Charles Rangel, Maxine Waters and the House culture of entitlement (tax-cheat Charlie's AIG Hall?)

Charles Rangel, Maxine Waters and the House culture of entitlement
By Ruth Marcus
Wednesday, August 4, 2010

My favorite part of the ethics report on Charlie Rangel involves his efforts to "close" a $10 million gift "to create AIG Hall" as part of the Rangel Center at the City College of New York.

At a meeting in April 2008, the New York Democrat, then chairman of the House Ways and Means Committee, "asked AIG, at least twice, what was necessary to get this done," according to the report. The insurance giant wasn't so sure about writing the check, citing the "potential headline risk."

When AIG -- the company that paid out hundreds of millions in bonuses after being rescued by a government bailout -- recognizes an appearance issue, you know you've got a problem.

Unless, that is, you're Charlie Rangel. Or, for that matter, Maxine Waters, the California Democrat who this week joined Rangel in being charged with ethics violations and in awaiting a public trial by the House ethics committee.

Which gets to my favorite part of the ethics report on Waters. Fast-forward a few months after Rangel's meeting with AIG, to the first weeks of September 2008. This was, to put it mildly, a rather busy time for then-Treasury Secretary Hank Paulson. The economy was tanking. Lehman Brothers was about to go down.

But when a senior member of the Financial Services Committee calls, the Treasury secretary tends to listen. Waters said she had "some people in town who were important to her," Paulson recalled, and asked for a meeting with Treasury officials to discuss their concerns.

................my favorite part of the ethics report on Waters. Fast-forward a few months after Rangel's meeting with AIG, to the first weeks of September 2008. This was, to put it mildly, a rather busy time for then-Treasury Secretary Hank Paulson. The economy was tanking. Lehman Brothers was about to go down. But when a senior member of the Financial Services Committee calls, the Treasury secretary tends to listen. Waters said she had "some people in town who were important to her," Paulson recalled, and asked for a meeting with Treasury officials to discuss their concerns..............

When Representative Maxine Waters (D-Cali), called then-Treasury Secretary Henry M. Paulson Jr. in late 2008 to ask him to host a special meeting that would feature a California bank executive she knew well, was the request on behalf of a trade association, or a bank in which her husband owned stock? That question will be among those raised at an ethics trial expected to unfold this fall, House officials predicted Saturday, after Ms. Waters became the second House member to indicate last week that she would challenge an allegation of violating House ethics rules. The specific charges to be filed against Ms. Waters have not been made public.

But House officials confirmed that the case involved communications Ms. Waters had in fall 2008 with federal officials that at least indirectly touched on the fate of OneUnited, a Boston-based bank with branches in Massachusetts, Florida and California. At the time of Ms. Waters’s phone calls, her husband, Sidney Williams, had recently resigned as a board member of OneUnited but still owned stock in it. OneUnited, like many banks at the time, was in a desperate position after losing $50 million worth of stock it had held in the housing finance companies Fannie Mae and Freddie Mac, following their federal takeover.

Ms. Waters’s lawyers have argued that her appeals to the Treasury Department were on behalf of the National Bankers Association, a decades-old industry group that represents dozens of banks owned by minorities and women. The association’s membership includes OneUnited, and the bank’s top executive, Robert P. Cooper, was then the chairman-elect of the group. (Excerpt) Read more at nytimes.com ...

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ANALYSIS----CONG WATERS' HUSBAND HAS TIES TO BANK THAT RECEIVED FEDERAL BAILOUT FUNDS. Authorities need to determine whether Mr Waters colluded to engage in money-laundering activities which may have involved (1) violating state and federal RICO statutes; (2) securities fraud, (3) mail fraud (4) electronic fraud, (5) corporate theft (6) failing to report wrongdoing (7) breach of fiduciary duty (8) running a non-profit as an illegal racketeering enterprise, (9) accounting fraud, (10) using and creating slush funds.

ACTION NEEDED An external audit might uncover millions missing through government fraud.

Investigators might find that charges could be filed, into embezzlement schemes. Prosecutors might use RICO as a lever to pry open the massive cover-up of government corruption that is available through “discovery” within the named entities. The RICO device might refresh the memories of recalcitrant wrongdoers, and might expose primary evidence.

L/E might prosecute individuals along with their co-conspirators, and subsets of them, on RICO charges, on grounds that they conspired to keep taxpayers from learning of the scope and dimension of government fraud, and schemes designed to cheat taxpayers.

Phony official financial reports may have hidden theft; bank accountants and bookkeepers may have been employed in order to keep thievery secret.

Taxpayers demand to know if the Waters' received money from banks and other financial institutions in the form of loans, bonuses, equity positions in business entities doing business with the bank. Investigations may find that others signed off on paperwork and financial forms prepared or verified as true by the Waters.

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ANALYSIS

Did the Waters file false bank loan applications to take equity positions in companies doing business with his bank, then conspire to payoff the bank loans by rigging and inflating bids for government contracts, then paid off bank loans when the tax monies rolled in?

In raids of the suspects' homes and offices, law enforcement might find evidence of the financial trail that linked government fraud and monies to personal payments for cars, trips, luxury items.

The FBI should interrogate the Waters to determine if the bank received anything else of value ---such as political cover, and whether collusion to misuse Congessional influence was involved.

FBI TIP PAGE http://tips.fbi.gov/ (you may remain anonymous)

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POSSIBLE CHARGES FACED BY CONG WATERS Official acts prohibited, misuse of Congressional funds, abuse of public office, violating oath of office, misuse of government position, abuse of government power; conflict of interest; influence buying; conspiracy to deceive; misuse of elective office, collusion, conspiracy to collude.

Waters' official campaign finance records filed with the FEC, and state election commission, should be scrutinized for possible violations. Determine if names of Waters' contributors are legit and whether Waters illegally used campaign funds, and/or whether Waters received campaign contributions to influence Congressional votes.

Waters may have colluded to give something of value, a govt gratuity, a job, etc, in exchange for getting govt monies to her husband.

.....the ethics committee report on Charlie Rangel involves his efforts to "close" a $10 million gift "to create AIG Hall" as part of the Rangel Center at the City College of New York. .......

Rep. Marcia L. Fudge (D-Ohio), a member of the Black Caucus, introduced a resolution that would strip the ethics panel of some of its power and allow House members to keep unflattering reports from public view. The caucus has stood behind Rangel even as other House members have called for his resignation.

THE RANGEL SWINDLE (especially for you Marcia) Just in case Marcia forgot, let's review the RANGEL SWINDLE especially for the Congresswoman.

(1) Took a “homestead” tax deduction meant for year-round DC residents - though he legally resides in New York;

(2) Rangel paid no taxes on his luxe property in the Caribbean;

(3) Has four rent-stabilized Harlem apartments (one is a campaign office);

(4) Improperly stored his car in a House parking garage;

(5) The NY Times reported oil-drilling businessman Eugene Isenberg made a $1 million pledge toward building The Rangel School for Public Service at City College of New York. Rangel later preserved a controversial offshore tax loophole that saved millions for Isenberg’s company. The Isenberg-Nabors deal is, potentially, far more serious: It reeks of a quid pro quo between Rangel’s official duties and fund-raising for his personal project. The Times reported that Rangel held meetings the same day, at the same hotel, with Isenberg to discuss the CCNY project and then with Nabors’ chief lobbyist on the tax loophole;

(6) Took free trips sponsored by corporate lobbyists;

(7) Used Congressional stationery to raise money for the tax-exempt Charles B. Rangel Center for Public Service.

(8)"Forgot" he had a Merrill Lynch Account and an account with the Congressional Credit Union (between $250,000 and $500,000 each). How did he amass that cash, A congressman for 40 years is not paid enough to have that kind of cash. Except for his townhouse sale, where did all that cash come from? Did he earn it? Inherit it? Pay taxes on it?

(9) Rangel needs to prove where he spent $2 million he received from Congressional allocations (tax dollars), plus another $700,000 from the Dept of HUD (tax dollars), that went to the tax-exempt Charles B. Rangel Center for Public Service.

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Rangel's multiple ties with tax-exempt foundations smell to high heaven. The IRS says the biggest potential for IRS fraud are tax-exempt non-profits doing deals with other tax-exempt non-profits----all posing as do-gooder "foundations" and “charities.”

Rangel’s pricey offshore real estate deals are entwined with his financial connections to several tax-exempt entities. There are at least four tax-exempt entities connected to Rangel‘s finances:

(1) The Charles B. Rangel Center for Public Service got $2 million from Congressional allocations, plus another $700,000 from the Dept of HUD,

(2) The NY Carib News Foundation (organized financing for Rangel’s island-hopping luxe Caribbean trips),

(3) The Ann S. Kheel Charitable Trust---supposedly aids "disadvantaged neighborhoods" gave $440,000 to The Charles B. Rangel Center (the largest single donation in the charity's 4-year history). Theodore Kheel, Esq, VP of Grupo Punta Cana Operating Company, (mortgage holder on Rangel’s luxury villa), donated $17,000 to Rangel's congressional campaigns and $52,000 to a Rangel-run political action committee since 1990, federal filings show. (Ann Kheel is his late wife).

(4) The NY-based "tax-exempt Carib News Foundation" subsidized Rangel’s trips to luxury island resorts---perfect places to hide money from the taxman.

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EXCERPT FROM 5-PAGE REPORT........members of the Congressional Black Caucus attended the 13th annual Caribbean Multi-National Business Conference in sun-drenched St. Maarten......enjoying free airfare, meals and hotel rooms paid for by IBM, AT&T, Verizon, Citigroup, Pfizer, Macy's and American Airlines..... Citigroup that last week received a massive bailout, ponied up $100,000 according to one lobbyist....and has supported the conference for several years, but would not reveal an amount.

The yearly event - held in a Caribbean country - draws black politicians, as well as community activists, lobbyists and special-interest groups looking to promote agendas.....the main goal is "promoting business relationships between America's largest firms and the Caribbean's most successful enterprises."

American Airlines sent its contribution directly to the Congressional Black Caucus Foundation, which is not listed as a sponsor of the St. Maarten event.

"The Carib News Foundation is the sole sponsor for the trip....corporations are contributors to the Foundation. Carib News Foundation pays for more than half of the symposium."

Sponsor Karl Rodney, Carib News CEO, said the Carib News Foundation is a charity and allowed to sponsor trips for elected officials. Carib News also publishes a newspaper covering the Carib community in New York. But IRS spokesman Kevin McKeon said Carib News is not listed as a charty. There are no publicly available tax filings for the group, and it is not listed with the NY AG as required by NY state.

Sonesta resort at St. Maarten

In its filings to the Ethics Committee for the luxury St. Maarten trip, the tax-exempt Carib News did not disclose corporate sponsorships paying for the conference. Mr Rodney, the Carib News CEO, filed a "Private Sponsor Travel Certification Form" in October, checking the box that says, "I represent that the trip sponsor(s) has not accepted from any other source funds earmarked directly or indirectly to finance any aspect of the trip."

============================================== REFERENCE The published list of known money-laundering havens includes Panama, the Bahamas, the Cayman Islands, the Cook Islands, Dominica, the Marshall Islands, Nauru, Niue, Panama, the Philippines, St. Kitts, Israel, and the Grenadines. Suspected tax havens include Cyprus, Gibraltar, Monaco, and Antigua.

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