On April 21, 2008, Representative Charles B. Rangel met with officials of the American International Group, the now-troubled insurance giant, to ask for a donation to a school of public service that City College of New York was building in his honor.
Mr. Rangel had already helped secure a $5 million pledge for the project from a foundation controlled by Maurice R. Greenberg, one of the company’s largest shareholders and its former chief executive. And C.C.N.Y. officials, according to the school’s own records, had high hopes for A.I.G. — a donation of perhaps as much as $10 million.
The company has never made a contribution. But less than a month after Mr. Rangel met with its officials, the company turned to the congressman for help: A senior A.I.G. executive who had attended the fund-raising meeting wrote Mr. Rangel’s exchange with A.I.G. last spring appears to be at odds with the public statements he has made since his fund-raising for the school became an issue. When his approach to A.I.G. was first reported in The Washington Post in July, Mr. Rangel said that he could not recall any issues his committee might have considered in which A.I.G. had an interest.
“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,” the paper quoted Mr. Rangel as saying. Indeed, in Mr. Rangel’s formal submission to the House ethics committee, asking it to review his use of Congressional stationery in soliciting money for the school, he wrote, “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.”
Mr. Rangel, who had opposed the tax change A.I.G. was seeking — part of a much bigger piece of legislation — ultimately allowed it to be added to a bill he sponsored. Mr. Rangel’s aides, and fellow Democrats on the Ways and Means Committee, say that he agreed to the bill only after being persuaded by other members of Congress that it would help an array of American companies weather the economic uncertainty.
After Mr. Rangel’s office was asked in recent days about the letter from A.I.G., Janice Mays, counsel to the Ways and Means Committee, said a search of the committee’s records had not turned up a copy of it. But she said Mr. Rangel had already changed his mind about the tax provision before A.I.G. says it sent him the letter.
Federal statutes and House ethics rules forbid members of Congress from asking for anything of value from a person or company with business before them.
Ms. Mays said those rules did not prohibit members of Congress from raising money for nonprofit organizations, even from people or companies with interests before the government. And she said Mr. Rangel’s representation to the ethics committee last summer concerned only those instances in which he had written to potential donors on Congressional stationery, not those he might have met with personally in seeking donations.
A review of Congressional records indicate that A.I.G. had interests in a number of issues before Mr. Rangel — both prior to Mr. Greenberg’s gift and the congressman’s solicitation of A.I.G., and afterward.
Records kept by the Clerk of the House of Representatives indicate that during the past two years, A.I.G. has paid lobbyists to push for changes in at least 10 bills that have been handled by the Ways and Means Committee, including the $700 billion bailout bill that passed in October to stabilize the financial markets.
A.I.G. lobbyists, the records show, pushed for legislative items that would lower taxes on various life insurance products, offer foreign tax credits to multinational corporations and lower the corporate tax rate. The company’s financial services arm hired lobbyists to oppose a push to tax private equity income at a higher rate and to shape new reporting requirements for investment firms.
And because A.I.G. does business around the globe, the company also lobbied on trade issues, which are handled by the Ways and Means Committee.
The available public record shows that A.I.G. prevailed in some of its lobbying efforts and failed in others.
Asked two weeks ago to provide a detailed accounting of Mr. Rangel’s dealings with A.I.G. officials and lobbyists regarding legislation during the past two years, the congressman’s spokesman and lawyer have said they are unable to complete such a time-consuming task during the holidays. And they challenged the fairness of the request.
The New York Times this week sought a response from Mr. Rangel himself about whether, in general terms, he had any reservations about seeking the money and meeting with A.I.G. officials, and a major shareholder, given what the record suggests were the company’s interests before his committee.
Ms. Mays wrote on Friday: “The law expressly permits members of Congress to engage in fund-raising activity on behalf of nonprofits such as C.C.N.Y. and recognizes that donations will inevitably coincide with legislative activity.”
Ms. Mays said the $10 million figure contained in C.C.N.Y. records as the possible size of an A.I.G. contribution represented “an appropriate request” at that time “given the company’s other support for nonprofit educational activities.”
Mr. Norton, the A.I.G. spokesman, said there was no connection of any kind between Mr. Rangel’s bid for a donation and the company’s lobbying on the tax matter.
A.I.G., one of the world’s 20 largest corporations, has been at the center of several public crises during the past year.
In September, the company received an $85 billion federal bailout when its possible bankruptcy threatened to further undermine the teetering economy. Two months later, after an intensive lobbying effort involving the Treasury Department and Federal Reserve, terms of that financial rescue were enhanced and the amount of federal money involved swelled to $150 billion.
Details of the bailout have been negotiated primarily by the Treasury Department and Federal Reserve. Mr. Rangel’s aides have said he played no role in the bargaining. Democratic Congressional leaders who have been consulted by the Treasury Department about how much government assistance A.I.G. should receive and how the bailout should be structured said the congressman’s aides were correct.
“To say that Chairman Rangel has had minimal involvement in the bailout negotiations would be overstating things,” said Representative Barney Frank, Democrat of Massachusetts and chairman of the House Financial Services Committee.
Mr. Greenberg, who has clashed publicly and in lawsuits with the executives who succeeded him after he was forced out of A.I.G. in 2005, has been highly visible as the company’s problems have made it a ward of the federal government.
Mr. Greenberg has not returned repeated telephone calls over the past month requesting an interview about his dealings with Mr. Rangel and his donation to C.C.N.Y. A spokesman for C. V. Starr, the investment fund headed by Mr. Greenberg, said last week that Mr. Greenberg was out of the country and could not be reached.
Mr. Rangel’s spokesman on the Ways and Means Committee declined to say whether the congressman had spoken with Mr. Greenberg about his strategy to persuade federal officials to revise the tax-funded rescue plan, but said in an e-mail message, “The bailout appears to have done nothing to benefit Mr. Greenberg as a shareholder, with the value of A.I.G. stock dropping from $60 at the beginning of the year to $1.50 a share.”
At a news conference last summer, Mr. Rangel said that he and Mr. Greenberg had forged a friendship based on their service in the Korean War, during which both men were awarded a Bronze Star for valor.
So in July 2006, when Mr. Rangel wrote to 100 philanthropic organizations seeking support for the C.C.N.Y. project, one was sent to an administrator at the Starr Foundation, where Mr. Greenberg serves as the chairman. The foundation did not make a donation in 2006, according to C.C.N.Y. officials. In March 2007, two months after Mr. Rangel had been elevated to Ways and Means chairman, he wrote a letter directly to Mr. Greenberg, using his Congressional stationery.
By the end of the year, Mr. Greenberg had pledged $5 million, by far the largest contribution to a project that has raised $11 million to date.
Ms. Mays said the Starr Foundation had a “well-established record of charitable giving,” and was “a logical potential source of funding for C.C.N.Y.”
In 2008, Mr. Rangel participated in a meeting with officials at A.I.G., to ask for their support. Mr. Norton, the A.I.G. spokesman, said that the purpose of the meeting was to ask whether A.I.G. would make a financial contribution to C.C.N.Y., although he did not know whether a specific dollar figure was discussed. Mr. Rangel and the C.C.N.Y. officials left the meeting without a commitment.
But several weeks later, in a letter dated May 13, Edward T. Cloonan, the highest-ranking A.I.G. official who attended the fund-raising meeting with Mr. Rangel, wrote to the congressman asking him to support the extension of a tax provision designed to help American-based multinational companies lower their obligation to the I.R.S., which was set to expire. Mr. Rangel, who had announced plans to add an array of “tax extenders” to an energy bill he was preparing to introduce that month, opposed extending the specific measure Mr. Cloonan and A.I.G. were lobbying for.
The measure, known as the “subpart F active financing exception,” would benefit a broad coalition of American companies, including hundreds of financial services firms, and according to estimates by the nonpartisan Joint Taxation Committee would cost the Treasury $3.97 billion in revenue in 2009 and 2010. A.I.G., which Congressional records indicate spent more than $9.5 million on lobbying in 2008, had its own lobbyists and three outside firms pushing to extend the measure.
By early May 2008, concern about the damage that American businesses would suffer if the tax break was allowed to expire had grown so great that Democrats on the Ways and Means Committee held two meetings to ask Mr. Rangel to extend it.
Representative Joseph Crowley, a Democrat from Queens, said he pressed the issue because it helped Citigroup, a major employer in his district. At least two committee caucus meetings to discuss many aspects of the legislation followed — on May 7 and May 13 — and Mr. Rangel relented, Mr. Crowley said, and agreed to extend the measure for one year.
“While Chairman Rangel opposed extending the provision this year, a majority of the Democrats on the Ways and Means Committee supported doing so and the chairman listened to his membership,” Congressman Crowley said in an e-mailed statement.
On the date of the second caucus meeting, Mr. Cloonan wrote to Mr. Rangel, according to Mr. Norton. “We urge the Ways and Means Committee to include the tax provision commonly known as subpart F exception for active financing income in the current round of tax extenders legislation,” the letter said, according Mr. Norton.Mr. Crowley’s spokeswoman said the congressman was unaware A.I.G. had written Mr. Rangel about the matter and had thought that “due to other distractions, A.I.G. was not active in lobbying the issue.”
The spokeswoman, Angela Barranco, in a statement Friday, said Mr. Rangel had changed his mind after the May 7 meeting. Mr. Rangel’s aides say that a document dated May 12 from the nonpartisan joint committee on taxation indicated that he had signed off on the provision.
Mr. Rangel included the provision in the Renewable Energy and Job Creation Act of 2008, which was introduced on May 14 and which passed the House a week later, then stalled in the Senate over the summer.
But in September, after the House of Representatives rejected the first attempt to pass a $700 billion bill intended to stave off the collapse of the banking system, leaders in the Senate revived Mr. Rangel’s bill as part of a compromise that won approval in both houses. . (More) Excerpted from NYT at: http://www.nytimes.com/2009/01/03/nyregion/03rangel.html?_r=2&em=&pagewanted=print