The Ethical Barometer

The Barometer has been covering each painful incident about Representative Charles Rangel as they percolated out in dribs and drabs.  Rangel is now in settlement contentions (apparently not talks) with the ethics committee on his pending ethics charges and hearings.  Here are some classic quotes from the former chair of the House Ways and Means Committee:

• He has referred to the proceedings as “a boil that needs to be lanced.” Always the charmer with the right words for the occasion.
• “It’s kind of awkward to explain to your kids and grandkids but, hey, I’m in the kitchen and I’m not walking out.”[1] Yes, and something’s boiling.
• “Nobody in his right mind would be looking forward to something like this in public.  But frankly I knew one thing, when a person is elected to public office, there is a higher level of honesty and openness and transparency that is on him rather than just the ordinary citizen.”[2] Yes, so many of us ordinary citizens get away with not reporting rental income to the IRS.  The Barometer wishes she had a nickel for every New York City resident who has 4 rent-controlled properties. Oh, what times are these when the man who writes the Internal Revenue Code is expected to abide by it.  Who could live up to the standards this House ethics committee seeks to impose on Mr. Rangel?

 

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[1] Devlin Barrett and Brody Mullins, “Democrats Press Rangel to Settle,” Wall Street Journal, July 24-25, 2010, p. A3.

[2] David Kocieniewski and Eric Lipton, “Rangel in Talks on Settlement of Ethics Cases,” New York Times, July 24, 2010, p. A1.

Cash is flowing out of Afghanistan – about $10 million per day (that’s $3.65 billion) – and it ends up in the hands of terrorist groups.  The irony is that a good portion of the cash comes from U.S. reconstruction efforts in the country.  There are currently 223 corruption investigation pending with 106 centering on bribery and conflicts of interests in the awarding of the contracts for reconstruction, 73 involving procurement fraud, and 35 involving theft.  Investigations are up, but so also in the outflow of cash.  Hospitals are not rebuilt, roads are not reconstructed, and a country that has been through 3 decades of war cannot get back on its feet.  If we could just get the money past the pilferers to the projects . . .   Corruption benefits the few at the expense of many.

Here’s some good news on the faith our elected representatives have in our markets:  Several members of congress and/or their spouses positioned themselves short in the market.  Their bets, by buying call options in 2008, were that the value of the stocks would go down.  They were correct, of course, and they made money as a result.  At least one of the representatives positioned himself short in a defense contractor and he sits on the Senate appropriations committee.  You can talk yourself blue explaining that financial advisers make these decisions, no laws were broken, . . . , but, somehow it just doesn’t seem right.

Over the past five years, 33 SEC employees viewed pornographic materials on either or both their desktop computers or laptops. Seventeen of the 33 were senior SEC employees who earned between $99,000 and $222,000 per year. The employees have been disciplined, including suspensions and terminations. One senior enforcement attorney was devoting a full 8 hours per day to viewing porn. Little wonder that a few Ponzi schemes passed them by. One accountant was denied access to a porn site 16,000 times by a government firewall.  Persistence is a virtue in many areas, but . . .

Judge Emmet Sullivan said he had never seen “mishandling and misconduct” like that of the prosecutors in the U.S. v. Stevens case.  The Barometer has no doubt that former Senator Ted Stevens (R. Alaska) crossed a few ethical lines in his relationships with some contractors and others.  However, legal breach is different from ethical breach, and the former requires proof.  In dismissing the conviction, Judge Sullivan appointed a special prosecutor to look into the conduct of the Justice Department prosecutors in their pursuit of a conviction.  The good judge noted that the prosecutors did not disclose exculpatory evidence and that former U.S. Attorney General, Michael Mukasey, ignored letters from defense attorneys outlining the ongoing problems with honest disclosures.

The Barometer encourages students, business people, and professionals to develop their own credos.  A credo consists of things you would never do, lines you would never cross to gt a job, to keep a job, to meet your numbers for the quarter, or to win a case.  The exercise is difficult for most.  “Never?” they counter, “I can’t say ‘Never!’”  Yet, it is possible to draw lines.
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He seems almost elf-like, this Blago-appointed senator from Illinois.  Teeny-tiny, when his towering attorney stands next to him at the microphones.  Small in stature and even smaller in commanding respect.  Like so many in Washington these days, Senator Burris is in over his head.  Less than one month into his senate tenure, Mr. Burris needs his tall lawyer because he failed to disclose conversations with and about ex-governor Rod Blagojevich when he testified before the Illinois House about his appointment by Blago to the U.S. Senate seat vacated by President Obama.  However, wiretaps don’t lie.  (more…)

We now have a connection between AIG, the insurance giant we taxpayers now own a portion of, and Rep. Charles Rangel (D. N.Y.).  Maurice Greenberg (former CEO of AIG) has pledged $5 million to the City College of New York for the school of public service to be named in Rangel’s honor.  But, Mr. Rangel also met with AIG execs on April 21, 2008.  City College’s records indicate it had hopes of a $10 million donation from the company after the meeting.  Shortly after the meeting, Mr. Rangel changed his position on a tax bill to include a provision favorable to AIG.  Previously, Mr. Rangel was on record as opposing the AIG-beneficial provision.  Mr. Rangel’s staff has indicated he was persuaded to change his mind on the provision by fellow members of Congress.  However, there was a post-April 21 letter from an AIG executive on the provision, a letter that urged Mr. Rangel to support the provision because it would save AIG millions. 

The law allows Mr. Rangel to seek donations from constituents for nonprofit institutions.  However, it ain’t the law we are worried about here.  Our concern is qpq — quid pro quo.  Its appearance.  Its effects.  Its power.  And the Barometer worries about the troubling Rangel denial amidst a sequence of supposedly serendipitous events. 

Since 2002, the Barometer has expressed concerns about AIG.  Would that someone could have heeded the call back then.  Where there is ethical smoke and PR mirrors, there could be some fire. The Barometer worries now about Mr. Rangel.  Shaving the treetops on legality is risky business.  ‘Tis even riskier government. 

For those of you keeping score, Charles Rangel has become to Washington, D.C. and Harlem what Kwame Kilpatrick was to Detroit during his mayoral days there.  You just didn’t know from day to day what new charges of ethical and/or legal lapses would emerge.  So, The Barometer begins the Rangel Round-Up.  The Barometer will attempt to keep you posted on what’s happening with the representative from Harlem (D., NY).  The Barometer is considering a National Forest Service type of posting:  “Ethical Breach Danger Today:  High       Medium      Low.”  Here’s a Rangel summary:  1.  In rent-controlled NYC, Rangel managed to wrangle several apartments from his landlord at the rock-bottom prices that characterize rent-control markets.  When asked about his cornering of the Harlem real estate, Rep. Rangel responded, “What?  There’s a problem here?” 2.  Rep. Rangel, who chairs the House Ways and Means Committee, the group responsible for writing the tax code, failed to report income he earned over two decades from renting his villa in the Dominican Republic. Rangel responded in several ways, “No hablo espanol,” was one defense, followed by (more…)