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Rep. Charlie Rangel (D-N.Y.) is asking the House ethics committee to allow him to use campaign contributions to pay a forensic auditor to investigate his tax returns and personal financial disclosures, his lawyer said Tuesday.
Crisis management experts said Rangels legal expenses and a detailed audit could end up costing more than $100,000, which is likely to be far more than any tax penalty he is ultimately required to pay for failure to report income from his various properties.
With the support of Speaker Nancy Pelosi (D-Calif.), Rangel defied House Republicans on Tuesday, announcing that he would not step down from his post as chairman of the House Ways and Means Committee.
Rangel has been dogged by reports that he failed to properly disclose his assets on tax forms and Congressional financial disclosure forms. He estimated that he could owe $10,000 in back taxes and penalties.
In July, he asked the House Committee on Standards of Official Conduct to investigate his leasing arrangements on four apartments in a New York complex and his fundraising for a City College of New York program. Last week, Rangel asked the committee to look into his failure to report rental income from a villa he owns in the Dominican Republic.
On Sunday, Rangel announced that he will hire a forensic accounting firm to prepare a comprehensive review of his tax and financial disclosure forms for the past 20 years, which apparently have myriad errors. That report will be submitted to the ethics committee as well.
Last week, Rangel asked the committee for permission to use campaign funds to pay his legal expenses for the first two investigations.
His attorney, Lanny Davis, said Tuesday that Rangels legal team is preparing a follow-up letter asking for permission to also use his campaign treasury to pay for expenses related to the Dominican villa investigation and the forensic audit.
Eric Dezenhall, president of the crisis management firm Dezenhall Resources, said that between the legal assistance provided by Davis and his team and hiring a top-notch accounting firm, you are dealing with [a bill] in the low six figures at least.
Rangels decision to ask the ethics committee to investigate his compliance with House rules and to hire a third-party investigator to comb through his finances may push any result past the Nov. 4 election, but it is not clear that matters much to Rangel. He is in a rematch against a Republican opponent who has no campaign committee registered with the Federal Election Commission and an Independent who entered the race days ago.
Mr. Rangel has instructed me to get this done as quickly as possible. ... No delay is helpful to us, Davis said.
Meanwhile, Rangel will not give up his gavel.
Davis told reporters in a conference call Tuesday that Rangel has not considered, nor has it ever been on the table, that he would step aside from his current position as chairman of the House Ways and Means Committee.
Pelosi later told reporters: I see no reason why Mr. Rangel should step down. ... [He] has called for the ethics committee to look into his disclosures, etc., and ... I have supported his call for the ethics committee to look into that.