Questions Raised About Rangel's Relationship With AIG

After what had been a scandal-plagued year for House Ways and Means Chairman Charles Rangel, the local congressman must have been looking to turn over a new leaf in 2009. But it only took three days into the new year to find his name making headlines for murky dealings—this time with a potential conflict of interest in soliciting charitable donations from the recently bailed out insurance giant AIG. And this time it's not even the Post breathing down Rangel's neck as usual, but an investigative cover story in today's New York Times.

Rangel turned to AIG and its former CEO and hefty shareholder Maurice Greenberg while raising funds for a school of public service being built in his honor by CCNY (the opening of which has been delayed with Rangel under investigation). Around the time he was seeking $10 million from the insurance company and had secured $5 million from Greenberg (almost half the total amount raised), he defended against a conflict by saying, “I can’t think of one piece of legislation that impacts them, and there has never been a time that they’ve raised any legislation to me." He also wrote during the same period, “So far as I am aware, none of those whom I wrote had any pending requests into my office, lobbied me regarding any legislation before my committee, or asked me for assistance on legislation in which they had a special interest.”

But less than a month after he met with AIG officials looking for the donation, Rangel received a letter from Edward Cloonan, the highest-ranking AIG official at the meeting asking him to support the extension of a tax provision designed to help American-based multinational companies lower their obligation to the IRS, which was set to expire. Rangel, who had opposed the tax change AIG was seeking, ultimately allowed it to be added to a bill he sponsored.

While Rangel would not have been allowed to solicit his own funds from a company he was dealing with on the house floor, his aides say house rules did not prohibit members of Congress from raising money for nonprofit organizations, even from people or companies with interests before the government. They also defend that AIG dealings he turned over the the congressional ethics investigation underway on him are only concerned with those instances in which he had written to potential donors on Congressional stationery, not those he might have met with personally in seeking donations.

As far as any entanglement with his CCNY sales pitch and the bailout sought by AIG—originally for $85 billion and then up to $150 bil—Rangel appears to be in the clear. Chief orchestrator of the bailout(s) Congressman Barney Frank tells the Times, “To say that Chairman Rangel has had minimal involvement in the bailout negotiations would be overstating things.”