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Rangel Aide Disputes NYT On Tax Loophole Benefiting Rangel Center Donor

Looking to deflect criticism next week when members return, embattled Ways and Means Committeee Chairman Charlie Rangel (D-N.Y.) had a top committee aide release statement on  a controversial 2007 tax bill.

Rangel is trying to refute a recent New York Times story suggesting he retained a lucrative tax loophole that benefitted Eugene Isenberg, CEO of oil-drilling company Nabors Industries. Isenberg pledged $1 million to the Charles B. Rangel Center for Public Service at City College of New York.

Rangel is under investigation by the House ethics committee for his efforts to raise funds from wealthy donors for the center, and today's statement by John Buckley, chief tax counsel, means that Buckley is now could be called in to testify if the ethics panel decides to expand its probe to include this issue.

Late this afternoon from Buckley saying that Rangel did not work to defend the loophole affecting Nabors and three other companies. These companies had undergone "corporate inversions" earlier in the decade. The companies formally relocated overseas to avoid U.S. taxes, but the move brought loud complaints from Congress. In 2004, Congress passed a bill forbidding such inversions, but Nabors and the other three companies were grandfathered out.

According to Buckley, House Republicans, and not Rangel, objected to inclusion of the inversion provision in the 2007 bill. The Senate Finance Committee had already approved the measure, which would have meant Nabors and the other companies would owe millions in back taxes to the U.S. government.

Isenberg had hired noted GOP lobbyist Ken Kies to block the provision, and the two men met with Rangel on Feb. 12, 2007, the same day that Ways and Means was marking up its version of the tax bill. Isenberg and Rangel had met earlier that morning on Isenberg's donation to the Rangel Center, according to the Times. Kies said Isenberg was not in that first meeting, which also included Manhattan District Attorney Robert Morgenthau.

"There was a difference between the House Republicans and their Republican colleague Senator Grassley on the merits of each of the major revenue offsets that were contained in the Senate small business tax bill. House Republicans opposed each of them," Buckley said today. 

"Only a partisan bill in the House could have retained any of those offsets. As a result, the offsets in the House bill were consensus items developed pursuant to agreements between me and the Ways and Means Republican staff."
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