Eugene Sawyer’s quiet career as a city alderman took an unexpected turn when the City Council voted him to be acting mayor, making him for 16 months a household name in Chicago and leader of one of the world’s largest cities.
Since Sawyer left public office in 1989, his business career also has been marked by twists and surprises. But few of them have been happy.
As officer of an energy company, he saw his city contracts disappear and debts mount. When he switched the firm’s focus to wholesale tobacco deals in the late 1990s, things only got worse. “I’m sorry,” he says now, “I got involved in it.”
Sawyer’s adventures in the discount cigarette trade would partner him with business associates later convicted of contraband smuggling and plunge him into financial calamity.
Sawyer, 71, declared personal bankruptcy in October, citing a $1,122,442 court judgment from a failed cigarette deal as chief among his debts. His previously unreported bankruptcy case is pending.
Those court pleadings–along with interviews and hundreds of pages of other records–lay bare the former mayor’s tattered personal finances and depict Sawyer as a corporate executive who forged ties with dubious partners and then avoided meetings where he suspected they were cutting unethical deals.
“All these guys, they did a lot of things I didn’t know anything about,” Sawyer said of his former cigarette business partners.
“You know how people get in a room and close the door, and four or five people start sitting down talking? I smelled a rat,” Sawyer said. “I didn’t want to have anything to do with it. That’s why I didn’t know nothing about that.”
His firm, CEI International, initially supplied gas and heating fuel to city agencies before it foundered amid contract disputes and debt. To salvage its finances, the company switched to tobacco–and Sawyer, the co-founder, began working with new associates.
Last year, federal prosecutors charged three of those partners with participating in a tobacco-smuggling ring after they and Sawyer had parted ways. Other members of that ring smuggled Ecstasy pills, forged U.S. currency and submachine guns equipped with silencers, court records show.
Sawyer and the now-defunct CEI were not implicated in that Operation Smoking Dragon/Royal Charm smuggling case, which netted 87 defendants in 11 states, and Sawyer said he conducted CEI’s cigarette business with integrity.
Ex-partners convicted
Sawyer’s three former partners were convicted for smuggling crimes that began in November 2002, about a year after they split with CEI and launched a separate tobacco distributorship.
Among those convicted in the Smoking Dragon case were Chicago-based entrepreneurs Mohamed Aref and Edward Saad, who testified in separate civil lawsuits that they became Sawyer’s partners in CEI under unwritten, handshake agreements.
Aref and Saad pleaded guilty to contraband trafficking in the Smoking Dragon case.
Also pleading guilty to contraband trafficking in that case was their business associate Mustapha Kechtban, who negotiated key deals that launched CEI in the cigarette business, records show.
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Kechtban and Aref did not respond to requests for comment. Saad recounted his dealings with CEI in several Tribune interviews as well as court testimony. “Everybody made money but me,” Saad told the Tribune.
In 1999, while the three of them worked with Sawyer and CEI, tobacco giant R.J. Reynolds filed a separate federal civil lawsuit accusing CEI of distributing “gray market” cigarettes–those made for overseas sale–in the Chicago area.
Lawyers for CEI, which initially called itself Crown Energy Inc., denied those allegations. But RJR dropped its claim only after CEI declared corporate bankruptcy and shuttered in 2001, records and interviews show.
As acting mayor, Sawyer disarmed potential critics by gently acknowledging the headaches and self-doubt that came with City Hall’s top job.
`I just walked away from it’
In a recent interview at his South Side home, he seemed impatient with questions about CEI’s business deals and flipped between channels to watch baseball games.
“I just walked away from it,” he said with a wave of his hand. “I guess people thought I had a lot of money. I didn’t have any money.”
Sawyer wore a crisp yellow summer shirt and appeared to be living in modest comfort. Semiretired, he does occasional business consulting, he said.
In his October bankruptcy petition, Sawyer declared debts totaling $1.3 million and personal property, besides his South Side home, worth $10,000. He listed jewelry valued at $500, a 1992 Lexus that might bring $6,450 and $0 in his bank accounts.
He reported roughly $2,500 in monthly income from his city pension, Social Security and occasional consulting fees.
Sawyer’s attorneys acknowledged in court papers that he owed $69,790 in personal federal income taxes but wrote that Sawyer “was not guilty of making willful attempts to defeat or evade the taxes.” A federal judge has ruled that Sawyer might be able to reduce some of his tax debts through the bankruptcy case.
Also pending is a claim by a former wife seeking $34,392 in unpaid alimony and support. Her attorneys alleged that Sawyer “has not submitted accurate information” about his finances during bankruptcy creditors’ meetings. Sawyer denied wrongdoing.
Slowed in recent years by prostate cancer, a minor heart attack and other health problems, Sawyer has maintained a low public profile. In May, he helped organize a Chicago fundraiser for New Orleans Mayor Ray Nagin.
Sawyer launched CEI with Charles W. Harrison III. Harrison could not be reached for comment. (Erroneous published material identifying Charles Harrison III has been deleted from this paragraph.)
$475,000 is embezzled
The former mayor said Harrison brought Aref, Kechtban and Saad into the firm. Their tiny South Side start-up had secured million-dollar gas contracts from city agencies. But CEI racked up court judgments from creditors. In 1999, its comptroller was convicted of embezzling $475,000.
To salvage CEI, Sawyer said he and Harrison helped steer the firm into a new and seemingly lucrative market. “When we lost the contracts with the city, that’s when we started selling cigarettes,” Sawyer said.
CEI is near the bottom of the elaborate distribution chain that moves tobacco from the plants where cigarettes are rolled to the retail outlets where they are sold. Trolling an international market of suppliers, CEI bought container-loads of cigarettes and broke them into small shipments that were delivered to Chicago-area mini-marts and gas stations.
Illinois cigarette wholesalers must register with the state Department of Revenue and purchase tax stamps that are affixed to each pack. One of Sawyer’s primary roles was to help CEI buy the stamps from state, county and city revenue agencies, according to Sawyer and Saad.
“I wanted to make sure everything was legal,” Sawyer said.
Saad explained: “Mayor Sawyer was the one delegated to go to the bank and make deposits and get the checks for the stamps. That was his particular work. He’d drive me downtown with his chauffeur to get the stamps.”
Sawyer was `a figurehead’
The former mayor “was a figurehead for the business, for CEI. That’s all there was to it,” Saad said.
But Sawyer did pitch in occasionally in mundane tasks, Saad said, helping with opening cigarette cartons and feeding them into CEI’s stamping machine. The ex-mayor labored quietly at a steel worktable in the squat, brick building on East 87th Street that served as CEI’s headquarters.
In 1998, records and interviews show, Kechtban and CEI co-founder Harrison signed a six-page agreement to help CEI buy roughly $250,000 worth of cigarettes through a Florida wholesaler named SAM International. It was a deal that eventually would lead to Sawyer’s personal bankruptcy.
CEI received the cigarettes, and in November 1998, Sawyer signed an $8,300 CEI check to a Kechtban firm for “cigarette expenses” in the deal, records show.
Sawyer’s firm falls apart
But CEI failed to pay the rest of its debt, and SAM filed lawsuits against CEI in Florida and Cook County. After making initial payments, CEI “disappeared,” SAM director Sami Slim said in a telephone interview. “Next thing I knew, they were gone. They just stopped taking my phone calls and letters.”
In 2002, SAM won a $1.1 million court judgment against Sawyer individually, as well as judgments against CEI and Aref.
In his Tribune interview, Sawyer denied responsibility for the $1.1 million judgment. “That I didn’t have anything to do with,” he said. “I had appearances before the court a couple of times before I got out of that case.” He added: “I didn’t sign anything.”
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What Sawyer will have to pay, if anything, depends on the outcome of his bankruptcy case.
When he was asked if he ever met Slim, Sawyer said, “I don’t recall,” adding, “I didn’t know anything about SAM International in Florida.”
But Slim, in the telephone interview, said Sawyer personally flew down to Florida to negotiate their initial deals.
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