GOP uses his past to haunt O’Rourke

San Antonio Express-News (Sunday) - - Front Page - By Kevin Diaz

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.”

‘Real con­vic­tion’

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.

Fam­ily his­tory

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.”

Mark Lam­bie / El Paso Times

Beto O’Rourke has fended off at­tacks re­gard­ing past charges like a DWI, tax fraud in­volv­ing a fam­ily busi­ness and in­vest­ments.

Ruben R. Ramirez / El Paso Times

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.

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