(UPDATE: See my follow-up post on GE’s poor PR response to the Times’s story)

The New York Times unloads a fantastic piece of reporting on General Electric and taxes this morning. It’s an ugly portrait of GE and the political system it’s helped create.

David Kocieniewski zeroes in on GE’s tax avoidance, which is a proud corporate strategy at Obama appointee Jeff Immelt’s company, which earned $14.2 billion globally last year but paid no taxes in the U.S. It actually had a negative U.S. tax rate last year, since it got a $3.2 billion American tax benefit. Over the last five years, GE made $26 billion in what it says were American profits, but got the IRS to pay it $4.1 billion total (UPDATE: I should clarify that this is an accounting benefit, not an actual cash payment). Astonishing.

How does that happen?

The Times is excellent on that, using reporting on Representative Charlie Rangel, the, um, ethics-challenged Democrat from New York to give us a look at how the sausage is made. Here’s Kocieniewski’s telling of what happened when Rangel and the Dems threatened to yank one of GE’s richest tax breaks:

The head of its tax team, Mr. Samuels, met with Representative Charles B. Rangel, then chairman of the Ways and Means Committee, which would decide the fate of the tax break. As he sat with the committee’s staff members outside Mr. Rangel’s office, Mr. Samuels dropped to his knee and pretended to beg for the provision to be extended — a flourish made in jest, he said through a spokeswoman.

That day, Mr. Rangel reversed his opposition to the tax break, according to other Democrats on the committee.

The following month, Mr. Rangel and Mr. Immelt stood together at St. Nicholas Park in Harlem as G.E. announced that its foundation had awarded $30 million to New York City schools, including $11 million to benefit various schools in Mr. Rangel’s district. Joel I. Klein, then the schools chancellor, and Mayor Michael R. Bloomberg, who presided, said it was the largest gift ever to the city’s schools.

That would be very interesting if that were all there was, but here’s where it becomes a thing of beauty:

G.E. officials say that neither Mr. Samuels nor any lobbyists working on behalf of the company discussed the possibility of a charitable donation with Mr. Rangel. The only contact was made in late 2007, a company spokesman said, when Mr. Immelt called to inform Mr. Rangel that the foundation was giving money to schools in his district.

But in 2008, when Mr. Rangel was criticized for using Congressional stationery to solicit donations for a City College of New York school being built in his honor, Mr. Rangel said he had appealed to G.E. executives to make the $30 million donation to New York City schools…

In an interview this month, Mr. Rangel offered a different version of events — saying he didn’t remember ever discussing it with Mr. Immelt and was unaware of the foundation’s donation until the mayor’s office called him in June, before the announcement and after Mr. Rangel had dropped his opposition to the tax break.

Asked to explain the discrepancies between his accounts, Mr. Rangel replied, “I have no idea.”

It’s worth noting that Kocieniewski has made something of a living the last few years on the Charlie Rangel corruption beat, with a number of bigtime exposés that cost the congressman his chairmanship of the powerful Ways and Means committee and got him censured by the House. Add another one to that growing list.

So Rangel’s claims here, then, wouldn’t be very credible even if the Times hadn’t caught him saying the direct opposite thing three years ago.

Indeed, a look back at one of Kocieniewski’s big scoops from 2008, shows Rangel doing something similar on the CCNY solicitation:

Representative Charles B. Rangel has helped raise $11 million for a City College of New York school of public service to be named in his honor. In recent months, as questions have emerged about his fund-raising, he has insisted that he has kept his efforts to attract donors scrupulously separate from his official duties in Congress.

But Congressional records and interviews show that Mr. Rangel was instrumental in preserving a lucrative tax loophole that benefited an oil-drilling company last year, while at the same time its chief executive was pledging $1 million to the project, the Charles B. Rangel School of Public Service at C.C.N.Y.

Let’s rewrite that graph for today’s story:

But Congressional records and interviews show that Mr. Rangel was instrumental in preserving a lucrative tax loophole that benefited General Electric last year, while at the same time its chief executive was pledging $11 million to schools in Rangel’s congressional district.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.