House Ways and Means Chairman Charlie Rangel (D-N.Y.) appears to have made a $70,000 profit from the 2006 sale of a Florida condominium he had purchased two years earlier, but he never reported the profit on his Congressional financial disclosure forms.
However, Rangels failure to disclose may not be a violation of House rules, because he never reported any income from the condo, despite listing it as a rental property. In fact, he might not have had to report the purchase or sale of the condo at all.
House rules which are based on a federal disclosure law require Members to report their assets and income every year.
But personal residences are exempt from reporting requirements, and even second or third residences can be exempt as long as they do not generate income.
Rangels chief of staff, George Dalley, acknowledged Monday that there have been myriad errors on Rangels disclosure forms. But he said these errors were not an attempt at evasion or hiding income ... or any slick operation. It was a clumsy operation. We made mistakes, and we will live with them.
Roll Call sent Rangels attorney, Lanny Davis, a detailed list of questions Friday about errors on the Congressmans financial disclosure forms, particularly the fact that Rangel had never reported income from the sale of stocks and other investments.
Dalley said Monday that he and Rangel simply did not take sufficient care in filling out the disclosure forms and understanding the complexity of the rules.
On his financial disclosure form for calendar year 2004, Rangel reported that he bought a condo in the Miami Beach area town of Sunny Isles, Fla., for between $100,000 and $250,000. He also listed the condo among his personal assets, noting the value of the condo that year at $50,000 to $100,000.
But according to Florida land records and local real estate listings, Rangel and his wife purchased the condo for $335,000.
On his 2006 disclosure form, Rangel reported selling the place for between $250,000 and $500,000, but the following year he amended that report, setting the sale price at $100,000 to $250,000.
Florida land records place the actual July 2006 sale price at $405,000, meaning the Rangels made a $70,000 profit on the deal, which was never reported on Rangels financial disclosure forms.
The ethics committee manual for filling out disclosure forms points out clearly that practically any security or real property that you purchased, sold or exchanged during the year will have to be reported on both the transactions list and the income tables.
But personal residences are exempt, and second homes that are really investment properties are a gray area. Rangels disclosure forms indicate that he held the Florida condo for rental purposes, but he never reported any income. Dalley said it was never rented, which means Rangel may not have been required to report the purchase, the sale or the profit. Apparently, neither Rangel nor Dalley knew about this loophole.
Dalley said it was Alma Rangel, the Congressmans wife, who purchased the condo, as part of a plan she had that the couple would retire to Florida. He decided he wasnt really ready for retirement, Dalley said, and his wife saw it his way and the condo was ultimately sold.