A renewed ethics probe of Rep. Charles B. Rangel of New York poses an embarrassing distraction for House Democrats, as the Ways and Means Committee that he leads will oversee House Speaker Nancy Pelosi’s plans for an $825 billion economic rescue and a tax increase on wealthy Americans.
The slow-moving investigation of Mr. Rangel’s home finances, unpaid taxes and dodgy fundraising is now in the hands of Rep. Zoe Lofgren, California Democrat and the new chairman of the Committee on Standards and Ethical Conduct.
She has not signaled whether the committee will take up the probe begun last year or start anew. Either way, the inquiry overshadows Mr. Rangel as he takes a key position, as head of the House’s tax-writing panel, in tackling the recession and a looming battle over tax increases.
“It is more of a distraction because of the economic shape we are in, and so much of it is before his committee,” said Melanie Sloan, executive director of the nonpartisan watchdog group Citizens for Responsibility and Ethics in Washington.
Miss Sloan said the speaker and other Democratic leaders shrugged off Mr. Rangel’s problems and left the issue to the ethics committee, which rarely takes tough action against fellow members of Congress. Yet it persists as a “nagging thing,” she said.
The episode is especially nagging for Mrs. Pelosi, who pledged during the 2006 campaign to “drain the swamp” of corruption in Congress when Democrats won the majority.
Mrs. Pelosi resisted calls for the long-serving New York Democrat to give up the chairmanship, despite revelations that Mr. Rangel failed to pay more than $10,000 in taxes on rental income from his villa in the Dominican Republic and may have received an improper financial benefit from leasing four rent-stabilized New York apartments for use as a residence and a campaign office.
The ethics committee also is investigating whether Mr. Rangel abused the power of his office in soliciting donations for the Charles B. Rangel Center for Public Service at the City College of New York.
Mrs. Pelosi has said little more than she “looks forward to seeing the report” from the ethics committee.
She expected the committee to wrap up the probe by the end of last session. But the case was prolonged, likely because of its growing complexity, particularly reports that Mr. Rangel switched his position on tax legislation to help a donor to the college center that bears his name.
Mr. Rangel, 78, insists that he may have fouled up his tax bookkeeping but never violated the public’s trust. He took the rare step of requesting an ethics investigation of himself to clear his name after a flurry of damning reports that first appeared in the New York Times.
“I have nothing to hide and never have,” Mr. Rangel said.
The ethics probe began in the fall but was interrupted when Congress adjourned last month. The committee was not reconstituted with new members until last week.
The four new members, who were approved along with the new chairman Thursday by the Democratic caucus, are Democrats Ben Chandler of Kentucky, G.K. Butterfield of North Carolina, Kathy Castor of Florida and Peter Welch of Vermont.
Mrs. Lofgren pledged to work in a bipartisan manner to maintain the highest of ethical standards and protect the public interest.
“The American people deserve a Congress that holds their interest above all others,” she said.
In addition to investigating Mr. Rangel, the committee has seven other cases left over from last session. But the names of those seven lawmakers under investigation have not been revealed.
Republicans have derided Mr. Rangel’s namesake center as the lawmaker’s “monument to me” after the New York Democrat secured more than $2 million in federal funding for the project.
The center, which is in Mr. Rangel’s Harlem district, is aimed at attracting young people from diverse racial and economic backgrounds to study public service. It also will house a library of Mr. Rangel’s legislative papers from his more than 40 years in politics.
A newspaper report recently detailed how a businessman pledged $1 million for the center while courting Mr. Rangel’s help in preserving a tax loophole that saved his company millions of dollars nestled in offshore accounts.
Since June 2005, Mr. Rangel has sent about 100 fundraising letters to such financial heavyweights as Donald Trump and Hank Greenberg, former chief executive of American International Group. He said that the letters on congressional stationery never explicitly asked for donations, but instead sought to set up meetings where funding would be solicited.