one person was fired from the entire Education Department in 2001. Only two were fired in the entire Transportation Department that year. Only two were fired from the Department of Housing and Urban Development.

In all the federal bureaucracies combined in 2001, only 434 employees were fired – and that was higher than the annual average. That 434 figure represents a negligible 0.02 percent of all federal government employees.

Not only does it take heroic action by managers to fire federal employees, there are also hardly any incentives for good performance.

A study by OPM concluded that "the federal white-collar pay system sends and reinforces the message that performance does not matter."
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Old 09-14-08, 04:10 PM
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What that article doesn't take into account is that 98% of a government job consists of making sure you do nothing that could get you fired, which usually means just that: Doing nothing.
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Old 09-14-08, 06:48 PM
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Originally Posted by Suprmallet View Post
What that article doesn't take into account is that 98% of a government job consists of making sure you do nothing that could get you fired, which usually means just that: Doing nothing.
Next time I talk to my dad, I'll have to let him know that his job consists of doing nothing.
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Old 09-14-08, 06:56 PM
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Not all government workers are like this. Just the ones who tend to speak the most.
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Old 09-15-08, 10:49 AM
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Yes, just what you want from the guy in charge of writing the tax laws. Either they're too hard for him to follow and should spend his time on simplifying them or, more likely from some of the discrepancies, he's not the right person for the job.

More errors for Rangel; hires new accountant
By DEVLIN BARRETT – 8 hours ago

WASHINGTON (AP) — A new set of potential problems in Rep. Charles Rangel's financial papers has prompted the tax-writing lawmaker to hire a forensic accounting expert to try to unravel the mess.

Rangel, chairman of the powerful House Ways and Means Committee, is already the subject of ethics committee investigations on several fronts, including unreported income and unpaid taxes on his beach house in the Dominican Republic.

Those issues and others have led the New York Democrat to hire the expert to pore over Rangel's finances over the past 20 years, and issue a report to the House ethics committee.

Rangel's lawyer, Lanny Davis, said the hiring shows Rangel "has nothing to hide and does not believe he has done anything intentionally wrong."

The report will be given to the committee "as quickly as possible," Davis said, and the congressman will not get to see it before the committee.

The tax issue is particularly embarrassing for a lawmaker whose job is to guide new tax law. Rangel is resisting calls from Republicans that he should lose his committee post, among the most coveted on Capitol Hill.

As more questions have been raised about Rangel's records, his lawyers and accountants have uncovered new discrepancies in the personal financial disclosure documents that he files every year to Congress. Every lawmaker is required to file such paperwork disclosing major assets.

Rangel said in a statement he became aware of the issues over the weekend while working with his attorneys and staff. "While over the years I delegated to my staff the completion of my annual House financial disclosure statements, I had the ultimate responsibility. I owed my colleagues and the public adherence to a higher standard of care not only as a member of Congress but even more as the chair of the House Ways and Means Committee," he said.

Among the new discrepancies:

_Rangel's papers over the past 10 years show no reference to the sale of a home he once owned on Colorado Avenue in Washington.

_The details of a property bought in Sunny Isles, Fla., are bewildering at best. The stated value changes significantly from year to year, and even page to page, from $50,000 to $100,000 all the way up to $500,000.

_Some of the entries for investment funds fluctuate strangely, suggesting that the person either didn't have accurate information or didn't fill out the paperwork correctly.

Rangel spent the past week trying to answer questions about his ethics and his finances.

He admitted he owes the Internal Revenue Service about $5,000 in back taxes for unreported income from the rental of his vacation villa, and probably a smaller amount to state and city tax collectors.

The congressman acknowledged he made mistakes but said they were errors of omission and should not lead to the loss of his high position in Congress.

The home in the Dominican Republic has proven a major embarrassment to the 78-year-old Rangel, who conceded he never reported the rental income over a 20-year period, received a no-interest mortgage on the place for more than half that time and claims to have no idea what it is worth today.

The ethics committee is also investigating Rangel's rental of three rent-stabilized apartments in his home district of Harlem, as well as his use of official congressional stationery to try to find private donors for a college center named after the lawmaker.

http://ap.google.com/article/ALeqM5i...aSclgD9370P5O1
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Old 09-16-08, 03:10 PM
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The Forensic Accountant's job will be to ethnically cleanse the criminal activity on Rangel's part.

And he's a dem and has the correct skin color so he's not even temporarily stepping down.

http://seattlepi.nwsource.com/nation...el_ethics.html
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Old 09-16-08, 03:13 PM
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Serious question: If this had been a Republican Ways & Means Chairman, do you think we would have heard more about this from the media?
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Old 09-16-08, 03:18 PM
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I think we've heard about it from the media. But if he was a republican, the media would have the premeditated criminal activity angle rather than trying to cover for him by portraying this as a minor oversight.
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Old 09-16-08, 03:18 PM
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Originally Posted by classicman2 View Post
Serious question: If this had been a Republican Ways & Means Chairman, do you think we would have heard more about this from the media?
I sure at least Nancy Pelosi would be screaming to the media that he should resign his chairmanship.
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Old 09-16-08, 03:21 PM
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I'll answer my own question - obviously, yes.
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Old 09-16-08, 03:26 PM
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supposedly pelosi has asked him to step down but he won't. her office denies asking him though
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Old 09-16-08, 03:32 PM
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I don't believe she has asked him. She can force the issue if he won't step down.
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Old 09-16-08, 03:54 PM
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Originally Posted by grundle View Post
A study by OPM concluded that "the federal white-collar pay system sends and reinforces the message that performance does not matter."
This is absolutely true. The federal gov't is deathly afraid of being accused of racism, sexism, ageism, nepotism, etc. So in order to avoid any sort of preferential treatment, they remove practically all performance metrics that are subjective. About the only thing that matters is years of service.
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