Do you have a plan to vote?
Let us tell you the information you need to register and cast a ballot in D.C.
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.
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.
Photo by Darrow Montgomery