Republicans Say Rangel Passed on Chances to Settle

Republicans Say Rangel Passed on Chances to Settle Ethics Case

By James Rowley and Ryan J. Donmoyer

July 30 (Bloomberg) -- Republicans on the U.S. House ethics panel said Representative Charles Rangel passed up chances to settle misconduct charges and now must face an airing of allegations that include improperly seeking donations from companies with business before Congress.

Charges against the New York Democrat were detailed yesterday at a hearing of an eight-member subcommittee empanelled to determine whether Rangel is guilty of 13 allegations of ethical misconduct.

“Let me be clear that Mr. Rangel” was “given opportunities to negotiate a settlement during the investigation phase,” Representative Michael McCaul, a Texas Republican, said at the hearing. “We are now in the trial phase.”

McCaul’s comments are significant because, with the ethics panel comprised equally of Democrats and Republicans, a bipartisan majority would be required to approve any settlement Rangel’s attorneys might reach with staff attorneys.

A public hearing on the charges, which won’t occur until after Congress returns from its August recess, could be politically awkward for Democrats as the November 2 elections approach. That vote will determine whether the party retains control of the House and Senate.

The charges against Rangel include allegations that he sought donations from companies such as New York Life Insurance Co., American International Group Inc., and private foundations related to such businesses as AT&T Inc. and Verizon Communications Inc., to help fund construction of an academic facility carrying his name. He obtained $8 million in donations for the Charles Rangel Center for Public Service at City College of New York.

Potential Donors

Rangel, 80, is accused of improperly using the official House stationary letterhead to send more than 100 solicitation letters to potential donors that were prepared by his staff during their workday. Enclosed was a 20-page “glossy brochure” that requested a $30 million donation over five years or $6 million a year, according to the 40-page charging document released by the ethics committee.

In March, Rangel stepped aside as chairman of the tax- writing House Ways and Means Committee after the ethics panel cited him for accepting corporate-sponsored travel.

Rangel “denies each and every allegation” of the new charges, his lawyers said in a statement filed with the ethics committee. Rangel didn’t dispense political favors, “did not intentionally violate any law, rule or regulation” and didn’t “misuse his public office for private gain,” they wrote.

Pelosi’s Reaction

House Speaker Nancy Pelosi, a California Democrat, told reporters yesterday “the chips will have to fall where they may politically, but holding the highest ethics standards is a top priority for us.” She defended her party’s record on ethics, saying Democrats had lived up to their pledge in the 2006 campaign to “drain the swamp” of ethical wrongdoing in the then-Republican controlled House.

Democrats won both the House and Senate in that election.

McCaul, a former federal prosecutor, called the charges against Rangel “very serious.” They include Rangel’s failure to report more than $500,000 in income from rental properties and other sources on required financial disclosure statements. The lawmaker has since amended his reports.

“These actions and these allegations, if proven, would violate multiple provisions of House rules and federal statutes,” McCaul said.

Representative Jo Bonner of Alabama, the panel’s top Republican, said Rangel, a Korean War combat veteran, overcame poverty to become an influential lawmaker and one of the most “well-liked” House members.

“This is truly a sad day, which no one, regardless of their partisan strips, should rejoice,” Bonner said.

War Veteran

Rangel said yesterday that “60 years ago I survived a Chinese attack in North Korea and as a result I haven’t had a bad day since. But today I have to reassess that statement.”

Rangel didn’t attend the panel’s meeting yesterday. Earlier this week, he said his lawyers were trying to settle the case with ethics committee attorneys.

Bonner said Rangel “was given multiple opportunities to settle this matter” and “instead, he chose to move forward into this public trial phase.”

Among those Rangel sought building donations from was the chief executive officer of Nabors Industries Ltd., an oil drilling business lobbying Congress to preserve a tax loophole for companies headquartered in Bermuda.

Pledged Donations

The company and its CEO, Eugene Isenberg, each pledged $500,000 contributions after Rangel met with the executive, the committee charged. Rangel, then the Ways and Means chairman, met twice in the next eight months with Isenberg about preserving the tax loophole, the committee charged.

According to the panel’s documents, Rangel used a rent- controlled apartment in New York as a campaign office in part because he was on a “special handling list” maintained by the management company that noted his status as a member of Congress.

Rangel referred his own case to the ethics committee two years ago, saying he expected to be vindicated.

The investigating subcommittee said Rangel “refused repeated requests” for documents, requiring the panel to issue a subpoena.

Rangel has served in Congress since 1971. He won election after successfully challenging then-Representative Adam Clayton Powell Jr. in the 1970 Democratic primary. He is being challenged this year by Adam Clayton Powell IV for the party’s nomination.

“Some people would undoubtedly support him if he got handcuffed and thrown in jail,” Powell said in an interview. He called on Rangel to resign before New York’s Sept. 14 primary.

Rangel’s supporters this week mailed a video invitation to a $2,500-a-ticket party on Aug. 11 to belatedly celebrate his 80th birthday, which was on June 11. The party will feature singer Aretha Franklin.