Ad firm owes state taxes

Subcontractor helping on tobacco campaign

Lost corporate charter

Minority firm says change of address may be cause

July 22, 2002|By Greg Garland | Greg Garland,SUN STAFF

The group running the state's new $14 million "Smoking Stops Here" advertising campaign includes a firm that owes back state taxes and has lost its corporate charter to do business in Maryland, records show.

Twenty-First Century Group Inc. of Baltimore, a subcontractor, lost its charter in October -- three months before the Glendening administration awarded the advertising contract to a group headed by GKV Communications, formerly Gray/Kirk/VanSant Advertising.

Adrian Harpool, chief executive of Twenty-First Century Group, said he wasn't aware that his firm's charter had been forfeited for failing to pay $4,300 in state taxes owed for 1999 until a reporter asked about it Friday.

"All this stuff is a surprise to me and is a little off-putting," Harpool said. "This is not a position I like to find myself in."

The minority-owned company's charter was forfeited at the direction of the Maryland comptroller's office, which sends letters warning taxpayers before taking such actions.

"If I had received any notice that our corporate charter was in jeopardy, it's not something I would have ignored," Harpool said.

In Maryland, companies are prohibited from doing business with the state if they are not paid up on their state taxes.

However, state officials say they check the status only of prime contractors, not subcontractors.

"The state's contract is with the prime contractor," said Russell L. Jenkins, state procurement officer for the anti-smoking advertising contract. "We don't deal directly with any of the subs."

The advertising contract for the anti-smoking campaign requires that 25 percent of the money be spent with minority vendors.

Harpool said he hopes that much of that -- $2.5 million to $3 million -- will be spent through his firm. A substantial portion of the money likely would go toward buying advertising on radio and other media that reaches the minority community, he said.

"The intent, as I view it, is for us to do approximately 25 percent of the work," Harpool said of his deal as a partner with GKV Communications.

GKV Communications Vice President Kevin Kempske said there is no set amount of the contract designated for Twenty-First Century Group but that 25 percent of the advertising contract is to be spent with minority-owned businesses. Those include companies owned by African-Americans, women, Hispanics and others, he said.

Kempske said GKV was not aware of any problems with its minority-owned partner's corporate charter. He noted that Twenty-First Century Group had a certificate from the state that it was minority business enterprise qualified to do business with the state.

"We're communicating with [Harpool's company] to resolve this quickly and appropriately," Kempske said.

Twenty-First Century Group's charter was forfeited because it owed $4,300 in withholding taxes from 1999, according to comptroller's office officials.

Those are the taxes that are withheld from the paychecks of employees and are supposed to be remitted to the state.

Other state records show tax liens totaling $2,395 were filed against the company in 2000 and last year for failing to pay state unemployment taxes.

The company also has had several civil suits filed against it since 1998, records show. Three led to judgments totaling $8,292; others have not been resolved.

Harpool acknowledged that his small business has struggled at times.

"We have bumped our knees along the way," he said. "Things don't always turn out."

Harpool speculated that notices that his company's charter was about to be forfeited did not reach him because the company changed addresses.

The firm has moved twice since incorporating in 1996 at a private residence on North Eutaw Place, he said.

"We've been at 7 E. Redwood St. since November 2000," he said. However, he said he learned when he checked Friday that state incorporation records list the company's official address as on North Eutaw Place.

Harpool said that Twenty-First Century Group paid state taxes from the 7 E. Redwood St. address for 2000 and last year. He said he isn't sure why state records show his business at its previous address.

Harpool said he is prepared to write a check today to the state to pay whatever taxes his company owes.

"We're going to do whatever we need to do to get the charter reinstated," he said.

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