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Campaign operative's past looms large in his future with next D.C. mayor

By Nikita Stewart and Mike DeBonis
Washington Post Staff Writers
Saturday, November 20, 2010; 7:53 PM

His ability to gather people and raise money for a nascent campaign got Reuben O. Charles II noticed - and promoted. Even his impeccably dressed frame exuded a booming confidence.

He was a top choice to be D.C. Mayor-elect Vincent C. Gray's chief of staff, in position to wield considerable influence in the new administration.

A few weeks and some missteps later, Charles, 41, continues to manage Gray's transition, but he is out of the running for the top job.

Charles's breakneck rise through the ranks of the Gray mayoral campaign was so fast it rendered the staff unable to control the public scrutiny of Charles's past. A decade ago, he was an ambitious venture capitalist in St. Louis, where a major deal to help minority businesses collapsed. The fallout - a series of lawsuits and liens - has haunted Charles. Just last week, he obtained a signed affidavit to clear him of a $236,000 debt to the state of Illinois.

The rocky financial history led some to pressure Gray (D) to distance himself from a man pivotal to his defeat of Mayor Adrian M. Fenty (D). It didn't help that in Charles's first week as head of the transition, Gray's election-night victory party was held at a nightclub owned by a man who owes the city more than $600,000 in back taxes. Gray also did not attend the funeral of the first police officer to die in the line of duty in two years. The blunders have caused some in the campaign to doubt whether Charles is ready for prime time.

"We made some mistakes, and I own up to them," said Charles, a married father of two elementary school-age boys who moved to the District three years ago.

But Charles's supporters fear Gray folded too easily to pressure from critics who say Charles lacked the experience and maturity to be chief of staff. Charles, they said, deserves credit for fundraising and for gaining the trust of education reform stakeholders worried that a Gray mayoralty would slow progress in schools.

In an interview, Gray downplayed the controversy surrounding Charles's apparent fall from grace. That Charles would be his chief of staff, Gray insisted, was a rumor that spun out of control. He credited Charles with doing "an excellent job during the campaign" but said he is unsure whether Charles would hold an administration post.

'Out of nowhere'

In an interview, Charles said he joined Gray's campaign in the spring as a volunteer because he was inspired by the council chairman's approach to government over that of Fenty. Gray, he added, "injected warmth and community sensitivity."

An IT consultant to District government and the Washington Metropolitan Area Transit Authority, Charles jumped at the chance to help campaign manager Adam Rubinson and Suzanne Peck, assistant manager and chief information officer at WMATA, who also volunteered to help with fundraising.

"When he came, he came out of nowhere," Neil Richardson, a Gray campaign strategist, said of Charles. "We saw pretty quickly that he was good at gathering people up."

Fenty's aggressive fundraising team, led by campaign manager John Falcicchio, had locked down hundreds of $2,000 maximum donations from developers and business interests reluctant to give to Gray.

That didn't discourage Charles: At an event in May at Oya restaurant, he helped Peck squeeze $35,000 from contributors. Charles's fundraising prowess became pivotal to the campaign, leading efforts that eventually netted $2.4 million.

For some of the contributions, Charles delved into constituencies sometimes ignored by many District politicians, such as its Indian and Ethiopian residents, whom he called "a group of unusual suspects." He explained why they should care about the District and how their children's lives and their businesses are affected by local government.

"That was kind of novel," said Ron Lester, a political consultant and pollster. "He took to [fundraising] like a fish to water. Reuben was a fundraiser tour de force. He's fearless. He'll go and ask anybody for money."

Gray was solidly ahead in the polls in July, but his campaign team still worried. Fenty was about to launch a blitz of television ads against Gray, who had less than $100,000 on hand.

Gray needed tens of thousands more for radio, direct mail and TV ads.

"I'll raise the money," Charles said at a gathering of anxious staffers, according to some who attended the meeting. "How much would you need? And when would you need it by?"

By Aug. 10, about $700,000 had rolled in. "I was maniacal," he said, confessing to using an Excel spreadsheet to map out his goals.

Meet me in St. Louis

Charles grew up in Guyana with a marine biologist father and a mother who was a special-education teacher and community activist. His brother Kerwin Charles, an economist who teaches at the University of Chicago, said the siblings spent their nights talking about their studies. "The Treaty of Versailles or Einstein versus Newton," Kerwin Charles recalled.

He went to school at Barber Scotia College in North Carolina and would travel to the District to visit friends and cousins. After graduating, he went to law school at Washington University in St. Louis and found himself with an unusual opportunity.

In 1996, some of the city's biggest corporations - including McDonnell Douglas, Anheuser-Busch, and several banks and investment firms - were under pressure to invest in St. Louis's minority communities. They tapped a Chicago investment banker, Byron Winton, to run the fund, called Civic Ventures. Winton, in turn, looked to Charles to serve as his right-hand man.

"He needed a proverbial Robin," said Charles, who had a background in business and law.

Former St. Louis mayor Freeman Bosley Jr. said the city's corporate community liked Charles. "He presents well," Bosley said. "When you meet him, he has the appearance . . . diplomatic, graceful - a lot of the things people lack or don't exhibit."

The federal Small Business Administration gave Civic Ventures an $8.7 million loan in 1998, and the fund invested it in several businesses, including a chain of movie theaters, a sports-apparel company and a computer training outfit.

But virtually all of its investments soured within three years, which Charles attributes to a "ripple effect" from the dot-com bust, among other reasons. "We had some flat-out failures - that's business," he said, but he added that a goal of the fund was minority participation. "We introduced countless entrepreneurs to the market."

In 2001, a federal judge placed the fund in receivership, and two years later, the fund was closed at a near-total loss to its investors. Of about $20 million invested, $395,000 was recovered in the end; taxpayers lost about $10 million on the deal.

Civic Ventures "really just died of natural causes," said John G. Silbermann, a government lawyer who handled the fund's liquidation.

Charles pressed on as a businessman, opening an investment venture with Winton and starting a development firm, Citadel Partners. But his projects didn't thrive. According to St. Louis court records, Charles was sued 13 times in the years after Civic Ventures's failure over tax claims, business disputes and a foreclosure. He continues to negotiate settlements in some of the cases.

Move to D.C.

In 2007, he left St. Louis for Washington. "He was not going to have to start his life over but start things anew," Kerwin Charles said. "D.C. seemed like a sensible place."

Charles's entry into the District was low-key on a large project. In 2007, the District selected a team led by mega-developer Monty Hoffman to develop the $1 billion planned Southwest waterfront. ACRESH, a minority-owned firm, teamed up with Hoffman to be a development and finance partner.

Charles said he was brought on as a consultant to the firm, but the deal "tanked," he said. Soon, Charles had to find other means and fell back on IT. "I get any business quickly," he said, snapping his fingers three times.

He also invested in a more unorthodox venture: a consulting firm catering to white-collar convicts who need to put their affairs in order before entering prison. One of his business partners is an old contact from St. Louis - Charles E. Polk Jr., a once-prominent lawyer jailed for tax evasion.

Throughout his professional career, Charles has shown a felicity for moving quickly and gracefully between businesses and other worlds. In St. Louis, for instance, he landed a role as a drug tycoon in an independent film after allowing its producer to use his office for filming.

"He is a very competent, confident . . . gentleman who knows how to - let me think of my words carefully - who is proficient at modulating human behavior, which is what makes him such a great actor, said the producer, Lloyd A. Silverman. "He has the ability to charm just about anybody."

For now, Charles said, if his nascent role in city politics doesn't work out, he'll remain on the scene. "You'll be seeing me," he said.

stewartn@washpost.com debonism@washpost.com

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