White House Chief of Staff Rahm Emanuel is under fire for allegedly taking what amounts to personal loans that he didn’t repay. Yet his predicament shouldn’t scare customers of personal unsecured loans like yourself. His came in the way of alleged favors he received, which is particularly odd when you consider that Emanuel used to sit on the board of Freddie Mac. More on that in a moment.
Dick Morris and Eileen McGann of the New York Post report that “lived rent-free for years in the home of Rep. Rosa De Lauro (D-Conn.) - and failed to disclose the gift, as congressional ethics rules mandate.” It is common knowledge that Emanuel is a multimillionaire, which makes it all the more strange that he would need free room and board for any period of time.
Wait, here it is
Rep. De Lauro’s husband is Democratic pollster Stan Greenberg. While Emanuel was on the Freddie Mac board, he was also the chairman of the Democratic Congressional Campaign Committee. That organization, according to Morris and McGann, gave Greenberg large polling contracts - to the tune of $239,996 in 2006 and $317,775 in 2008.
Emanuel never declared free rent on his taxes. he claimed it was a five-year show of “hospitality.” Since this gift easily added up to more than $100,000 over that time, some experts even consider Rahm’s rent to be taxable income. Thus the “personal loans” are like cash he earned.
And there’s more
While Emanuel was on the board of Freddie Mac, the government-backed lender lied about its earnings. This played no small rule in the current financial catastrophe. Morris and McGann point out that The Federal Housing Enterprise Oversight Agency “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.’” The U.S. Securities and Exchange Commission fined Freddie Mac $50 million for this very same fraud in 2000, 2001 and 2002. Rahm Emanuel was there.
And more…
When Emanuel left Freddie Mac to run for Congress in 2002, the not-so-big-Mac’s political action committee contributed $25,000 to his campaign. Now, in a twist of irony, Rahm Emanuel is President Obama’s right hand man. They’re trying to dig America out of the mess Freddie Mac helped cause.
But let’s back up for a moment. Should Emanuel have declared his housing as taxable income? According to Steve Willis of the Post:
Mr. Emanuel would have the burden of proving it is not. The controlling authority is Commissioner v. Duberstein, 363 U.S. 278 (1960). The Supreme Court found very similar facts - but involving much less money - to be taxable rather than a gift. Mr. Duberstein received the “gift” of a Cadillac from a business associate, who was also a friend.
Honest Americans who have suffered through IRS audits hope that one is on the way for Mr. Emanuel. They know about personal loans. They’ve used personal loans. You, Mr. Emanuel, don’t need personal loans.