Another Rangel Property Scandal?

It's hard to see how the nation's chief tax-law author could forget to report income from rental home.


Already facing questions about one sweetheart property deal, New York Rep. Charlie Rangel now finds himself in another property brouhaha. The longtime Democratic congressman from Harlem has failed to report at least $75,000 in rental income from a luxury beachfront villa he owns in the Dominican Republic.

Evidently this is because Rangel, chairman of the House Ways and Means Committee and the chief tax writer for the United States, doesn't know that money derived from an asset is called "income." Here's how the New York Times described what his lawyer, Lanny Davis, had to say:

"Mr. Davis said the congressman did not realize he had to declare the money as income, and was unaware of the semiannual payments from the resort because his wife, Alma, handled the family finances and conferred with their accountant, John Viardi, on tax matters.

"The money was never sent to the Rangels directly, according to Mr. Davis and resort records, but was used to defray the mortgage the company gave them when they bought the villa and $23,000 in subsequent construction costs in 2003."

None of this passes the smell test. For starters, Rangel was aware he had to declare the money as income—he did so routinely in Schedule III filings in his financial disclosure statements to Congress. What's more, while Davis alleges the income was never sent to Rangel "directly" but instead was "used to defray the mortgage," those same disclosure forms show Rangel stopped listing the Punta Cana mortgage as a liability in 2003.

But here's the kicker: According to Rangel's financial forms, the Punta Cana property represents his single largest asset. Are we really to believe that the top tax-law writer in Congress, in his late 70s and surely approaching retirement, never took an interest in its performance?

Rangel has longstanding ties to the resort's owner, Theodore Kheel, so it's unlikely he just forgot about the property. Since 1993, Kheel and his late wife, Ann, contributed at least $69,469 to Rangel's campaign committees. What's more, in 2005, Rangel began listing himself as a board member to the Ann S. Kheel Charitable Trust, a foundation established by Kheel after his wife passed away. So far, the trust's largest reported donation has been to the City College of New York—$440,000 for the future Charles B. Rangel Center for Public Service.

This one stinks. Either Rangel evaded paying taxes, or—as his lawyer alleges—he doesn't even know the basics of the tax system over which he presides.