Rachel Maddow | March 30, 2010
>> name.
>>> we begin with a developing story concerning c street . for many years members of congress , democrats and republicans have lived at a lavic 6,000- square foot , 12 bedroom, nine bathroom townhouse near the capitol. it is a building called c street . it is run by a secretive religious group called the family. the family has recently denied having anything to do with this residence. the property deed is signed by an employee of the family and the tax forms show c street to be an affiliated organization. the family's attempts to distance themselves from c street have not worked and have been clumsy. lots of people have been trying to distance themselves from c street since a string of alleged and admitted c street related extramarital affairs have come to light. lqrk sanford received counseling while he was having an affair. john enstrom negotiating a cash payout to his mistres and chip pickering 's wife says c street is where chip pickering carried out his extramarital affair while that affair was secret as well. c street got very famous because of the sex scandals for all the wrong reasons. it is particularly awkward was the fact that c street for tax purposes listed as a church. earlier this month as we reported a group of ohio pastors asked the irs to strip c street of its federal tax exempt status . it does claim to be a church there is not a whole lot that is churchy about it. now this same group of pastors has brought to light new information about c street and the members of congress who live there or have lived there. this new information raises the prospect of serious violations of congressional ethics rules and members of congress have violated tax laws to the tune of tens of thousands of dollars potentially. the group of pastors know what they are talking about. the letter they sent to the commissioner of the irs was drafted by their attorney, the former director of the exempt organizations at the irs . members of congress who lived at c street , this 12 bedroom, nine bathroom maid serviced townhouse, a stone's throw away from the capitol building , these members of congress were reportedly playing $950 a month in rent. that was reported last year. in 2002 it had been reported they were paying $600. last year it is reported to be $950. if you compare that rent to what it would cost to live anywhere else in that area with the same sort of amenities it looks like these congressmen were getting a huge discount. a furnished townhouse on capitol hill with house keeping services and meal services available. $950 a month at c street to $4,000 at the marriott execu stay which offers roughly the same type of services. compare $950 that these members of congress paying at c street to $4,500 at the capitol hill suites nearby. compare $6,000 at the capitol hill lee liason hotel. if you want to rent a one bedroom apartment in that same area, try $1,700 a month. when you look at these figures, surprise, surprise, members of congress gets a sweetheart deal . an obviously subsidized deal on their living arrangements. here is the rub. if you or me or a member of congress was paying that kind of way below market rate for their housing you have to tell the irs that. they call it income. if you were paying $1,000 to live somewhere and the fair market value of that place was $2,000 a month you have to report that $1,000 difference as taxable income when you filed your taxes. if these members of congress were paying $
950 instead of a conservative estimate of what that housing was worth probably four grand, that means these members of congress was getting a rent subsidy of about $3,000 a month. $3,000 a month over a year, that means they would have had $36,000 of extra income to tell the irs about and to pay taxes on. did they? members of congress don't have to release their tax returns this group of pastors would like the irs to find out. if c street is indeed charging a below market rate, in effect subsidizing the rent for the members of congress who live there and the residents are not including the value in taxable income the members may have significant unreported income tax liabilities. if it were you or i, if i was in this situation, anybody who is not a member of congress , we might have a tax problem on our hands with this. and, you know, that is what al ka pone went to prison for. because these are members of congress they have something else to worry about. they may have a congressional ethics problem on their hands. members of congress have to declare any gift to them valued over ?$50. if this subsidized rent was a gift or donation, they are required to declare it as such. every year members of congress fill out financial disclosure reports. according to a review done by this pastor's group none of the current members of congress who have lived at c street ever declared they received any sort of gift in the form of a rent subsidy let alone say $36,000 a year in a gift in a form of a rent subsidy. today we contacted every current member of congress who lives at c street or reportedly lived there, senator jim demint , john ensign , coburn , brownback, congressman zach wamp , bart stupak , mike doyle and jerry moran . we asked if they reported the subsidized rent they allegedly received to the irs , whether they would make their tax return public and whether any of this was declared as gifts on their financial disclosure reports. two of these members of congress have gotten back, congressman mike doyle and senator tom coburn . i want to sincerely thank both of them. here is what mr. doyle told us "while i no longer live at c street i never received any subsidized rent there. my living arrangements have always complied with house rules and regulations. when we asked how much he paid in represent while he lived at c street mr. doyle 's office declined to comment. a spokesman for senator coburn got back to us tonight tells ugh "he hasn't received subsidized rent. he pays more than $10,000 a year for a room and bathroom only. just to be clear if you do the $10,000 a year in rent breaks down to $800 a month, less than the $950 reported. we contacted the irs to find out if they intend to look into the allegations. they were not able to comment. this is a developing story. really, really developing. joining us now is the reverend eric williams . reverend eric williams is senior pastor at north congregational church of christ in columbus, ohio . he and 12 other pastors have filed this complaint. pastor williams, thanks for joining us again.>> glad to.
>> the irs was tightlipped ? when we spoke to them about these allegations. has your group heard back from them?
>> we did hear back after the initial complaint saying they received our concerns and would look into it if it merited. this second letter is a supplement to our original complaint.
>> these allegations of potential tax violations, ethics violations are serious. none of these current or former residents besides mr. doyle and mr. coburn have come forward. have any come to you to clear their names do you expect they can or will?
>> i have had no contact from any of them. i would be pleasantly surprised if they did reach out to us.
>> your complaint makes a detailed case, appears to be a solid case these members of congress were paying well below market value rate.
>> that is right.
>> is the tax exempt status of c street as a purported church may have been the way they were evading taxes here?
>> i think that goes to the heart of it. this boarding house is purportedly a church there is no opportunity to look at their finances. there is no obligation to do any reporting, therefore, quite frankly i don't know if the members of congress even paid any rent at all. the subsidy, was it a gift that was given? imputed income ? we can ask the questions and ask the irs to compel c street and the members of congress to comply. we would like to know. we would like to know.
>> when congressman doyle and senator coburn said they didn't receive subsidized rent, neither one of them willing to elaborate on that claim, it may be that members of congress were in the dark and thought that rent was super cheap in washington and they didn't know they were getting a subsidy. does that seem possible?
>> well, that is a far stretch. as far as i know c street is the only boarding house steps away from work that offers this kind of luxurious ?housing. this was a special relationship with this boarding house .
>> to that point, whether these members of congress were accurate with the irs and disclosure forms with congress, if you think they were aware of getting this sweetheart deal , it is conceivable they did, i don't think they are dummies, are you concerned about access, influence, other forms of quid pro quo who whoever was subsidizing them and what they may have been expecting in return?
>> i can't believe they were getting subsidized housing because they had a financial need. they make quite a bit of money, $174,000. i have to think that they were receiving a favor with some kind of expectation. of course, the whole family code of secrecy really suggests that there was a lot of conversation, private conversation, private influence going on well below the radar. and have to think all these members enjoying the favors at staying at c street center were involved in that kind of communication.
>> reverend eric williams , senior pastor in columbus, ohio , thank you for your continued vigilance and thank you for your time.
>> we'll stay on it. you bet.
>>> so long after pretty much