WASHINGTON – Rep. Charles Rangel, a Democrat of New York, is holding up a nonpolitical legislative process as leverage to help the U.S. Virgin Islands reopen a tax loophole, Senate aides told The New York Sun yesterday.

Senior staff on Capitol Hill familiar with tax legislation said that Mr. Rangel, the ranking member of the House Ways and Means Committee, which has oversight of taxation, has refused to participate in and sign on as a co-sponsor of “technical corrections” bills on the October 2004 American Jobs Creation Act.

Technical corrections bills fix errors in the statutory language of legislation that prevent a bill from fulfilling Congress’s intent in passing it. Committees with oversight of a bill usually pass the corrections in a bipartisan, bicameral way, and congressional staff described the process as mechanical and not typically politicized.

Not so with the Jobs Act, which tightened a tax loophole tied to the Virgin Islands’ Economic Development Commission program, which encourages investment in the USVI with tax breaks. The loophole had been abused by some of America’s top money managers who lived primarily in the mainland United States but declared the USVI as their place of residence for tax purposes, sometimes dodging almost 90% of their federal income tax bills.

The Jobs Act and subsequent action by the Treasury Department codified the residency requirements for the EDC’s tax breaks at 183 days a year. The USVI is currently lobbying Congress to relax the restrictions, requiring that a USVI resident be present in the Islands an average of 122 days a year over three years. Representatives of the Islands have described Mr. Rangel as one of their most “vigorous” congressional advocates.

Senate aides and tax analysts, however, expressed concern yesterday that Mr. Rangel’s advocacy has violated unspoken codes of congressional collegiality and hindered important business on Capitol Hill.

According to congressional staff, Mr. Rangel’s opposition killed one technical corrections bill for the Jobs Act in December 2004, and stalled another one introduced in July until it was finally pushed through over Mr. Rangel’s objections by the Ways and Means Committee chairman, William Thomas, a Republican of California.

At issue, staffers said, was Republicans’ refusal to insert in the corrections bills a provision easing the USVI residency requirements.

“It was very unusual for Congressman Rangel’s staff to take themselves out of” the legislative corrections process, one senior Senate staffer said. “They specifically referred to this problem they had with the Virgin Islands loophole-closer.”

With more technical corrections bills tied to the 2004 Jobs Act forthcoming, Senate staff said, there is concern in Congress that Mr. Rangel’s withdrawal from the process “puts us in an awkward position, because we’d like to have his support, but he’s shattered the whole consensus process.”

As the Sun reported earlier this month, Mr. Rangel has also been the recipient of $38,700 in campaign donations from Virgin Islanders since 1998, according to Federal Election Commission Filings.

“You’ve got to be able to go back and fix those things,” a taxation analyst and partner at the Washington, D.C., office of the law firm Skadden, Arps, Slate, Meagher & Flom LLP, Pamela Olson, said. “The Treasury Department depends on the statutory language being correctly drafted, so they can write the rules that interpret it, and the IRS can administer it. On the taxpayer’s side, they’ve got to plan knowing for sure what the provisions mean. This is very unhelpful,” Ms. Olson, who was an assistant secretary of the Treasury for tax policy during President Bush’s first term, added.

Spokesmen for Mr. Rangel on the Ways and Means Committee yesterday disputed that the congressman was using his position improperly to advance the USVI’s cause, saying Mr. Rangel had chosen not to sign off on the technical corrections bills principally to protest his exclusion by Committee Republicans from the decision-making process that led to the original 2004 Jobs Act.

Still, the Virgin Islands provision, they said, “was certainly a concern,” because the new residency requirements for the EDC program “did real harm” to the Islands’ economy.