Conservative watchdog group targeted Rangel

By Susan Crabtree
02/02/09

When the news broke that Rep. Charles Rangel (D-N.Y.) may have been abusing New York City rent-control laws, Peter Flaherty and Ken Boehm smelled blood.

The two investigators are principals and founders of the National Legal and Policy Center, a conservative watchdog group whose research has spurred news stories taking Rangel to task for alleged ethical violations.

The center has time, money and seasoned Washington hands, who research publicly available information.

The center’s nonprofit status allows it to keep its funding private. Flaherty wouldn’t disclose his donor list but acknowledged that the biggest source of funds comes from foundations associated with Richard Mellon Scaife, the billionaire heir to the Mellon fortune and well-known supporter of conservative public policy organizations.

But it is not just Democrats who are the center’s targets. Some big-spending Republicans, such as former Sen. Ted Stevens (Alaska) and Rep. Don Young (Alaska), also have found themselves in the center’s crosshairs.

Scaife’s donations make up less than 10 percent of the center’s $1.4 million annual budget, with the lion’s share of the rest coming from individuals and averaging $200, Flaherty said.

Previously, Flaherty and Boehm stayed behind the scenes, but now they’re stepping out of the shadows and claiming credit for their work.

Flaherty, the center’s president, claims credit for three articles that appeared in the New York Post.

One focused on the tens of thousands of dollars in rental income from a Dominican villa Rangel failed to disclose on his taxes and congressional financial disclosure forms. A second raised questions about the sponsorship of a trip Rangel took to St. Martin, and the third charged Rangel with taking a potentially illegal “homestead” tax break on a D.C. residence while he occupied New York rent-controlled apartments.

The Washington Post ran a version of the homestead story three days after the New York Post broke it. The New York Post did not comment, and Lyndsey Layton, who wrote the Washington Post story, said only that she called the D.C. tax office about the potential violation.

The center has provided The Hill with information, which this newspaper has independently confirmed.

When informed that a conservative watchdog provided information that sparked embarrassing news stories, Rangel, chairman of the powerful Ways and Means Committee, said: “This is helpful because there was no questions in anybody’s minds why I had been the target of so [many] allegations. I have not wanted to use the word conspiracy — I guess it’s because I am chairman of the Ways and Means Committee that this group would want to do this.

“I think it’s unfortunate, but I’m glad I’m not a younger member that this could really affect … How many Republicans or Democrats can really survive something like this?”

Flaherty and Boehm, friends since their days at Citizens for Reagan, say their work is legitimate and motivated less by a conservative point of view than a belief that bigger government leads to more opportunities for corruption.

The center fueled a 2006 story and prompted an FBI investigation into whether Rep. Alan Mollohan (D-W.Va.) financially benefited from steering money to a nonprofit group in his district. Mollohan was not charged with any wrongdoing, but the stories prompted him to resign as a member of the ethics committee.

After The New York Times story about the alleged abuse of rent-controlled apartments, Flaherty and Boehm pulled Rangel’s financial disclosure records. A line disclosing the value of Rangel’s villa jumped off the page.

“It’s pretty typical for someone to be renting out a beach villa that they’re not using most of the year,” Flaherty said.

They sent an attorney to the Punta Cana resort to search property records, where resort officials revealed the location of Rangel’s villa and disclosed that it was rented out at $1,100 a night during the high season.

The center turned the information over to the New York Post, which sent its reporter to verify it. They ran the story as well as an unflattering photo of Rangel asleep on a lounge chair on the beach in front of the villa.

Flaherty and Boehm then turned their attention to an annual Caribbean trip that Rangel and several other members of the Congressional Black Caucus have taken for several years.

They found out that major corporations donated hundreds of thousands of dollars of the trip’s costs, even though a nonprofit had taken credit for doing so. New ethics laws Democrats instituted in 2007 ban such practices.

Meanwhile, Boehm decided to look up records of D.C. residents claiming the Homestead Act tax break. When Rangel’s name turned up, Boehm knew it posed another ethics problem for the lawmaker.

“What has struck us over the years is how much is hiding in plain sight,” Flaherty said.

Rangel argues that the organization’s conservative funding discredits the allegations against him.

In C-SPAN interview Sunday, Rangel took aim at the group, saying, “Somebody paid an organization to recklessly target me for whatever purpose … to get reporters to cover it.”

Rangel called the accusations “false and reckless” and attacked the reporting of all the stories alleging ethics violations, not just the center’s research. He said questions about his ethics were a “mosquito on an elephant’s back.”

He stressed his 38 years in Congress and status as a Korean War veteran, adding, “I don’t deserve for anyone to be dealing with a lot of reckless rumors when I haven’t been charged with anything.”