Mr. Rangel is just one of many lawmakers who looked the other way when AIG and others needed regulations

For Rangel, a Complicated Relationship With A.I.G.
New York Times
By DAVID KOCIENIEWSKI
March 20, 2009

As Congress moved this week to levy a 90 percent tax on the $165 million in bonuses paid to executives of the American International Group, one of the more conspicuous expressions of outrage came from Representative Charles B. Rangel.

Charles B. Rangel once tried to woo A.I.G. to donate $10 million to a school to be named in his honor.

As public anger over the bonuses surged, Mr. Rangel on Wednesday introduced a bill that would seize most of the bonuses paid to A.I.G., which received billions in taxpayer bailout funds.

“Dreams have been shattered and homes have been lost because a small group of executives were motivated by greed rather than preserving a system that America and the world depend upon,” said Mr. Rangel, a Harlem Democrat and chairman of the powerful House Ways and Means Committee.

After the measure passed the House overwhelmingly the next day, Mr. Rangel congratulated his colleagues on their bold action, saying that A.I.G. executives “have gotten away with murder in what they’ve done to our communities.”

But Mr. Rangel’s indignation was a reversal of his position earlier in the week, when he opposed heavily taxing the bonuses and warned his colleagues to restrain themselves from allowing the public outcry to warp their judgment.

What is more, the congressman’s relationship with A.I.G. is a complicated one; as recently as last year, he was trying to woo the company to donate $10 million to a school to be named in his honor. And while A.I.G. officials mulled the request, Mr. Rangel supported a provision in a tax bill that saved the company millions of dollars.

For decades, Mr. Rangel has been a close friend of Maurice R. Greenberg, the chief executive of A.I.G. until 2005, and until recently one of the company’s biggest shareholders. Mr. Greenberg has sponsored fund-raisers on Mr. Rangel’s behalf, and in 2007, a foundation controlled by Mr. Greenberg gave $5 million to the school, the Charles B. Rangel Center for Public Service at the City College of New York.

City College records show that the effort by Mr. Rangel and college officials to persuade A.I.G. to donate to the school went on for two years. In a 2007 e-mail message obtained by The New York Times, City College’s director of development, Rachelle Butler, wrote that Mr. Rangel suggested in early 2006 that fund-raisers concentrate on A.I.G. for a contribution. Two years later — on April 21, 2008 — Mr. Rangel attended a meeting at A.I.G. to ask the company to support the school, without specifically discussing a donation.

A month later, as A.I.G. was still considering a financial contribution, the top executive who had attended the fund-raising meeting wrote a letter to Mr. Rangel, urging him to support a provision of a tax bill that would save A.I.G. millions of dollars a year.

Mr. Rangel dropped his opposition to the tax measure, which eventually became law. But he has said that City College’s request for the $10 million, and the letter from A.I.G., played no part in his decision. A colleague in the New York delegation, Representative Joseph Crowley, said that he was responsible for persuading Mr. Rangel to support the tax change. A.I.G. has never donated to the Rangel Center.

But with Mr. Rangel’s personal finances and fund-raising for City College now the subject of an ethics investigation, some Republicans questioned whether Mr. Rangel’s public protestations about the bonuses were designed to eclipse his connections to the company over the years.

Representative John Carter, a Republican of Texas, described Mr. Rangel, who had received $110,000 in campaign donations from A.I.G, as one of several Democrats who had “exchanged legislative favors” with the company...