This morning the New York Daily News reported that US Rep. Charles Rangel has been lobbying the IRS for more tax free bonds for the construction of the new Yankee Stadium and has since received increased donations from a Yankee affiliated law firm. It's not the sexiest of stories but it provides a peek behind the curtain at the often infuriating public subsidization of new stadiums.
The city and the Yankees secretly crafted a letter Rep. Charles Rangel used to lobby the IRS for tax changes that would save the team $66 million, the Daily News has learned.
They did this at the same time Yankees owner George Steinbrenner and the team's law firm, Akin Gump Strauss Hauer & Feld, raised almost $25,000 for Rangel, records show.
The law firm's political action committee also donated an additional $30,000 to the Democratic Congressional Campaign Committee in this election cycle. Rangel is chairman of the DCCC's board of directors and a key fund-raiser for House Democrats. Yankees President Randy Levine is senior counsel at Akin Gump.
The Rangel letter was just one weapon in the Yankees' ongoing battle to get more tax-exempt financing for the new stadium rising in the Bronx. Last year, the team got $942 million in tax-free bonds through a city agency, but the team wants $350 million more.
The Daily News piece is pretty in depth, but the blog friendly gist is as follows. In the mid 80's the IRS put a cap on the amount of tax free bonds that could be obtained for the construction of a new sports stadium. The Yankees had already successfully lobbied the IRS once to relax these restrictions and saved themselves $181 million in tax costs. Stadium costs have gone over, and now they're looking for an additional $350 in tax free bonds, which would save them $66 million more.
The letters from Rangel to the IRS were drafted by someone in the mayor's office and then forwarded to the Yankees for review. The Yankees then sent them along to the office of the Democratic rep where they were presumably rubber stamped them and sent along. Since 2000, the total amount of money raised by both Yankee officials and Akin Gump sits around $45,000.
The IRS rejected the Rangel letter, requesting a direct letter from the city instead. So the return on the Yankee investment in Rangel seems to be about as effective as their investment in Carl Pavano.
(I tip my fedora with the piece of paper that says "press" in it to BBTF.)