Representative Charles Rangel (D-NY) is 15th-term member of the House of Representatives representing New York’s 15th district. Rep. Rangel’s ethics issues stem from leasing rent controlled apartments, improperly using congressional stationary and failing to disclose rental income on his personal financial disclosure forms.
Improper Rental Arrangement
Rep. Rangel rented three apartments at Lenox Terrace, an apartment building in New York City owned by the Olnick Organization, and combined them into one large unit, which he uses as his residence. Rep. Rangel paid a total monthly rent of $3,264 for the three units: $1,329 for a two bedroom unit, $1,329 for a one-bedroom unit, and $606 for a studio. For new tenants, such apartments would rent for approximately $2,600, $1,865, and $1,300, respectively, for a total of $5,765. In addition, Rep. Rangel’s campaign committee and political action committee jointly rented another one-bedroom apartment in the building for office use at a cost of $630 a month.
Under New York state and city rent regulations, tenants can continue renewing stabilized leases in such apartments only as long as the apartments are used as their primary residences. Landlords routinely require tenants who have more than one rent-stabilized apartments to give up additional units. Because Rep. Rangel was able to maintain at least two apartments in addition to his primary residence at rent-stabilized rates, by failing to pay fair-market rent on these apartments, Rep. Rangel may have violated the House gifts rule.
Violation of Campaign Finance Law
Renting a rent-stabilized apartment for use as an office by campaign and political action committees raises federal election law issues because the committees did not pay fair market rent. The difference between the fair market value of the apartment might be considered an in-kind contribution made by the owners of Lenox Terrace, the Olnick Organization, but neither the campaign committee nor the political action committee reported receiving such in-kind contributions. In addition, given that Rep. Rangel’s campaign and political action committees rented the apartment at below market rates for many years, they likely received excessive in-kind contributions. Finally, if the Olnick Organization is a corporation, the campaign and political action committees may have received illegal corporation contributions.
Improper Use of Congressional Stationary
Beginning in 2005, Rep. Rangel solicited funds for the Charles B. Rangel Center for Public Service at the City College of New York using his official congressional letterhead. Rep. Rangel confirmed that he sent at least 150 letters on the stationary to individuals and foundations asking for support for the center. Officials at the City College acknowledge that Rep. Rangel has assisted them in rasing funds for the center.
House rules prohibits the use of congressional letterhead for any mailing paid for with non-appropriated funds. As a result, by sending out letters on his official letterhead on behalf of City College of New York, Rep. Rangel likely has violated House rules.
Dominican Republic Villa
Rep. Rangel owns a beachfront villa on a Dominican Republic resort that rents for between $500 and $1,100 a night. Although Rep. Rangel’s villa is generally booked solid in the high season of December 15 through April 15, Rep. Rangel did not declare any rental income on his personal financial disclosure forms for the years from 1996-2000 and in 2006 and 2007, though he did declare income in other years. In total, Rep. Rangel failed to disclose $75,000 in rental income since 1988.
When Rep. Rangel purchased the villa in 1988, the company developing the resort gave him the mortgage, to be paid back over seven years at a rate of 10.5%. In 1990, the interest was waived for seven early investors including Rep. Rangel because the resort was generating less income than projected. Rep. Rangel has claimed he was unaware that he was not paying interest on the mortgage.
By failing to include the rental income on his personal financial disclosure forms, Rep. Rangel may have violated the Ethics in Government Act and House rules. In addition, if when the interest was waived on his loan for the property, Rep. Rangel received better terms than others similarly situated, the loan may have violated the House gifts rule.
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