Wednesday, February 18, 2009

Rahm Emmanuel's Rent Is Only Part Of His Ethical Debacle

Yet another chink in the armor of the democratic party's integrity. This is just another scandal piled on to the heap of Democratic scandals that have abounded lately.

NEWS broke last week that White House Chief of Staff, Rahm Emanuel lived rent- free for years in the home of Rep. Rosa De Lauro (D-Conn.). Emmanuel failed to disclose the gift, as congressional ethics rules mandate.

According to Dick Morris and Eileen McGann at The New York Post:
Emanuel is a multimillionaire, but lived for the last five years for free in the tony Capitol Hill townhouse owned by De Lauro and her husband, Democratic pollster Stan Greenberg.

During that time, he also served as chairman of the Democratic Congressional Campaign Committee - which gave Greenberg huge polling contracts. It paid Greenberg's firm $239,996 in 2006 and $317,775 in 2008. (Emanuel's own campaign committee has also paid Greenberg more than $50,000 since 2004.)

Emmanuel never disclosed his gift of a living space on his financial disclosure reports. He and De Lauro claim that it was just allowable "hospitality" between colleagues. Many argue that this housing should count as taxable income. The estimated worth of his housing was $100,000.

Then there is also the question of Rahm Emmanuel's service on the board of Freddie Mac. Emanuel served on the Freddie Mac board of directors during the time that the government-backed lender lied about its earnings, a leading contributor to the current economic meltdown.

The Federal Housing Enterprise Oversight Agency later singled out the Freddie Mac board as contributing to the fraud in 2000 and 2001 for "failing in its duty to follow up on matters brought to its attention." In other words, board members ignored the red flags waving in their faces.

The SEC later fined Freddie $50 million for its deliberate fraud in 2000, 2001 and 2002.


  1. I'm no fan of Emanuel; His ties to Israel are especially troubling to me. However, this claim seems a bit dubious to me. How many nights is someone allowed to spend at another person's house before it's considered a taxable gift? What about house-sitters? What if you let your friend's college student children live in your summer home during the off-season months so they don't have to pay dorm fees? Are those kids supposed to report this on their taxes as some sort of gift? Or is it just showing sensible hospitality to your friend's kids?

    How could we even begin to establish some sort of objective guidelines for this?

  2. Bint,

    I get what you are saying but I think the problem started here when Emmanuel didn't disclose the "gift" or "favor" or "someone else's hospitality that he benefitted financially from" or whatever you want to call it really, on his congrssional financial disclosure forms as he was required to by congressional ethics rules. That's what raised the red flag.

    The fact that he may have missed some obscure tax, which when given the recent tax scandals by our lawmakers is very minor, does not trouble me as much as the fact that he failed to follow ethics rules and disclose something that pretty obviously should have been disclosed on his forms. Which leads me to believe that he didn't disclose it for a reason. Let's face it. Rahm Emmanuel is not some aloof inexperienced college kid. He was a member of The House of Representatives and is now the right hand man of the leader of the free world. To think that he doesn't know the rules is an insult to his intelligence.

  3. Valerie,

    how would one measure the value of this gift/hospitality/potentially financially beneficial whatchamacallit? If his mother-in-law had him over for dinner on the first Friday of every month, is that a gift that he's supposed to disclose? What about if his staffers buy a King Cake for the office? Is that a financially beneficial gift that should be disclosed? After all, if he had to buy the King Cake himself, it would have cost him money.

    If this house-sitting thing is taxable income, then it is applicable to all citizens. Maybe we wouldn't mind sticking it to Emanuel, but it would be cutting off our nose to spite our face.

  4. Bint COME ON!!!

    Are you seriously saying that dinner from family or a birthday party cake from coworkers is the same thing as living with a fellow senator for 5 years free of charge??

    I don't care so much about the taxes. Its the fact that just about any moron off the street could see this is something that should have been disclosed but yet Rahm never seemed to have thought that through.