GOP uses his past to haunt O’Rourke
WASHINGTON — Progressive, photogenic and hip, Congressman Beto O’Rourke of El Paso has electrified Democrats with his underdog quest to take down a conservative Republican icon, Sen. Ted Cruz.
Running for the Senate simply as “Beto,” O’Rourke has sought the high ground with a “people powered” campaign rejecting special interest and corporate PAC money, notwithstanding his roots in a wealthy, politically connected family that has not been immune to scandal.
O’Rourke’s early life and career have come under increased public scrutiny lately, partly because of Republican attacks focused on his family ties.
As a member of the El Paso City Council, he was accused of a conflict of interest in 2006 for pushing an urban renewal plan involving his father-inlaw, who once was described as “the richest man in El Paso.”
As a member of Congress, O’Rourke was criticized for investing in initial public stock offerings for Twitter and other
companies, an ethics violation for a House member.
O’Rourke said a financial manager made the investments. He reported the violation when it was brought to his attention and turned his profits over to the U.S. Treasury.
O’Rourke’s mother, who was his partner in several business ventures, ran a family furniture store that was targeted by the IRS in a $630,000 tax fraud case in 2010.
None of those controversies slowed his political ascent. Now, in the heat of a close U.S. Senate race, the picture that emerges is more complicated than O’Rourke’s image as a fresh-faced outsider taking on Washington special interests with nothing but enthusiasm, audacity and small-dollar donations.
O’Rourke came of age surrounded by El Paso business and civic leaders who saw it as their mission to transform their city into the jewel of the American Southwest.
A fourth-generation Texan, he’s the son of the late Patrick O’Rourke, a politically active businessman who was an El Paso County judge and once ran for Congress — as a Republican.
“His family has long-term roots here,” said Joyce Wilson, a nonprofit job training executive who served as El Paso’s city manager. “His father was beloved, widely regarded and respected. His mother’s family likewise was well-established. They’re a really great family.”
O’Rourke, now 46, continued the family’s legacy of civic involvement, as well as its business enterprises, mainly in real estate. He has reported a net worth of $9 million, compared with about $3.8 million for Cruz.
O’Rourke has put little if any of his personal fortune into his Senate campaign. Instead, he has chosen to run as a populist who eschews pollsters, PACs and highpriced Washington consultants.
He trades — in the words of campaign manager Jody Casey — on “conscience, real conviction and a good moral compass.”
Republican Gov. Greg Abbott has called O’Rourke’s appeal “cultlike.”
Cruz and his Republican allies have tried to turn O’Rourke’s personal and family biography into a political liability. They’ve uncorked attack ads on the tax fraud case, O’Rourke’s “shady past” on the City Council and his prohibited stock purchases as a member of Congress.
They’ve also called attention to his past missteps, notably a widely reported DWI arrest in September 1998, on O’Rourke’s 26th birthday.
According to police records obtained by the Hearst Newspapers, O’Rourke lost control of his car on Interstate 10 about a mile from the New Mexico border and crashed into a truck.
A witness told police O’Rourke tried to leave the scene.
O’Rourke has acknowledged driving while intoxicated — “a serious mistake for which there is no excuse” — but he has denied any attempt to flee. He completed a court-approved diversion program and had the charges dismissed.
O’Rourke’s ambition was set early in life, when his parents sent him to Woodberry Forest School, a private, all-male boarding school in the Virginia countryside whose alumni include Marvin Bush, youngest son of George H.W. Bush and brother of George W. Bush.
After college, O’Rourke worked with internet service providers in New York. In 1998, he returned to El Paso, where he founded Stanton Street Technology Group, a web and software company. His mother, Melissa O’Rourke, would eventually become a shareholder.
But O’Rourke’s wealth has been mainly tied up in two other family real estate businesses, both involving his parents.
One is Peppertree Square, a West El Paso shopping center that O’Rourke co-owns with his mother. She turned over a stake worth $1 million to $5 million to him in 2012, the year he ran for his U.S. House seat, records show.
The shopping center’s anchor tenant was Charlotte’s Furniture, a store that had been in the family since 1951.
The store came under IRS scrutiny in 2010 for making a series of cash deposits of just under $10,000, allegedly designed to avoid financial reporting requirements.
According to prosecutors, the transactions totaled more than $1 million, about $630,000 of which came from a “particular customer” who has never been publicly identified.
Melissa O’Rourke, who had served on the board of the El Paso branch of the Federal Reserve Bank of Dallas, agreed to a guilty plea on behalf of the company.
The charge was “structuring” transactions to avoid reporting requirements, a felony. Charlotte’s Furniture was hit with a $250,000 fine.
Melissa O’Rourke called it a “clerical error,” although court documents show Charlotte’s ad- mitted that “the purpose of this structuring was to avoid” financial reporting.
O’Rourke, who hadn’t worked at the store in years, says he still has no idea who the major customer was, or whether a $630,000 furniture bill would be unusual.
“I also don’t know when someone is completely remodeling their home or buying all new furniture, I don’t know what the averages are to do that, with the design costs, the furniture costs, the shipping, …” he said. “So I don’t know what the context is for that amount of money.”
Cruz has sought to connect O’Rourke to Charlotte’s “criminal activity” because he later held an interest in the shopping center where Charlotte’s Furniture was located. O’Rourke has said he had no involvement in the furniture store, other than listing it as creditor in a 2006 financial disclosure filed with the city of El Paso when he was a councilman.
His mother closed the store last year.
Despite the political attacks over the IRS case, O’Rourke said he counts his family connections as a blessing.
“I recognize that I have been exceptionally fortunate in my life,” he said. “My responsibility is to make the most of that, in what I can give back and contribute.”
It wasn’t the first time the family had been at the center of a political storm.
O’Rourke’s father was a popular county commissioner and judge from 1978 to 1986.
In 1983, sheriff ’s deputies who were installing a radio in his Jeep found a condom filled with a white powder believed to be either cocaine or heroin, according to media reports at the time.
According to Beto O’Rourke, who was 11 at the time of the incident, the source of the drugs remains a mystery.
“My dad’s guess was that someone planted it or threw it into the Jeep,” O’Rourke said. “He always left the Jeep unlocked. It’s just hard for me to believe he would have been county judge of El Paso driving around with a big bag of drugs in the front of his Jeep.”
Urban renewal controversy
O’Rourke’s public life started in 2005 when, at age 32, he ran for the City Council and became one of El Paso’s youngest-ever elected officials.
That year, he married Amy Hoover Sanders. A charter school executive, she generally has stayed in the background of her husband’s career.
But in 2006, the personal became very public for the couple. A year into O’Rourke’s council tenure, he became enmeshed in a controversial urban renewal plan led by the Paso del Norte Group, a nonprofit spearheaded by his father-in-law, William Sanders.
The plan called for redeveloping a blighted part of downtown El Paso, including a largely Hispanic residential area called Segundo Barrio. Opponents fearing gentrification dubbed it “urban removal.”
Residents and business owners facing displacement organized and filed a pair of ethics complaints with the city citing O’Rourke’s ties to his father-in-law.
“O’Rourke,” their complaint said, “is impermissibly entangled in the Paso del Norte Group’s Downtown Revitalization Plan, through both family and business ties.”
His critics homed in on past work O’Rourke’s tech company had done for Paso del Norte, as well as his vote to approve the group’s “Downtown 2015” redevelopment plan.
Despite the rancor, O’Rourke continues to defend his involvement with the plan, which sought to bring investment and jobs to downtown El Paso.
“I just didn’t see how I could be the representative of that district, for those constituents of mine, and not be part of the process of ensuring that there was a better future for the families living there,” he said.
The city’s Ethics Review Commission eventually dismissed the complaints.
Amid a series of angry public hearings and town halls, O’Rourke abstained from voting on a downtown Tax Increment Reinvestment Zone, which would have provided tax incentives to developers and, more controversially, triggered the city’s eminent domain powers.
A year later, he was re-elected to a second term, carrying the precincts that had been included in the development zone.
Stuart Blaugrund, a Dallas attorney who represented the opponents, said that while O’Rourke appeared “tone deaf ” to the appearance of a conflict of interest, he “ultimately did the right thing” by recusing himself from the vote on the special tax zone.
For that reason, Blaugrund said he considered it “misleading” for Cruz to accuse O’Rourke in a recent attack ad of voting to “use government power and eminent domain to take away homes from residents in the Segundo Barrio.”
Wilson, the city manager at the time, said El Paso’s eminent domain powers never were used as part of the downtown development plan, which largely stalled after the Great Recession struck in 2008.
Wilson credited O’Rourke and his allies with trying to modernize the city’s public transportation, cleaning up parks and beautifying the city.
“He was a visionary,” she said. “He was one of a group of young elected leaders who came in and transformed this city.”
Beto O’Rourke has fended off attacks regarding past charges like a DWI, tax fraud involving a family business and investments.
O’Rourke defended his involvement in an urban development plan while serving on El Paso’s City Council. The plan received criticism because of its ties with a nonprofit run by his father-in-law.