U.S. Rep. Charlie Rangel had no angle in rent-cash flap - lawyer says

8 Sep 2008 // Labor lawyer Ted Kheel Friday defended Rep. Charles Rangel for not reporting $75,000 in rental income from a Caribbean vacation home on his tax returns.

Kheel said Rangel's failure to disclose the income from an oceanfront villa in the Dominican Republic was nothing more than an oversight.

"It could not have been more innocent," he said.

Rangel received twice-yearly payments from a villa he owns in a time-sharing resort that Kheel built as part of a larger development to turn Punta Cana into a tourist mecca.

Partners in the resort include fashion designer Oscar de la Renta and singer Julio Iglesias.

Rangel, the powerful chairman of the tax-writing House Ways and Means Committee, has owned the three-bedroom "casita" since 1987.

"I know Charlie Rangel as a man of integrity," Kheel said. "He would never do anything wrong deliberately."

Rangel's lawyer Lanny Davis produced documents late Friday showing the Punta Cana Yacht Club resort gave Rangel a loan with a 10.5% rate of interest to buy the $80,000 villa.

Two years later, the resort stopped charging Rangel and other U.S. investors because the rental income failed to meet projections, the documents show. The loan has been repaid.

Davis said Rangel and his wife did not report the $75,000 in rental income to the IRS because they did not realize they had to. The New York Times first reported the tax issues regarding the rental income.

"The Rangels simply made an error in interpreting what was happening," Davis said.

He said Rangel, who was unavailable for comment, would file amended returns for prior years.

Davis said an accountant has advised him that Rangel will likely have to pay nothing in back taxes to the IRS, but "several thousand dollars" to New York State.

In July, Rangel was criticized for having four rent-stabilized apartments in a Harlem building, including one that was used for a campaign office.

He has defended the apartments he lives in, but said he'll close the campaign office, which violates election law.