The New York Times reported late Monday that Rangel went to bat for a tax loophole that benefited the oil-drilling company headed by an executive who pledged $1 million to the college, which was raising money at the time for the Charles B. Rangel School of Public Service.
Rangel told the newspaper he sided with Nabors Industries on a tax shelter at about the same time the company's chief executive, Eugene Isenberg, made the largest pledge to City College because he did not think it would be fair to expose Nabors to what would amount to a retroactive tax increase.
Isenberg insisted there was "no quid pro quo" in his discussions with the school even though Rangel's efforts preserved a valuable loophole for Nabors.
The shelter in question protected Nabors and three other companies that had established corporate headquarters in the Caribbean to reduce their U.S. tax exposure. The Times said that while Rangel was a vocal critic of companies that off-shored their operations for tax purposes in the wake of the Sept. 11, 2001, terrorist attacks, he sided with the same companies in his role as chairman of the House Ways and Means Committee.
Specifically, Rangel allied himself with House Republicans to exempt companies like Nabors that had re-incorporated offshore prior to 2003 from any changes in federal tax laws. The Times said Rangel initially opposed the loophole but later changed his stance during congressional debate last year.