By Isabel Vincent
November 2, 2008
Rep. Charles Rangel has not hired the forensic accountant he said he needed in order to provide answers regarding his messy tax records, The Post has learned.
Meanwhile, the Harlem Democrat has paid more than $120,000 in campaign money to a law firm to represent him in the scandal.
Rangel, the powerful chairman of the tax-writing Ways and Means Committee, paid $121,436 in fees to the Chicago office of Orrick, Herrington and Sutcliffe on Oct. 1. The payment came from his campaign fund, Rangel for Congress.
One of the law firm’s partners, Washington-based Lanny Davis, was hired shortly after The Post revealed in August that Rangel had not disclosed rental income on a Dominican Republic beachfront villa.
Federal Election Commission rules prohibit elected officials from using campaign funds for personal legal expenses, and review such expenses on a case-by-case basis.
George Dalley, Rangel’s chief of staff, said the congressman had hired an attorney with specialized knowledge of the FEC to clear the legal expenses with the agency.
“We have a prior ruling that this is a legitimate campaign expense,” he said, adding that there was an exchange of letters between the FEC and Rangel’s lawyer.
But a spokeswoman for the FEC said she has no record of Rangel or his legal representative applying for a determination from the agency.
“The FEC requires campaigns to get approval before using campaign funds for any legal expenses that may in fact be personal,” said Ken Boehm, chairman of the National Legal and Policy Center, an ethics-watchdog group based in Virginia.
“Any legal issue of whether Rep. Rangel paid his taxes appears to be a personal legal issue with nothing to do with Rangel’s role as a congressman or candidate.”
Although Rangel has retained an attorney to aid him in the scandal, he has failed to live up to his public vow to hire a forensic accountant to pore over his tax filings and financial records to figure out if he still owes Uncle Sam money for income earned on his Dominican villa.
In a statement released on Sept. 15, Rangel announced he would “conduct a thorough, independent review of all these statements going back 20 years as well as all of my US, state and local tax returns for the same time period.”
He said he would turn over the findings to the House Ethics Committee, which is probing several issues. Those include revenue from the villa, Rangel’s use of rent-stabilized apartments as offices in Harlem, and his use of congressional stationery to solicit contributions for an academic center to be named after him.
Following a Post investigation, Rangel admitted he failed to pay tax on at least $75,000 in rental income from his Dominican villa over the past 20 years. Later, he revealed he also failed to disclose the sale of a house he and wife Alma owned in Washington, and their $70,000 profit on a Florida condominium they bought in 2004 and sold in 2006.
Dalley said that despite a lengthy search, an accountant had not yet been hired. “I have heard a name mentioned, but no one has been hired,” he said Friday.
In an interview published last Tuesday in the DC newspaper Roll Call, Davis attributed the delay to difficulty finding a truly independent firm that does not have business before the Ways and Means Committee nor has made contributions to Rangel’s campaign.
But at least one leading auditor called the assertion “ludicrous.”
“Many people . . . would have no problem doing the audit,” said Michael Kessler, president and CEO of Kessler International, a leading forensic-accounting firm in New York.