By Martin Vaughan Of DOW JONES NEWSWIRES WASHINGTON -(Dow Jones)- Despite a barrage of negative publicity surrounding alleged ethics breaches, Rep. Charles Rangel, D-N.Y., so far continues to hold support from fellow Democrats, Democratic insiders say.
House Speaker Nancy Pelosi, D-Calif., has set a Jan. 3 deadline for the House Committee on Standards of Official Conduct, reviewing an array of charges against Rangel, to complete its work.
Calls for Rangel to step aside as chairman of the tax-writing House Ways and Means Committee that began with House Republicans have spread to major newspapers like the New York Times and. most recently, the Washington Post in a Saturday editorial.
The House ethics panel is investigating three complaints, filed by Rangel himself after embarrassing news reports about his personal finances.
The allegations include that Rangel failed to report and pay taxes on income from a Dominican Republic vacation home, that he used House stationery to solicit donations for the Charles B. Rangel Center at the City College of New York, and that he improperly used four rent-controlled apartments at his Harlem residence.
But even supporters of Rangel acknowledge privately that the most damaging revelations to date came in a New York Times article last week.
That article detailed how Eugene Isenberg, CEO of Bermuda-based oil-driller Nabors Industries, pledged $1 million to the Rangel Center around the same time as Rangel's Ways and Means Committee helped to bury a Senate proposal that would have taken away a tax benefit from Nabors.
On Tuesday, campaign finance watchdog group Common Cause called on the House ethics panel to expand its inquiry to encompass the Times' revelations about Rangel's connection to Isenberg. It remains unclear whether the panel will examine that connection as part of its inquiry into fundraising for the Charles B. Rangel Center.
Rangel's attorney, Leslie Kiernan, did not return calls seeking comment for this article.
But this week, Rangel has gone on the offensive in an effort to prove that he did not intervene on Nabors' behalf.
The issue surrounds a 2004 law that aimed to ensure that firms cannot avoid U.S. taxes simply by moving their headquarters to an offshore tax haven.
That loophole-closer took effect in March 2003, grandfathering in Nabors and four other formerly Texas-based oil firms that had moved offshore in the summer of 2002.
Rangel aides hasten to point out that the deal, which allowed Nabors to continue to enjoy the offshore tax benefit, was negotiated by Senate Finance Chairman Max Baucus, D-Mont., Sen. Charles Grassley, R-Iowa, and then-Ways and Means Chairman Bill Thomas, R-Calif. Rangel was not involved in those discussions.
In 2007, as part of legislation to raise the minimum wage and cut taxes for small businesses, the Senate voted to bump the loophole-closer's effective date back by one year, effectively yanking the tax benefit from Nabors, Noble Corp., and two others.
Rangel opposed that Senate provision for several reasons, his aides argue, none of them having to do with Isenberg. For starters, it would have re-opened a tax change that was settled in 2004. Some tax policymakers frown on so-called retroactive tax increases.
In addition, Rangel's only instructions to staff regarding the bill were to develop a bipartisan bill with his Republican counterpart, Rep. Jim McCrery, R-La, House Ways and Means Tax Counsel John Buckley told Dow Jones.
Democratic committee staff knew well that Republicans would oppose the tax increase on Nabors as well as other Senate-passed tax-increasing measures. Rangel aides said those provisions were off the table more than a week before Rangel's Feb. 12 meeting with Kenneth J. Kies, a lobbyist for Nabors, which was the focus of the Times article.
When it came to negotiations between the Senate and House on the final package, Rangel and Baucus agreed on a $5 billion total, but left the specifics to staff. Rangel spokesman Matthew Beck also said it was Senate negotiators who ultimately dropped their demand for the tax provision affecting Nabors.
"Neither the inversion issue, nor the other offsets in the Senate bill were the subject of discussions between Chairmen Baucus and Rangel in the final conference," said Buckley. "In fact, the only substantive provision Baucus and Rangel discussed was the rural counties tax credit piece."
Few Democrats on the Hill expect the ethics process to result in Rangel being stripped of his chairmanship, according to interviews with staff and Democratic lobbyists. Rangel has enjoyed warm relations with the Speaker, and has deep support among Ways and Means members.
"Rangel has little to worry about from the House ethics committee," said Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington. She said the panel in past complaints has soft-pedaled its findings.
Removing Rangel from his chairmanship would actually require a House vote. "I wouldn't look for that to happen anytime soon," said Sloan.
But one senior aide to a House Democrat said Pelosi will face pressure to uphold the image of rooting out corruption that helped sweep Democrats into the majority.
"The optics of the Times article were awful," the aide said. "Come January, Republicans will be bringing their privileged resolutions over and over again" calling for Rangel to step down, the aide said.
Removing Rangel from his post might also set off a fight for the chairmanship among senior Democrats at a time when President-elect Barack Obama will be seeking a smooth transition to advance his economic agenda.
The next most senior Democrat, Rep. Pete Stark of California, is seen as so liberal on tax, trade and welfare issues that centrist Democrats in the House caucus would be loathe to see him take up the gavel. But the next three most senior members - Rep. Sander Levin, D-Mich., Rep. Jim McDermott, D-Wash., and Rep. John Lewis, D-Ga. - will not please moderates either, according to a House aide.
-By Martin Vaughan, Dow Jones Newswires; 202-862-9244; martin.vaughan@dowjones.com
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(END) Dow Jones Newswires
December 02, 2008 17:53 ET (22:53 GMT)

Publié le 02 Décembre 2008 Copyright © 2008 Dowjones