By Jonathan Phelps
ANDOVER — James Lyons Jr. touts his 35 years of small business experience as he campaigns for state representative.
But the Andover Republican's business credentials are being questioned by opponents who cite a record of unpaid taxes and legal troubles connected to his family's business.
Between 1995 and 2003, at least 14 federal, state and local tax liens amounting to more than $180,000 had been issued against Lyons and the business, according to records at the Northern Essex County Registry of Deeds.
Lyons, 57, said the back taxes have been paid and the liens have been lifted. The Registry of Deeds confirmed the liens have all been cleared. The last lien was cleared in February 2005.
Lyons, who is challenging Andover Democratic Rep. Barbara L'Italien, said the liens represent a struggle that is common for small businesses.
He and his wife, Bernadette, own Dandi-Lyons, a retail flower and ice cream shop with four locations: Reading, Tewksbury, Leominster and Manchester, N.H.
Five years after the last lien was lifted and weeks before the election, anonymous letters began turning up in mailboxes around the district citing the tax liens and accusing Lyons of unethical business practices.
Lyons said he received reports of the letter starting two weeks ago. He said they apparently are being sent to supporters who have his campaign signs on their lawns or have contributed to his campaign.
"This is part of a smear campaign that is secretly funded and secretly distributed by an unsigned, anonymous source," Lyons said. "To attack our family business is gutter politics."
He said the business was struggling during the 1990s and simply didn't have enough money to pay all its obligations.
"We've been in business for over three decades, and my wife and I have worked extremely hard," Lyons said, adding it was no easy task paying off the tax obligations and other debts. "Our family business has certainly had many ups and downs, like a lot of other businesses."
Lyons will face off against L'Italien on Nov. 2 for the right to represent the 18th Essex District, which includes parts of Andover, Boxford, Georgetown, Haverhill, Methuen and North Andover.
L'Italien, who has held the seat since 2003, said she understands the challenges of running a small business. But she said Lyons' failure to pay taxes represents a pattern over a period of time, not a one-time struggle.
"He has been running a campaign on being a successful small businessman," L'Italien said. "This speaks to the heart of his credibility. Successful small businessmen don't cheat fellow small business owners and fellow taxpayers."
L'Italien said the anonymous letters are not being distributed by her campaign and said that she will continue to run a positive "issue-oriented" campaign.
The anonymous letter attacking Lyons encourages voters who cannot vote for L'Italien to write in another candidate, such as Republican John Thorlin, 23, of Andover, who lost to Lyons in the primary.
Thorlin said he has nothing to do with the letter and now supports Lyons for the seat. "It really is shocking, I am not encouraging anyone to write my name in," he said.
While acknowledging the liens, Lyons said the anonymous letter's accusations of unethical business practices are false.
In addition to the liens, the letter pointed to a 2002 Rockingham Superior Court case in September 2002, in which the plaintiff, Tiki Trust, claimed Lyons' business breached a commercial lease agreement for a property in Seabrook, N.H., by vacating the property and not paying the rent.
The realty trust also alleged that Lyons promoted "injustice or fraud upon the plaintiff (because) the corporation was formed and carried on its business without sufficient assets," according to a court document.
A judge ordered Lyons to pay $42,960 in back rent and real estate taxes and criticized the way Lyons ran the business.
"These facts demonstrate that defendant (Lyons) undercapitalized his corporation, he knew of the corporation's financial deficiencies but continued to allow the business to incur debt and other legal obligations," the judge wrote.
When the judgment remained unpaid in September 2006, a judge increased it to $63,061 to cover interest and added legal costs. Lyons said he has paid the full amount and the case has been settled.
Lyons also encountered more tax troubles last year. While no lien was filed, the town of Tewksbury issued an "instrument of taking" last November for $20,863 in taxes that were due in May 2009. The taxes were paid on Feb. 2 of this year, according to the Tewksbury tax collector's office.
Lyons, whose campaign Web page includes the slogan "Declare your independence from higher taxes," said his experience has taught him how excessive taxation and regulation hurt small businesses.
He said Beacon Hill has continued to punish local businesses by increasing the state sales tax from 5 percent to 6.25 percent, which has especially hurt businesses located near sales-tax-free New Hampshire.
Lyons said L'Italien voted for these increases, while he has pledged to roll back the sales tax to 5 percent, along with the income and meals taxes.
"They are just pounding us with taxes, we need leaders who understand the battles of small business owners and will fight to reduce the tax burden on them," Lyons said. "We know firsthand what people are going through."