Rangel Cheats on Taxes, Pelosi’s Nephew Caught in Homebuilder Scandal
Rep. Charlie Rangel (D-NY) failed to disclose millions on tax forms between 2002 and 2007.
Rangel’s “corrections” to his financial-disclosure statements from 2002 through 2007 are stunning, even by the low standards of this “error”-prone paperwork-filer — who, by the way, happens to be in charge of writing the nation’s tax laws.
The Harlem Dem now admits that he failed to disclose several million dollars in income and business deals during those years — including up to $1 million from the sale of a building on 132nd Street.
…Last May, the Sunday Post disclosed yet another Rangel scandal, involving corporate junkets to the Caribbean.
Yes, the House — which is controlled by fellow Democrats — has begun investigations. But so far it’s failed to act. And there’s scant reason to think it ever will.
Dems may rather tolerate such sleaze than take on the Ways and Means Committee chairman, but they do so only by smearing their own reputations.
But this shouldn’t stop law-enforcement officials from launching their own probe. Rangel’s lengthy, inexplicable “oversights” demand immediate action.
Rep. Boehner (R-OH) has called for Rangel to step down from his post as chairman.
With accusations of tax evasion mounting against Rep. Charles B. Rangel, the top House Republican on Friday called for the New York Democrat to step aside as chairman of the Ways and Means Committee.
House Minority Leader John A. Boehner said that by remaining chairman amid reports he failed to report or pay taxes on some assets, Mr. Rangel is insulting the House and further eroding voters’ faith in Washington.
“Show the American people that having their confidence in your leadership means more to you than having the opportunity to wield power,” Mr. Boehner, Ohio Republican, said in a letter to Mr. Rangel, urging the man he said he considers a friend to give up the committee gavel while an ethics investigation proceeds.
This issue was mentioned as an example of the lack of accountability taken by Democrat leadership in a media interview by financial analyst Max Keiser of investment adviser Mike Morgan.
Speaker Pelosi, who has refused to ask Rangel to step aside, has a scandal of her own to deal with. Her nephew, Laurence Pelosi, was involved in a ring of shady business deals between the real estate developer Lennar, the city of San Francisco, the California Public Employees Retirement System (CalPERS), and Morgan Stanley.
Laurence Pelosi was a senior executive at Lennar when his cousin for whom he had served as campaign treasurer, Mayor Gavin Newsom, signed an agreement with Lennar to develop the Hunters Point Shipyard.
Nepotism is defined by Webster’s dictionary as political favoritism based on family relationships. In an email to the San Francisco Bay View, Laurence Pelosi verified that he was a Lennar senior executive in March of 2004 at the time San Francisco Mayor Gavin Newsom, his cousin for whom he had served as mayoral campaign treasurer, had signed the Hunters Point Shipyard Conveyance Agreement at the behest of Laurence’s Aunt Nancy Pelosi, speaker of the U.S. House of Representatives.
San Francisco Campaign and Governmental Conduct Code Section 3.212 governs political decision making involving family members and Section 3.214 requires disclosure of personal, business or professional relationships for elected officials of the City and County of San Francisco.
Laurence Pelosi is the son of Ronald Pelosi and Barbara Newsom Callan. He is Nancy Pelosi’s nephew by marriage. Laurence Pelosi was identified as the vice president of naval base acquisitions for Lennar in a program he participated in concerning the master plan for development of the southeast community held at Mission Bay in 2006.
After resigning from Lennar in May of 2004 – immediately before the shipyard conveyance legislation went before numerous City boards and commissions for approval – Laurence Pelosi joined the board of directors of the influential urban development think tank SPUR (San Francisco Planning and Urban Research) and went to work for Morgan Stanley.
Newsom, as chief executive officer of the City and County of San Francisco, took what is clearly a discretionary action by entering into the Conveyance Agreement for the Hunters Point Shipyard with the U.S. Navy. The Conveyance Agreement set a specific timetable for giving the City a portion of the shipyard – Parcel A – as well as giving commercial development rights to Lennar/BVHP, a limited liability private, non-governmental corporation.
While Laurence Pelosi served as its senior executive, Lennar also developed and sold $2 billion worth of property to the California Public Employees Retirement System (CalPERS). After the value of the property plummeted, the state brought in Morgan Stanley, who Pelosi had gone to work for, to review and advise on the land deals.
The California Public Employees’ Retirement System, the largest U.S. public pension fund, may sell part of its $2 billion in residential land holdings after the investments lost 31 percent last year amid falling home prices and forecasts of further declines.
Sacramento-based Calpers hired Morgan Stanley to review seven land deals it made with joint-venture partners and real-estate advisers, said fund spokeswoman Pat Macht. The fund may decide to sell some of the land, purchased to develop new homes, or renegotiate the partnerships.
…One of the Calpers ventures under review is LandSource Communities Development LLC, a 15,000-acre tract north of Los Angeles known as Newhall Ranch, which filed for Chapter 11 bankruptcy protection June 8 after failing to restructure its debts with lenders. Calpers paid $970 million in cash and property to homebuilder Lennar Corp. through adviser MacFarlane Partners for 62 percent of the development in January 2007.
In 2007 Morgan Stanley would purchase thousands of properties from Lennar, including those in California which Laurence Pelosi had developed, for 40 percent of their original cost.
Lennar Corp. has dumped a portfolio of 11,000 properties for 40 percent of their previously-stated book value.
Lennar (Charts, Fortune 500), the nation’s largest builder in terms of revenue, is selling the properties to a joint venture it has established with the real estate arm of Wall Street bank Morgan Stanley. Morgan Stanley will own 80 percent of the joint venture, while Lennar will own 20 percent.
Lennar announced the deal late Friday as its fiscal fourth quarter came to a close. It is selling the properties for $525 million, even though it said their book value as of Sept. 30 stood at $1.3 billion. Lennar also will receive fees for continuing to manage the properties, which include mix of raw land as well as partially and fully developed homesites.
John Mack, the former CEO of Morgan Stanley, was hired along with a team of 39 executives by the Treasury Department to manage the $200 billion bailout of Fannie Mae and Freddie Mac.
Morgan Stanley: behind the Fannie-Freddie bailout
Morgan Stanley (MS) CEO John Mack may have buffed his own image as well as his firm’s by advising the U.S. Treasury on the historic bailouts of Fannie Mae (FNM) and Freddie Mac (FRE). But the assignment didn’t come without a cost. In July, when Treasury Secretary Hank Paulson phoned Mack and asked for his help on assessing what do do with the reeling mortgage-loan giants, Morgan was set to receive at least $20 million in fees from Freddie for helping to raise billions of dollars in capital. The firm was also lining up potential advisory work for Fannie, which could have inflated Morgan’s total take to some $40 million.
“We had a whole team working with Freddie,” recalls Mack, in his first interview about the government’s Fannie-Freddie rescue plan.
…Mack ended up assigning two Morgan Stanley veterans to lead the team that worked with Treasury. Vice chairman Bob Scully typically handles Morgan Stanley’s most complicated transactions, including work with KKR and General Motors (GM) (for example, the sale of 51% of GMAC to private equity firm Cerberus). Ruth Porat heads Morgan’s financial institutions business. Together, they led a team of 39 executives, employing a divide-and-conquer approach. They assigned teams dedicated to mortgage analytics (to assess Freddie and Fannie’s capital positions and needs), capital markets (to take the pulse of stock- and bond-holders), and regulatory issues.