November 8, 2007

Charlie's Monument To His Donors

Charlie Rangel recently cost the American taxpayer $3 million in earmarks for his Monument to Me, a series of proposals to fund programs at CCNY that use his name as titles. Rangel may cost American taxpayers billions with his latest tax schemes, one of which benefits those nearest and dearest to his campaign coffers -- including a donor already undergoing an IRS audit:

The chairman of the House Ways and Means Committee has proposed legislation that would effectively halt some current tax audits of people who get a tax break for living and operating a business in the United States Virgin Islands.

Many beneficiaries of the tax break are campaign contributors to the lawmaker, Representative Charles B. Rangel, Democrat of New York, according to data collected by CQ MoneyLine, which tracks political contributions.

At least one of them, Richard G. Vento, is currently under audit, according to court filings. Mr. Vento gave $4,400 last year to the Baucus-Rangel Leadership Fund, which supports Mr. Rangel and Senator Max Baucus, the Montana Democrat who heads the Senate Finance Committee.

Beneficiaries of the tax break including Michael W. Masters and Richard H. Driehaus, money managers, accounted for more than half the $51,900 that individuals in the Virgin Islands gave last year to Rangel for Congress, the chairman’s campaign organization. Mr. Rangel raised almost three times as much from such donors last year as in any other year in the MoneyLine database.

Mr. Rangel says his measure is simply an effort to address a discrepancy between the Internal Revenue Service’s treatment of Americans living in the Virgin Islands and its treatment of their mainland counterparts. Except in cases of fraud, the agency has three years to cite errors in a mainland resident’s tax payments. But since 2006, under I.R.S. rulings stemming from the agency’s efforts to crack down on abuse of the tax break, it has faced no such time limit in auditing Virgin Islands residents.

I seem to recall a presidential election not too long ago when people like Vento came under specific fire for their off-shore activities. Democrats talked about hiking taxes and eliminating shelters for investors in the same class as Masters and Dreihaus, who put their cash out of the reach of the IRS. John Kerry campaigned on the notion that closing loopholes that drove investors to the Virgin Islands would recoup enough cash to fund some of the social projects that he proposed to start as President.

My, how times have changed! Now having donors from Virgin Island investors has become the fashion -- as has treating them with deference and expanded tax shelters. Rangel wants to protect his donors by essentially interfering with IRS audits already in progress, while at the same time sticking Americans with new taxes that will hammer their own investment opportunities.

Rangel's manipulation of laws for the benefit of his donors should gain the widest possible exposure. Will Democrats who demagogued on the offshore-investor issue sit quietly while rangel runs interference for the same class of presumed villains with the IRS? Or will they put an end to the obvious payoff that Rangel attempted to deliver for their financial support?


TrackBack URL for this entry: