WASHINGTON BUREAU — The House Committee on Standards of Official Conduct says in a description of ethics violations lodged against Rep. Charles Rangel that a $5 million grant he solicited from a foundation then associated with American International Group Inc. was used to create an academic institution that bears his name.
In a “statement of alleged violation,” the committee also alleges that, in April 2008, Rangel, D-N.Y., met with lobbyists for AIG, New York (NYSE:AIG), in hopes of “closing a $10 million gift” for the Charles B. Rangel Center for Public Service, to create an “AIG Hall” in a new facility for the center.
The center is now in a student center that is part of the City College of New York.
The committee alleges that the list of individuals and companies that Rangel and his staff members solicited for donations to the center also included the MetLife Foundation, New York, and New York Life Insurance Company, New York.
Rangel obtained $1 million in pledges and matching contributions for the center from Eugene Isenberg, chairman of Nabors Industries Ltd., Hamilton, Bermuda, an oil and gas drilling contractor, in November 2006, then met with Isenberg and Ken Kies, senior counsel for the Association for Advanced Life Underwriting, Reston, Va., in February 2007 to discuss “retroactivity of tax provisions related to inverted companies,” in February 2006. Isenberg has testified that he did not seek or receive any special consideration from Rangel in connection with the center contributions, and that he did not discuss the center when he communicated with Rangel about legislation in 2007, according to Rangel’s statement in response to the statement of alleged violation. Transcript citations in Rangel’s statement indicate that Kies said the center was not discussed during the meeting he and Isenberg had with Rangel. The transcripts themselves are confidential, according to a conduct committee staffer.
[Editor's Note: Although Kies is a lobbyist for the AALU on tax and executive compensation issues, the specific issue cited in the allegations, the "retroactivity of tax provisions related to inverted companies," is not an issue for which Kies lobbies in the AALU's behalf, officials of the trade group say. The AALU is not mentioned in the statement of alleged violation, and the statement of allegations does not say that Rangel sought contributions for the Rangel Center from Kies or the AALU.]
Rangel and his staff asked a total of 100 foundations and companies for donations to the Rangel Center. In addition to insurers, the list included many different types of companies — including banks, investment banks, telecommunications companies and pharmaceutical companies — and foundations affiliated with those companies.
Investigators have been looking into Rangel’s activities since late 2008.
A “statement of facts” in the statement of alleged violation says the $5 million donation from the Starr Foundation, New York, made in June 2007, was approved just 8 days after Rangel met with Maurice Greenberg, the chairman of the Starr Foundation, who at that point was also chairman of AIG.
The April 2008 meeting during which Rangel asked for the $10 million donation for the Rangel Center was with Edward Cloonan, an AIG lobbyist, according to the statement of facts.
“At the AIG meeting, a potential donation to the Rangel Center was discussed,” the statement of facts says. “AIG raised concerns about a potential donation, including the potential headline risk.”
Rangel, the statement says, “asked AIG, at least twice, what was necessary to get this done.”
Rangel is charged with violating the letter and spirit of House rules by engaging in conduct that violated the solicitation and gift ban; violating the code of ethics for government service; violating the House gift rule; violating U.S. Postal Service laws and Franking Commission regulations; violating House Office Building Commission’s regulations; violating the Purpose Law and the Member’s Congressional Handbook; and violating the Ethics in Government Act and House Rule XXVI.
Talks aimed at settling the case have failed, and a trial before the 8-member House Committee on Official Conduct is likely to start in September, when Congress returns.
In a statement denying the charges, Rangel’s lawyers say, “The undisputed evidence in the record–assembled by the Investigative Subcommittee over its nearly two-year investigation–is that Congressman Rangel did not dispense any political favors, that he did not intentionally violate any law, rule or regulation, and that he did not misuse his public office for private gain.”
William Werfelman, a spokesman for New York Life, says, “Given that the Rangel matter is an ongoing investigation, the company will not be discussing it.”
AIG says, “Mr. Rangel asked us for a contribution to the CCNY center, and we declined to make one.”
Efforts are being made to contact the other companies involved.
UPDATE: This version of the article includes additional information from Rangel’s statement.