As Aurora mayor, Richard Irvin quietly launched firm with a top aide plus two others, who got a city contract

Two years ago, Aurora Mayor Richard Irvin quietly co-founded a consulting firm with a top city aide, who’s also a lifelong friend, and two men from Virginia.

The arrangement has raised several potential conflict of interest issues for Irvin: There’s a mayor going into business with a city employee who is so close to Irvin that the mayor calls him a stepbrother. There’s the employee skirting through a process requiring city approval for side jobs. And there’s the two Virginia men, who went on to get a $15,000 city contract without their ties to Irvin being disclosed.

As Irvin seeks to become Illinois’ next governor while running for the GOP nomination on June 28, the episode joins other previously disclosed arrangements in raising questions about where Irvin draws the line between public duties and private ventures.

Irvin has blanketed the airwaves portraying himself as a relative outsider who would clean up a state government but he has come under increased scrutiny especially over the five years he has run Illinois’ second-largest city.

That scrutiny now includes questions about the consulting firm Aurora Dynamic Solutions, based two blocks from City Hall. Irvin owns it with Michael Pegues, who Irvin hired right after being elected mayor in 2017 to be Aurora’s chief information officer. While the two are not related by blood, Irvin considers Pegues a stepbrother because Irvin’s biological father — who did not raise Irvin — at times raised Pegues, and Irvin has said he and Pegues have been close since childhood.

Irvin never announced his ownership in Aurora Dynamic Solutions, and it isn’t disclosed on the state ethics form he filed when he ran for governor. As of Tuesday, the consulting firm had a half-finished website that’s designed to be hard to Google but — if someone could find it — advertised a wide swath of services, including government consulting.

For its first seven months of existence, the firm also was co-owned by Ranapratap Chegu and Gyanchander Gongireddy, two Virginia men who run a consulting firm in suburban Washington, D.C. At that same time, the city gave the pair’s Virginia firm a $150-per-hour consulting contract to help the Irvin administration work with COVID-19 data, according to Aurora city records.

Irvin’s campaign said the mayor’s firm was started in 2020 basically as a fallback career if Irvin, a defense attorney by trade, lost his 2021 mayoral reelection bid. Irvin, of course, didn’t lose that race. So, his campaign said, the firm has just sat there, with zero clients or income, for nearly two years.

“Mayor Irvin never intended and does not intend to commence any business operations through Aurora Dynamic Solutions until after he is out of public office,” campaign spokeswoman Eleni Demertzis said.

As for why the administration inked a deal with the mayor’s former Virginia business partners, a spokesman for Irvin’s Aurora administration said the contract followed normal city rules.

Still, political experts said the episode raises questions: Why would a sitting mayor start a business with Pegues, a city employee he’s supposed to be supervising? And how did two of their business partners end up getting city work?

While he saw no “egregious” ethical violations, Kent Redfield, a professor emeritus of political science at the University of Illinois at Springfield, said that “there is a casual mixing of the public and private interests and a lack of concern over transparency which is all too common in politics as usual in Illinois.”

The latest revelations follow other issues that have been raised involving Irvin and his time as Aurora mayor.

The Aurora Beacon-News first reported in 2018 about donations to Irvin from several companies that benefited from city actions. One — telecommunications firm Scientel Solutions — became a top contributor after Irvin persuaded a reluctant City Council to approve a new antenna for the firm over complaints it went against city plans and would interfere with plans already approved for a nearby firm’s antenna.

WTTW-Ch. 11 recently reported Scientel continued to contribute more to Irvin while winning city contracts, as had developers who received city incentives. Bloomberg reported business ties between Scientel and Irvin’s biggest political benefactor, Ken Griffin.

Another type of potential conflict emerged in mid-May. A joint investigation by the Tribune and Aurora Beacon-News uncovered how Irvin came to the scene of his then-girlfriend’s arrest by Aurora police for allegedly hitting a store security guard. According to a police report, an officer overheard Irvin saying the charges “would be taken care of.”

Irvin has maintained that he’s never crossed an ethical or legal line. He said he has not allowed political contributors to influence his decisions. As for what he said during his girlfriend’s arrest, Irvinsaid he meant the case would be taken care of through the traditional legal process, not by him meddling.

New venture

Irvin has blasted into contention for the Republican slot for governor, armed with $45 million pumped into his campaign by Griffin, Illinois’ richest man and a longtime political adversary of Democratic Gov. J.B. Pritzker. Irvin — hoping to convince Republicans to let him take on Pritzker — has used Griffin’s cash to saturate TV and other media, positioning himself to voters as a tough-on-crime, true-conservative war veteran eager to cleanse Springfield of corruption.

Though he has been criticized on the campaign trail for dodging basic questions, Irvin has portrayed himself as transparent as both a mayor and candidate for governor. But his development of Aurora Dynamic Solutions has flown under the radar. In June 2020, public records show, Irvin filed paperwork with the state to incorporate the company, listing himself as the top of four managers of a firm that initially would be run out of his condominium.

When asked recently about the business, Irvin’s campaign confirmed to the Tribune that Irvin became the firm’s majority owner, with a 51% stake, after pitching in $5,100 to fund the startup. Among the other three was Pegues, who fronted $1,900, while each of the Virginia men added $1,500, the campaign said.

The reason Irvin began the business in the summer of 2020, his campaign said, was because he was up for reelection to his roughly $165,000-a-year mayoral post in April 2021. In case Irvin lost, he and Pegues, both military veterans, wanted to get an early start at the “complicated and lengthy” process needed to certify a business as veteran-owned, Irvin’s campaign said. That would help them more easily land government consulting contracts.

The U.S. Department of Veterans Affairs, which handles certifications, told the Tribune the process typically takes about a month, even amid the early pandemic in 2020. Aurora Dynamic Solutions has repeatedly started the certification process but not yet completed it, a VA spokesman said.

There was little controversy when Irvin hired Pegues for a top city job. But, Redfield said, starting a firm together adds a new dimension to a boss-employee relationship. Irvin hired and supervised Pegues, who is paid roughly $161,000-a-year by taxpayers.

“Anytime you’ve got a situation where people can question whether you’re taking into account personal feelings … in supervising or hiring, then people wonder what’s the motivation: Is it entirely in the best interests of the city? Or are you pulling punches or putting your thumb on the scale because of personal relationships?” Redfield said.

When asked how starting a firm with a subordinate was not a conflict of interest, Irvin’s campaign said the mayor never intended to run the business with Pegues until Irvin was out of office.

The Tribune also found Pegues did not file a formal application with the city’s human resources department when he helped start the firm, even though city rules call for employees to do so for side jobs. While exempting elected officials, the city code broadly defines a side job as any involvement “in the management, operation or direction of any enterprise, public or private.”

Aurora spokesman Clayton Muhammad said Pegues didn’t file the formal application for the side business “because the company doesn’t have employees or revenue.”

“As things move forward, the process will be followed,” Muhammad said.

Muhammad also defended the mayor not publicly announcing that he created the new firm, saying there was no requirement and — if he had done so at a city meeting — it could have run afoul of ethics concerns that he’d use his city position to promote his private venture.

Pegues did not return calls for comment.

Irvin and Pegues did disclose their ownership of the firm in required city filings in spring 2021 that are only viewable by those who formally request the record through the Freedom of Information Act from the Aurora clerk. Irvin submitted his the same day Aurora voters reelected him.

Irvin has not disclosed his ownership of Aurora Dynamic Solutions on separately required state forms filed when he ran for governor, which are viewable online. Irvin’s campaign noted the state rules don’t require disclosure of firms that make no money; so the firm was left off state forms.

A website. An office. No clients.

On the firm’s website — — Irvin was recently pictured as “CEO and Co-Founder” while Pegues was “President and Co-Founder.”

It advertised services from arranging cloud computing and mining big data to a “wide variety of legal/paralegal support to state, local and federal government agencies.” Still, its source code was written in a way to stop search engines from indexing it. That meant the website couldn’t be found in a simple Google search.

Irvin’s campaign said the website remained a work in progress because the firm had never begun soliciting work. In fact, the campaign said, the firm has lost money.

Tax filings provided by Irvin’s campaign, for the period ending December 2021, show the firm reported no revenue. Expenses included $1,900, which the campaign said was for accountants, $3,600 on the latest office site and another $1,787 for travel last year. The campaign said the travel money went to cover a trip to Washington, D.C., to help get the firm certified as veteran-owned.

The 2021 tax return also showed a $1,200 reimbursement. The campaign said Irvin mistakenly used the firm’s credit card for a purchase unrelated to the new company.

The firm remains active, at least on paper. Even though Irvin won his reelection, three months later Pegues filed an annual report with the state, which kept the firm going. It now has an office on the second floor of the Aurora Business Center. Irvin’s campaign said the latest site was needed to apply to be a veteran-owned business.

On a late May visit to that suite, the Tribune found a windowless door beside a small placard affixed with the name “Aurora Dynamic Solutions LLC.” No one answered the door.

From business partner to city vendor

While Irvin’s Aurora Dynamic Solutions reported making no money, a separate firm led by the Virginia men did get city work.

Virginia records show Chegu and Gongireddy run a consulting firm in that state called Peridot Solutions. Fifteen days after Aurora Dynamic Solutions was incorporated in Illinois, Peridot submitted a proposal to Irvin’s administration on helping the city handle COVID-19 data, Aurora city records show.

Chegu and Gongireddy left Aurora Dynamic Solutions in March 2021, according to Illinois records. And Aurora records show that, less than seven months later, the city paid Peridot Solutions $15,000 for the data work.

When the Tribune called Peridot, a man who identified himself as Gongireddy confirmed the pair had begun the business with Irvin and Pegues but declined to discuss why, saying “it’s a private matter.”

Gongireddy declined to answer more questions, then hung up. Neither Gongireddy nor Cheguresponded to questions submitted to Peridot by email about the new firm and the contract.

Demertzis, with Irvin’s campaign, said the mayor and Pegues started the firm with the Virginia men because of their specialty in information technology. She said the pair was not promised any city benefits or business when they joined the new venture. When they left, their seed money was returned to them, she said.

In October 2021, Peridot’s $15,000 contract for “data and analytic consulting services” was one of 49 bills approved by the City Council. It was tucked amid payments ranging from $75 for a barbecue fundraiser to $1 million for a new ladder truck.

Those bills won unanimous approval in less than a minute. Aurora aldermen asked no questions, and Irvin didn’t volunteer his ties to the men behind Peridot.

When asked why Irvin didn’t disclose the arrangement, Muhammad said the contract “was processed properly through the city’s procurement process.”

Even so, what happened with the mayor’s firm and the contract raises issues that voters could weigh come Election Day, said longtime Illinois political scientist John Jackson, a visiting professor at Southern Illinois University Carbondale’s Paul Simon Public Policy Institute.

“People are cynical on the politicians, and this is just one additional straw ... on the camel’s back that might lead voters to add them up and vote against this guy,” Jackson said.

Steve Lord from the Aurora Beacon-News contributed.