Rangel tries to explain taxes on Dominican Villa

WASHINGTON — U.S. Rep. Charles Rangel, D-N.Y., said Wednesday that "cultural and language barriers" had hindered him from understanding the finances of his Dominican Republic beach house, and he vowed to repay several thousand dollars in federal taxes he owes after failing to report $75,000 in rental income from the villa.

At a news conference, Rangel, chairman of the powerful House Ways and Means Committee, said he had not been aware of the income and unpaid taxes, in part because he had trouble getting detailed financial statements from the resort's managers in the Dominican Republic.

"Every time I thought I was getting somewhere, they'd start speaking Spanish," Rangel said.

The explanation was greeted with skepticism by some people in his district, where Spanish is the primary language in nearly half the households. Rangel's congressional Web site can be instantly translated to Spanish with two clicks of a computer mouse.

He brushed aside calls that he step down as chairman of the Ways and Means Committee and accused Republicans who have demanded he do so of trying to exploit his financial missteps.

"I really don't believe making mistakes means you have to give up your career," he said.

Rangel, a lawyer who has been a member of the powerful tax-writing committee for three decades, has been on the defensive in recent months because of disclosures about the villa, his rent-stabilized apartments in Upper Manhattan and his use of congressional stationery to solicit financial support for a City University center that will bear his name.

Rangel, 78, said he had asked the House ethics committee to investigate the issues surrounding the villa, which include his failure to pay taxes on the rental income and the resort developer's decision to waive the interest on a mortgage extended to him to buy the home. He had previously asked the committee to examine his rent-stabilized apartments and his fundraising for the City University center.

He also pledged to apologize if he is found to have violated House rules.

"I personally feel I have done nothing morally wrong," he said. Pressed about how, given his position and background, he could be ignorant of the tax rules, he answered: "I never had any idea that I got any income."

Rangel bought the beachfront house at the Punta Cana Resort & Club in 1988. The resort has emerged as one of the most desirable in the Caribbean.

He said Wednesday that he had never used the home more than four days in any calendar year. He said he had occasionally let other members of Congress stay at his villa for honeymoons or holidays but declined to name them.

Rangel said that at times in the past 20 years, he tried to get the resort to send financial statements more regularly and asked for help from Theodore Kheel, a lawyer who was a principal investor in the project.

But Rangel said he was stymied by the company's bureaucracy and his inability to speak Spanish. He said it took a bilingual team assembled by his lawyer, Lanny Davis, to sort the villa's finances out in recent days.

Rangel conceded Wednesday that he had been "irresponsible" in failing to gather the information needed to report the income on his taxes or financial-disclosure forms.

Rangel said his accountants were calculating the total he owes in unpaid taxes over the past five years but it was unlikely to exceed $5,000 to the IRS. Davis said Rangel would probably owe another $5,000 to New York state and New York City combined.