Gray Transition Director Reuben Charles Owes Illinois $236,000 in Taxes
Reuben Charles, the director of Almost Mayor Vince Gray's transition team, owes $236,620.74 in unpaid sales and use taxes in Illinois.
The tax lien issued by the Illinois Department of Revenue obtained today by LL is pretty sparse on details, though it says the lien was filed on April 1, 2008. A clerk at the Sangamon County Recorder's office told LL that there's no record of Charles having paid that debt.
LL has already documented that Charles has several other unpaid debts in St. Louis, where he ran a venture capital fund. Charles has characterized those debts as part of the regular knocks that come with being a businessman who invested heavily in real estate. (Charles had also told LL he used to do business in Chicago.) Court records in Missouri also show that he went to court three times over tax issues, though all of those cases have been settled.
The voicemail box on Charles' cell phone was full. So LL has a call into Gray's camp seeking a comment from Charles on the Illinois debt; LL will update as needed.
Charles was the subject of a little bit of awkwardness at Gray's press conference today at the Frank D. Reeves Municipal Center, courtesy of NBC 4's Tom Sherwood and D.C. Watch's Dorothy Brizill.
Sherwood wanted to know why Gray, who was introducing his "Transition Leadership Team" hadn't brought up Reuben Charles, who will be running the transition team, to stand with the rest of the group. And Brizill grilled Gray pretty hard about whether Charles would have a dual role of raising funds while managing the transition.
In the past, Gray has been effusive in his praise for Charles, who is rumored to be Gray's next chief of staff. During his victory speech last night, Gray even gave Charles an extended shout-out for his prodigious fundraising abilities.
At today's press conference, Sherwood asked why Charles was standing in the back of the room, instead of in front of the press with Gray and the rest of the transition team, given that he'll be running the day-to-day operations of the transition.
"I've yet to see [Charles] in person or hear him speak... Can he come up front so we can all have picture of you sir, with his team?" Sherwood asked. "No shadows in this administration," he added jokingly.
At that point Charles came up and stood next to Gray, until Gray kind of shooed him back to stand with the rest of the transition team.
When Sherwood tried later to get Charles to answer a question, Gray said: "No, no, you'll just hear from me today."
Update: Gray transition spokeswoman Doxie McCoy tells LL that the debt is tied to a company, on whose board Charles sat, that operated movie theaters in Chicago. She said the lien is "related to a board membership, which by Illinois law ties all board members to ... tax liens."
"Reuben Charles is working on getting it resolved," McCoy said.
According to 2004 article in the St. Louis Post-Dispatch, Charles was the vice-chairman of a company called Meridian Entertainment. Charles became a board member after the venture capital fund named Civic Ventures he was running with a man named Byron Winton, invested in the company. LL found the article in an archive search and can't find it online. Here's the relevant text:
Civic Ventures initially said it would invest in businesses in the St. Louis area, but by the end of 1998 had abandoned that principle.
Near the end of 1998, Civic Ventures invested $1 million in Meridian Entertainment Co., which was seeking to acquire and operate seven movie theaters in Chicago, the SBA report said. The investment gave Civic Ventures a 34 percent share of Meridian, the SBA said.
Meridian's president was Donzell Starks. Winton became the chairman of the board of directors and Charles became its vice chairman.
Alisa Starks, who said she attended Northwestern University with Winton, said that he and Charles were not in "operating" positions. Neither of them was paid by Meridian, she said.
A few months later, on April 1, 1999, Civic Ventures invested again in movie theaters, lending $500,000 to AJS Entertainment Inc., according to the SBA report. AJS, a company set up by Alisa Starks and her husband, then paid $500,000 to buy a 33 percent stake in Meridian, the SBA said.
The [Small Business Administration] report described Meridian as the "owners of seven movie theaters in Chicago." But Alisa Starks said in an interview that Meridian never owned the theaters. Instead, it leased them from other companies, which wound up hurting the company financially, she said.
The movie industry hit a slump in 2000, causing attendance to fall, Starks said. But Meridian was left with the fixed expense of leases and collapsed in debt by the end of 2000, she said.
There is no record of Civic Ventures filing suit this time either. The fund wrote off the entire $1.5 million investment as worthless before it was placed in liquidation.
Photo by Darrow Montgomery