Braun records show losses, 4 mortgages
BY CHRIS FUSCO and ABDON M. PALLASCH Staff Reporters January 4, 2011 4:50PM
In a press release, mayoral candidate Carol Moseley Braun portrayed herself as an everyday Chicagoan fighting to keep her organic food company in business. | Al Podgorski- Sun-Times
Updated: May 18, 2011 1:32PM
Chicago mayoral candidate Carol Moseley Braun reported a negative income — of minus-$225,908 — to the IRS in 2008, the same year she took out a fourth mortgage on the spacious Hyde Park house she has put up for sale, records show.
The former U.S. senator and ambassador released two-page summary sheets from her 2008 and 2009 tax returns in hopes of quelling a storm that erupted Monday when she said she wouldn’t release any of her tax records before the Feb. 22 municipal election.
Braun changed her mind later Monday, and — like other mayoral front-runners already had done — released tax information Tuesday afternoon. In a press release, she said “my remarks regarding my tax returns” on Monday “sent the wrong message and I regret the statement.”
The documents Braun put online show she paid $785 in federal self-employment tax on $15,561 in income in 2009. For 2008, she paid $2,509 in self-employment tax even though she reported the income loss of $225,908.
Braun aides referred questions about her taxes to attorney Louis Vitullo, a Braun friend and campaign volunteer.
Vitullo said he wasn’t prepared to answer many questions posed by the Chicago Sun-Times — including how Braun was able to borrow money in 2008 in the face of apparent financial distress — but said he would seek answers in the coming days.
“We’re pursuing any questions you have,” Vitullo said.
Without going into detail, Vitullo said Braun’s financial losses stem from her ownership of Ambassador Organics, an organic food company she launched in 2005.
In her news release, Braun portrayed herself as an everyday Chicagoan fighting to keep her business afloat and took a shot at two of her opponents, former White House Chief of Staff Rahm Emanuel and former Chicago School Board President Gery Chico.
“The reality is that unlike Mr. Emmanuel [sic] and Mr. Chico, who traded on their government relations for vast riches when they left office, I did not,” Braun said. “My tax returns are one measure of the fight I have waged to keep my business running. It is not unlike what many small business owners and regular Chicago families are going through.”
Emanuel declined to comment. Chico’s spokeswoman, Brooke Anderson, responded, “Instead of indiscriminately attacking other candidates, Carol would be better served if she were simply transparent and released the remainder of her tax returns.”
Besides Ambassador Organics, Braun has a legal, consulting and public-speaking company, CMB One Corp., according to ethics statements she filed to run for mayor.
She also serves on the board of directors of two companies: MWH Global, an engineering firm, and North Carolina Mutual Life Insurance.
Taxable income from her government pensions and annuities totaled $21,988 in 2008 and $27,885 in 2009. She reported $55,000 in wages in 2008 and none in 2009.
Braun bought a 5-bedroom, 4.5-bath row house in Hyde Park for $1.7 million in late 2006. She put the house on the market last March 12 for $1.9 million.
The house has four mortgages, none of which have been paid off, Cook County property records indicate. Braun obtained two of those loans, which total $1.53 million, from Washington Mutual bank on Dec. 1, 2006.
Joseph Stroud, a millionaire TV station owner from Oak Brook, loaned Braun $250,000 for her food business in August 2006 and secured it with a mortgage on her house in September 2007, records show.
Stroud’s loan to Braun came nine months after Stroud was found liable of harassing a former employee in a racially charged court case that the U.S. Supreme Court upheld in November, the Sun-Times reported last month.
On Oct. 7, 2008, First Midwest Bank loaned Braun’s food company $97,025 and secured it with a $291,077 mortgage on her house, records show.
Though records indicate both the Stroud and First Midwest loans were to be paid in full in 2009, Braun told the Sun-Times last month she has renegotiated the terms of those loans and is up to date with her payments.
The same goes for payments on her other two mortgages, she said.