Loose Lips

Who is Reuben Charles?

Reuben Charles

Reuben Charles

Two days after Vincent Gray won the Democratic mayoral primary, The Washington Post ran a story about the challenges Almost Mayor Gray now faced. Included in the story was a small blurb mentioning that Reuben O. Charles II, a wealthy Guyana-born venture capitalist who’d been a key fundraiser for Gray, was rumored to be the next mayor’s chief of staff.

If you were listening closely, you might have heard several people familiar with D.C. politics saying, “Who the hell is Reuben Charles?” as they read their morning paper.

It’s a valid question. Charles, who only met Gray in May, is on a pretty fast track in political circles. He’s essentially taken over the day-to-day management of the Gray campaign during the general election (such as it is), and the rumors about him as a top choice for chief of staff seem to have some oomph to ’em.

So, just who the hell is Reuben Charles? Well, interviews with Charles and some of his past associates, along with court records and old news accounts, paint a picture of a driven up-and-comer who has impressed a lot of people with his smarts and people skills—but who left a paper trail in St. Louis, his former hometown, of unpaid debts and some soured business deals.

As in D.C., Charles saw a fast rise to prominence in St. Louis when he moved there in the mid-’90s to attend law school at Washington University. A St. Louis Business Journal profile from January 2001 opened with the line: “It’s hard to believe Reuben Charles has been here only five years” before lauding him for helping to run a minority venture capital firm that “has changed St. Louis’ business landscape.”

The firm was Civic Ventures Investment Fund. The fund was created with high hopes of using the good ol’ free market economy to help boost minority businesses, while also making a profit for investors. The list of initial backers included some of St. Louis’ biggest business names, like Anheuser-Busch and Monsanto.

Charles became managing director shortly after it was formed. But six months after the Business Journal’s glowing profile, the firm was in trouble. The Small Business Administration would begin proceedings to try and recoup nearly $10 million in taxpayer money the firm owed. Officials working for the SBA would have a hard time finding where all that money went; court records show that an SBA official could only recover $1 million from the 13 companies Civic Ventures had invested in. Projects that went bad included a $1 million investment in a skate park, another $1 million investment in a chain of movie theatres in Chicago, and a $500,000 investment in a failed barbecue sauce company.

Officials could not find much of a paper trail for some of Civic Venture’s investments, and some of the companies the fund had invested in had to be written off completely, court records show.

Charles says many of the businesses that Civic Ventures funded went through “devastating situations” and could no longer afford to pay high-priced debt during the economic downturn of 2001. He said funds like Civic fail frequently, because they make high-risk, high-reward investments.

The feds would later try and recoup $340,000 from Charles’s partner at Civic Ventures, Byron Winton, because of an allegedly unauthorized fee Winton paid himself from the fund just before the SBA took it over. Court records show Winton entered into a settlement agreement to pay about half that amount, but didn’t follow through with the terms of the settlement and wound up having some of his wages garnished. (When LL asked Charles about the SBA’s lawsuit against Winton, Charles said it wasn’t true and “strongly suggested” LL do more research. During a subsequent conversation, Charles said he didn’t keep track of what was happening with Winton’s legal troubles.)

Former SBA attorney John Silbermann was partly responsible for trying to recoup the taxpayers’ losses. He traveled to St. Louis to meet with Charles and Winton, and said he came away with a feeling that “something wasn’t right” with Winton—but that Charles “was a straight shooter and a decent guy.”

Silbermann said the stylish Charles had a great rapport with some of the small business owners they met when he took Sibermann on a tour of an impoverished part of St. Louis where Civic Ventures had invested money. “He acted like he was the mayor of this little inner-city piece of St. Louis,” Silbermann recalls.

Civic Ventures wasn’t the only source of financial problems back in Missouri for the would-be next administration’s chief of staff. Charles, who says he moved to D.C. about three years ago because he saw the District as a “market of promise,” still owes thousands of dollars to various entities in St. Louis, court records show.

As recently of March this year, a homeowners’ association won a default judgment against Charles for $11,777.52 for unpaid association fees. A lawyer for the association said Charles hasn’t made any payments since the judgment was entered.

Two years ago, a judge granted Heartland Bank a default judgment for $337,139.74 against Charles, which he said he hasn’t paid.

And a construction supply company won a $3,879.68 default judgment against Charles in 2007. The company representative tells LL they have never received any payment from Charles.

Not to worry, Charles says. “There are some lawsuits that come with business,” he says. “Are some ones that I paid no attention to? Yes. But if there are things that need to be resolved, will they all be? Absolutely. That’s the most honest answer I can give you.”

Charles filed for bankruptcy in March 2007, but the case was dismissed shortly afterwards because he failed to file the required subsequent documents. His bankruptcy attorney, John Caraker, says it is extremely rare for his clients to file for bankruptcy and then fail to follow through. In his initial bankruptcy filing, Charles indicates that he owed money to 19 different entities, including the Internal Revenue Service and the Missouri Department of Revenue.

Charles tells LL the bankruptcy maneuver was done on the advice of another lawyer to “buy time” while sorting out his investments. He says the legal troubles highlighted in court records represent only a small portion of his time in St. Louis that was overall “amazingly wonderful” and profitable. Like most businessmen who invested heavily in real estate in recent years, he’s taken his “fair share of lumps.”

“The bottom line is, you can spend a lot of legal fees fighting your position, or you can just resolve them in time, and I will. And they will be absolutely resolved,” Charles says.

Another creditor listed in bankruptcy filings was Rick Taylor, a classmate of Charles’ at Barber-Scotia College, in Charlotte, N.C. Taylor says he lost a “substantial” amount of money going in with Charles on a residential investment, but that he’s also made money with Charles, and the loss didn’t diminish Taylor’s high opinion of his former classmate. Taylor remembers Charles as a standout student government leader in college who has always been a “very bright guy.”

“I remember in undergrad we knew that he was destined for some very big things,” says Taylor.

Taylor’s comments may be prophetic. Gray’s campaign manager during the primary against Adrian Fenty, Adam Rubinson, says Charles has a bright future.

Rubinson says he met Charles through a mutual friend and quickly saw his potential to help out the campaign. After Charles helped organize a fundraiser for Gray in May, he quickly became an indispensable member of the next mayor’s brain trust, Rubinson says.

Charles is a “polished” fundraiser, who had a knack for spotting previously untapped immigrant groups as potential donors, Rubinson says, adding that Charles “understands numbers very well” and was great at organizing the campaign’s finances.

For his part, Charles calls Gray’s can-do attitude “so inspiring” and told the Post that he’d take seriously any offer to be a part of a Gray administration. Charles says his experience living in Guyana, Brooklyn, North Carolina, and St. Louis has given him a balanced perspective that’s helped him succeed in the Gray campaign.

Plus, he says, “I work hard, I don’t rest much.”

The Gray campaign paid Charles $6,000 on Aug. 11, campaign finance records show. As for the vaguely shady paper trail Charles left behind in St. Louis, Rubinson says he never vetted Charles beyond a cursory Google search. He says Charles has recently told him about some of his past financial problems; Rubinson is satisfied the problems won’t keep Charles from serving as Gray’s new de facto campaign manager during the general election.

“I don’t have any concerns about them at all,” Rubinson said.

AN ORANGE OF A DIFFERENT COLOR

A few weeks ago, LL speculated on just how crazy the special election to replace Kwame Brown’s At-Large council seat might get because so many people are interested in running.

While reporting that column, LL asked Vincent Orange, whom Brown just defeated to become the next D.C. Council chairman, whether he was interested. Orange, who was a Ward 5 councilmember before leaving to be a lobbyist for Pepco, made it pretty clear that he had no desire to going back to being just a regular old councilmember.

“If I want to be on the council, I would have stayed on the council as a Ward 5 councilmember,” Orange said at the time.

Well, what a difference a nearly-17-point loss makes. Proclaiming it a “new day,” Orange says he’s now very much interested in replacing Brown and has been actively courting the 82 members of the State Democratic Committee that will initially pick a replacement before a special election is held.

Orange pointed to the nearly 48,000 votes he received in the primary as proof that he’s the best pick the committee can make.

Orange says he’s also been making the rounds at the Wilson Building to make sure there are no hard feelings lingering from the campaign. While there, Orange bumped into Brown, and the two now have plans for a meeting at a future date. (LL has not heard of a similar rapprochement between Councilmember Phil Mendelson and his opponent Michael D. Brown.)

By the way, in LL’s previous column on the special election, he neglected to mention that the D.C. Republican Party has its eyes set on the prize. GOP officials think they have a good shot of scoring an upset in a race that historically draws few voters. (Now-Independent Councilmember David Catania, running as a Republican, was first elected in a similar special election 13 years ago.)

D.C. Republican Party Executive Director Paul Craney says the city’s budget problems will be front and center in voters’ minds when they head out for the spring special election, and that bodes well for Republican candidates preaching fiscal restraint. LL has to assume Patrick Mara, who defeated Carol Schwartz in the 2008 Republican primary before losing to Kwame Brown and Councilmember Michael A. Brown in the general election, is very interested in running. Mara, meanwhile, says he’s focused only on winning his school board race.

LL-A CULPA

A few weeks ago LL had fun at Councilmember Harry Thomas Jr.’s expense by noting that Thomas had helped organize a counter rally to the Glenn Beck thingy. LL noted that Thomas was shooed from the stage by one of the Rev. Al Sharpton’s handlers, and only got to address the crowd by asking them to move out of the television cameras’ way after rallygoers had marched to the site of the future Martin Luther King Jr. memorial on the Mall. What LL left out is that Thomas had been scheduled to speak at the main event at Dunbar Senior High School, but graciously gave up his speaking spot to D.C. voting rights advocate Anise Jenkins. LL regrets the omission.

Got a tip for LL? Send suggestions to lips@washingtoncitypaper.com.

Photo by Darrow Montgomery

  • http://distcurm.blogspot.com/ IMGoph

    gwen: when the hell did i say i wanted vince gray for mayor?

    and you're right. i couldn't possibly have a valid opinion because i haven't been here since the dawn of time. you win. you are right—for now and forever.

    i submit, i capitulate, i give up.

    yay you!

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  • Entrepreneur

    Adrian Bent-Me,

    Charles was not given the money at question. A venture capitalist firm where he served as one of the junior professionals, was given approximately $10 million to invest in urban ventures which ultimately failed as they too frequently do.

    Regarding my anonymity, it should not detract from my message, as you stated, any more so than your own anonymity detracts from your credibility. I did seriously consider signing my name to the earlier comments, however I felt it might be inappropriate to vary my approach materially from the norms well established by this mode of debate.

    But I will admit that I am tempted by your suggestion that full disclosure of my identity might add to the strength of my previous statements.

    At the same time I am sure that the earnest reader can distinguish between self titled "bashers" with very limited knowledge of a situation and other posters that are willing to provide hopefully useful information and insights.

    I suggest you try not being a hater for one day and if it works another and so on. You do not need to be concerned about losing face, since we do not know who you are. Trust me, life is better as a lover.

    Best regards,

  • Adrian Bent-Me

    Entrepreneur- I never said I hate Charles. I don't even know the man. What I would prefer is for more transparency with my elected officials (one of the key reasons I so intensely disliked Fenty). Hiring a guy with a muggy track record might not make a lot of sense. I've said before, if a background check comes out peaches, fine by me. If I was Charles and had nothing to hide, I would insist on one. What seems to be the problem with that?

    Also, you should contact the CP directly and have them correct that $10 million statement. From what I read, it seemed that Charles was instrumental in getting the $10 million for his company and not a "minor" player as you put it. I'm sure you can remain anonymous when clarifying this too.

    Also, what a load of crock about you choosing to remain anonymous. I'm sure even if you weren't, none of us would know who you are, so that wouldn't matter. But I am awfully intrigued at the amount of St. Louis law students flooding our City now. Seems a bit odd that this forum has had 4 of them alone, all of whom offer stellar recommendations for our man Charles here. I think the ratio of Charles supporters who are all St. Louis law students with deep ties to the economic happenigns of that City is 1 to 5. Simply astonishing my dear anonymous friend.

  • Truth Hurts

    @ ABM: You're keeping your eye on the ball, asking appropriate questions, and rightfully questioning the anonymous St. Louis "lawyers" vouching for Charles.

    For all we know, this poster could be Polk, another St. Louis lawyer buddy of Charles. In Polk's case, it's more accurate to call him a "disbarred, ex-lawyer", and a convicted felon (wire fraud involving city funds).

    I assume you know Mr. Gray and/or have credibility with his folks. Keep speaking up.

  • Truth Hurts

    @ Entrepreneur: In what jurisdiction is Charles barred?

  • Truth Hurts

    Crickets.

  • jon

    VINCE GRAY'S CAMPAIGN DIRECTOR AND FUTURE CHIEF OF STAFF'S SHADY CROOKED PAST!

    Reuben Charles

    Dear Charlestonians:

    Shortly after the September 14 primary, Reuben O. Charles II was named the Director of Operations of the Gray for Mayor campaign, replacing Adam Rubinson, who had served as the campaign’s manager for the primary race. Charles, a Guyanese native, has lived in Washington since 2007. He met Chairman Gray in the spring of this year, and he impressed Gray and his campaign officials with his fundraising skills. In recent weeks, Charles has told reporters that he will be the Chief of Staff to the mayor in a Gray administration. Charles’ meteoric ascendance and sudden prominence has shocked many Gray supporters and raised concerns among campaign workers, who have had questions about Charles’ professional background, campaign experience, and knowledge of the District. These concerns were heightened when Alan Suderman wrote two articles about Charles on the City Paper web site, in the first of which Adam Rubinson indicated that “he never vetted Charles beyond a cursory Google search.” When Dorothy asked questions about Charles to two members of Gray’s finance committee, they issued a formal challenge to her to look into Charles’ background for herself.

    One of the first things that she learned was that Charles is not a registered voter in the District of Columbia, although he claims that he has resided in DC since 2007. He is also not a member of the DC Bar or the Missouri Bar, although he graduated from Washington University Law School in St. Louis. An explanation for Charles’ not registering to vote is that he is not a United States citizen. Although he moved to the United States when he was fifteen years old and is now forty-one, although he became a permanent US resident in 2000, he has not become a naturalized citizen. Traci Hughes, Gray’s campaign press secretary, relayed to Dorothy Charles’ statement that he was a naturalized citizen, but then Hughes read Charles’ resume, which said that he is “awaiting appointment for citizenship interview.”

    Prior to joining the Gray campaign, Charles worked as a contractor who performed work for several District agencies, including the Department of Consumer and Regulatory Affairs and the DC Public Library, and also for WMATA. At the same time, however, he was the president of ISA White Collar Prison Consultants, a firm in Washington that describes itself as a “boutique practice group of premier prison, sentencing and business consultants.” It specializes in advising white collar criminals about imprisonment and in managing their business and personal affairs while they are imprisoned, and it claims to have special expertise because some of its principals “have served time in prison for white-collar offenses.” It is unclear whether ISA Consultants is still operating; its main web site is no longer live and two other web sites run by it are only two pages each, with no staff or officer names, no E-mail address or street address for its office, and an 800 telephone number that only rings to a fax machine. Some of Charles’ initial partners in ISA were also his business associates in St. Louis, where he was the managing partner of Civic Ventures Investment Fund, which was funded by the Small Business Administration and large companies based in St. Louis (including Anheuser-Busch, Ameren, Edward Jones, and Monsanto) before several of its loans collapsed, Civic Ventures was itself placed in receivership, and investors in Civic Ventures lost millions of dollars. Between the closing of Civic Ventures and Charles’ moving to DC, Charles was subject to several lawsuits regarding other business ventures, leaving him owing tens and perhaps hundreds of thousands of dollars.

    This week, Chairman Gray announced that he was not going to accept District government funds to support the transition to his becoming mayor. Instead, he will form a 501(c)(4) organization and raise private funds to support the transition. There is no reporting requirement for this funding, and no limit to how large a contribution can be, although Gray has said that he will voluntarily report contributions and place a limit on them. The person who has been named to do the fundraising for the transition is Reuben Charles.

    What does this issue say about Gray and his campaign? It raises concerns that go beyond Charles. Neither Gray nor his campaign vetted Charles’ background adequately. It seems evident that Charles was not forthcoming about his problems, and that even after many troubling matters were raised about him, the Gray campaign continued to support him and to dismiss the legitimate questions that people were asking. We can only hope that Gray and his advisers and staff will do a better job of vetting potential appointees to government positions.

  • Love

    my dear brothers and sisters, RE: Reuben Charles

    Oh the pain of having babel and self hate paraded as informed opinion. Makes a brother wanna holla.

    Now lets examine what Mr. Charles has done. He graduated from college. He is supporting his family. He works hard. He is competent, gifted and articulate. He Owes money. The SBA attorney says he is a “straight shooter and decent guy”. He thought enough of our beautiful, culturally diverse city to move his family here and put his children in the public school system. He played a crucial role in the Vincent Gray campaign. Oh yeah, we do not want to leave out the fact that he is black, I mean like really BLACK. Its not like he led America into Iraq, oops that was Bush, his buds and no doubt some of you busting on Mr. Charles. Or maybe he pillaged our Treasury and banking system, nooooooo, thats our titans of finance. Give a Brother a freaking break!!!!! I am sure we can all find room for redemption in our hearts. Love

  • native_resident

    Ah shucks, give a brother break, huh? Brother, please.

    Wrong, is wrong. No matter how you count it. I do not think that this has to do with self hate.

    Mr. Rueben Charles is simply paying us all back for the trans-Atlantic slave trade.

  • JB

    Very interesting article especially in the light of time. I can only imagine Adam Rubinson, being the chief apologist for the now infamous Gray campaign, can only be knee deep in all this. Why else would he so cleverly introduce Reuben Charles into the already victorious campaign. It's kind of like Nixon going into Watergate when he already knew he'd win.

    The MOST PLAUSIBLE REASON IS THAT RUBINSON NEEDED A RED HERRING A guy like Charles, with his shady background, must have been to good to be true when one know perhaps a million dollars is unaccountable. Why else would Robinson want to share the limelight OR the spoils?

  • WTFDC

    I agree with JB that Adam Rubinson is outstanding at the intersection of these (the ones we know about) players and shadow deals that went South. Time has told. He was the top paid staff giving him the highest responsibility. He introduced Mr. Reubin Charles to Mayor Gray. Mayor Gray would likely assume Mr. Rubinson vetted him first. That's what campaign managers do. Or, they get somebody else to pick up the bag o'money. Either way, they don't let their charges hanging the way Adam Rubinson did to Vincent Gray.

    In other interviews Mr. Rubinson said he'd be "shocked" if Mayor Gray got indicted. Of course he has to say that. He can't say as a lawyer and past employee of a a big three auditing firm "I saw that coming" eg: I saw the train of people leaving my office to walk across the street and launder money at the 7-11. After all, it was approaching a million dollars in small amounts. That 7-11 must have been really busy with fellow campaign staffers.

    Frankly, I want to think that Mr. Gray knows of all these improprieties of his appointees and staff (He did the same with Suzanne Peck), however, he might be assuming that his campaign manager would be backgrounding such people first. Maybe, just maybe, as I read it the common character (or, perhaps, lack of character) in the seeming self-destruction of Mayor Gray is Adam Rubinson. Maybe it's not self-destruction. Perhaps he is being targeted by others not yet revealed. Nonetheless, it is hard to imagine to what end. And, it looks like Mr. Machen is content with letting Mr. Gray get reelected to that prior talk about him wanting to run appears to be hogwash too. Plenty to go around I suppose.

    I only say this in the public interest as this needs to come to light before the election as a "do-over" will be very costly to the beleagered taxpayer and costly to the city's beleagered reputation.

  • LM

    As a beleagered DC and federal taxpayer, how long do we have to wait for indictments? Of course I know the Districk is a colony of the US Government. Hence one should expect a tepid response. Nonetheless, Mayor Gray and his lacky Adam Rubinson, probably the architect of the whole deal, need to be served and serve time for any future corrupt pols (I know that's redundant) to take such investigations seriously. Come on Mr Prosecuter--time to get busy--before people think you are on the take too!

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