Ethics report: Trip planners coordinated with Rangel's office

Rep. Charles Rangel (D-N.Y.) asked the ethics committee in 2006 whether he could solicit corporations to pick up costs for a Caribbean business conference he and other members of Congress have attended for years, according to the House investigative committee’s report on the matter.

His staffers also prepared a memorandum for him in 2008 that discussed HSBC bank’s decision to pull out of the conference after press accounts questioned the propriety of the Caribbean conference, and offered suggestions on how Rangel could help prevent HSBC from bowing out.

HSBC later donated $25,000 for the trip to St. Maarten, $10,000 more than it provided to the same Caribbean conference the year before.

When questioned by the ethics panel’s investigative subcommittee about the matter, Rangel said he was unaware of the corporate sponsorship of the Caribbean conferences and stated that he “did not know what HSBC was,” according to a report issued by the ethics committee’s investigative subcommittee that reviewed the matter.

The ethics committee on Thursday admonished Rangel, chairman of the Ways and Means Committee, for improperly accepting reimbursement for two trips to the Caribbean and ordered him to repay the costs.

In doing so, however, the panel found that two of his staffers, including his former chief of staff who was later fired – knew that corporate sponsors were underwriting the trip in violation of new House rules put in place after Democrats won the majority in 2006.

The committee did not find that Rangel himself was aware of the improper corporate sponsorship, but still found that he broke House gift rules by attending the conferences because he is responsible for his staffs’ knowledge and their actions.

The panel also exonerated four other members who attended the event who said they were unaware of the corporate sponsorships.

After reviewing the investigative report, ethics watchdogs are questioning Rangel’s and the other members’ truthfulness about their knowledge of the corporate sponsorship.

“It stretches credulity to think that, after asking the ethics committee about corporate donations in 2006 and after his staff had prepared a memo for him in 2008 about corporate contributions and after arriving and seeing extensive corporate signage at the event, that Rep. Rangel was oblivious to the role that corporate sponsors were playing in these trips,” said Meredith McGehee of the Campaign Legal Center.

“It is not enough to say he was unaware.  For members of Congress, the correct standard to be applied is ‘known or should have known,’” she said.

The investigative subcommittee’s report details numerous interactions between Rangel’s staff and the planners of the 2007 and 2008 Caribbean conferences in question. The Carib News Foundation, a non-profit affiliated with a newspaper catering to the Caribbean immigrant community in New York City, purported to be the sole sponsor of the trip when in reality, the ethics committee found that several corporations, including Citigroup, HSBC, Verizon, IBM, American Airlines and others, provided the money for the conferences at Caribbean beach resorts and the first-class air travel associated with it.

In addition to the HSBC memo, Karl Rodney, who heads the Carib News Foundation, told the investigative subcommittee that he included a “cc” to Rangel himself on letters soliciting corporations to become sponsors of the trips.

When asked why he did so, Rodney said it was for “informational purposes because he knew Rangel’s office had an interest in the conference and Caribbean interests.

“As I mentioned in my response to counsel, Mr. Rangel has always had an interest in the conference and through the years we worked with his staff as we have gone through the planning of the conference,” Rodney told the subcommittee, according to the report. “We sent it to him strictly for his information. He didn’t instruct us to. We didn’t ask him to. We sent it strictly as information.”

Rangel’s name, along with other members of Congress who did not attend the conference, also appeared on letters soliciting AT&T and American Airlines to become sponsors for the 2007 conference.

Language in each of the letters invites the corporations to “become one of the corporate sponsors of this history-making event.”

Letters to AT&T, Citibank, IBM, Macy’s East, HSBC Bank and Pfizer also promised prime sponsors “prime access to key elected officials through [a] private reception, seating at luncheon and dinner, photo opportunities, etc.”

Each letter contained the text “cc: Congressman Rangel” at the bottom.

Rangel’s counsel Michelle Sherwood wrote him a memo in 2008 after it appeared that HSBC Bank had threatened to withdraw its support as a result of an article in the New York Post questioning the propriety of the 2007 conference.

Faye Rodney, Karl’s wife, contacted Rangel’s New York district office in late September, to let the office know about HSBC’s withdrawal and to request Rangel’s support in convincing the bank to remain a sponsor.

In a memo written to Rangel about HSBC, Sherwood noted that Faye Rodney had called to “express her distress, displeasure, and great concern that executives from HSBC Bank informed her that they intend to pull their financial support from the 2008 Carib News Foundation Conference,” according to the report.

The memo also noted that Faye Rodney spoke with Sherwood, Jim Capel and Elbert Garcia (all Rangel staffers) regarding HSBC Bank’s decision and informed them that the Foundation’s “other major sponsor ATT [sic] is holding strong, but the revelation that HSBC is pulling out might well rattle other sponsors and put the future of the conference in jeopardy.”

The memo also suggested possible solutions to prevent HSBC’s withdrawal of sponsorship, including that Rangel or his office staff contact Bill Thompson, then-Comptroller of the City of New York, as well as Mayor Michael Bloomberg, to see if they could convince HSBC to keep its sponsorship.

“After conferring with [Rangel staffers] George [Dalley] and Emile [Milne], we determined that there are several options we might explore to preserve HSBC’s commitment to the Conference,” Sherwood wrote in her memo to Rangel.

The memo also noted that Thompson has “has consistently indicated” that he would “do whatever is necessary” to support Rangel.

HSBC officials told the investigative subcommittee they were never contacted by anyone from Rangel’s office, or by Thompson or Bloomberg.

In testimony before the committee, Rangel said he did not read the memo written by Sherwood and said Dalley, his former chief of staff, may have read it. He also denied discussing the matter with any staffer and said he never recommended any of the actions suggested by Sherwood in the memo.

Rangel also said he had never seen the corporate solicitation letters before and did not know why his name would appear on them. He also said he did not notice any corporate logos or banners placed on large signs and at the speaker’s podium at the conference.