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Rangel admits owing $5,000 to IRS over villa income

Head of House tax-code panel regrets 'errors'

'I really don't believe that making mistakes means that you have to give up your career.' - Representative Charles Rangel "I really don't believe that making mistakes means that you have to give up your career." - Representative Charles Rangel
By Devlin Barrett
Associated Press / September 11, 2008
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WASHINGTON - The head of the House tax-writing committee acknowledged yesterday that he owes about $5,000 to the Internal Revenue Service for failing to report income on his returns.

But Representative Charles Rangel, a New York Democrat who is chairman of the powerful Ways and Means Committee, said at a news conference that this should not mean he must cede his high position in Congress.

As lead tax man in the House, Rangel has a powerful say over changes to the nation's tax code. And by his admission, he has no excuse for not reporting years worth of rental income on a beach vacation property he owns in the Dominican Republic.

"I sincerely regret and take personal responsibility for these errors," Rangel said yesterday in asking the House ethics committee to look into the matter. At another point, he called the omission "irresponsible" on his part and said it would be corrected in amended filings to both the IRS and the Congress.

"I really don't believe that making mistakes means that you have to give up your career," the lawmaker said in a long-running talk with reporters about various ethics committee inquiries into his finances and other matters.

Rangel's total back tax bill will probably be something approaching $10,000 when factoring in state and local levies as well, his lawyer said.

The 78-year-old lawmaker maintained that over the course of two decades, he simply didn't know the details of his mortgage on the beach property, how much rent he received from it, or that the rent should have been reported.

Rangel did say that fellow lawmakers of both parties had stayed as guests at the beach house, but declined to name them.

After nearly 38 years in Congress, Rangel said this was the first time he had found himself in such a position.

"As chairman of the Ways and Means Committee, I am held to a higher standard of propriety," Rangel said. Asked whether he had lived up to that standard, he replied: "Of course not."

He bristled when asked whether his problems could hurt his party in the November elections.

"How the hell would I know how people look at this?" he said.

Republicans are already trying to use Rangel's mistakes to show that Democrats cannot claim higher moral ground on issues of ethics and corruption.

The spokesman for the House Republican campaign committee, Ken Spain, said Rangel should "go on a permanent vacation and trade his powerful committee chair in for his favorite lounge chair on the beach."

The internal ethics panel is examining Rangel's unusual deal for the beach villa, as well as four rent-stabilized apartments he uses in his Harlem district, and a series of letters he wrote seeking support for a New York education center named after him.

Rangel bought the beach house in 1988 for a price of $82,750, with a down payment of $28,900 and a mortgage of $53,850. Over the next 15 years, he did not make any payments directly for the mortgage, but the managers of the resort property used rental income from the property to gradually pay down the mortgage. During all but two years of the mortgage, Rangel paid no interest on it.

His lawyers estimate he failed to report some $75,000 in rental income over a 20-year span, but that only posed a tax problem for the congressman when he sold a residence in New York City four years ago and his tax liabilities briefly changed.

The ethics committee is also set to examine how Rangel came to rent four rent-controlled units in his Harlem district, as well as his use of official congressional stationery to try to attract potential donors to a college center named after him.

Yesterday, a watchdog group called Citizens for Responsibility and Ethics in Washington added Rangel to its list of "most corrupt" lawmakers.

Rangel called that "sad and unfair."

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