Photo: Mark Lambie/Courtesy El Paso Times Photo: Ruben R. Ramirez/Courtesy El Paso Times Photo: Ruben R. Ramirez/Courtesy El Paso Times Photo: El Paso Times File Photo Photo: Rudy Gutierrez/Courtesy El Paso Times Photo: Victor Calzada/Courtesy El Paso Times Photo: Rudy Gutierrez/Courtesy El Paso Times

WASHINGTON - Politically progressive, photogenic, and hip, El Paso Congressman Beto O’Rourke has electrified Democrats with a cool factor that fuels his underdog quest in Texas to take down conservative Republican icon Sen. Ted Cruz.

Running for the U.S. Senate simply as “Beto,” O’Rourke has sought the reformist 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.

A former city council member and three-term member of Congress, O’Rourke’s early life and career has only recently come under increased public scrutiny, partly through Republican attacks focused on his family ties.

On the city council, he was accused of conflicts of interest in 2006 for pushing an urban renewal plan involving his wealthy father-in-law, a multi-national real estate investor once described as “the richest man in El Paso.”

As a member of Congress, and an investor with an extensive portfolio, he was criticized for taking part in initial public stock offerings in Twitter and several other businesses, an ethics violation that he quickly remedied when it was brought to his attention.

Along the way his 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 hurt his progression from Columbia University in New York, then bass player in an underground punk band, then tech entrepreneur in El Paso, and finally a city council member and congressman. But until recently his early life had hardly registered a blip on the nation’s political radar.

Now amid the hottest Senate race in the country, the picture that emerges is more complicated than O’Rourke’s image as fresh-faced political outsider taking on Washington’s entrenched political interests with nothing but enthusiasm, audacity, and small-dollar donations.

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The scion of one of El Paso’s foremost families, O’Rourke came of age surrounded by business and civic leaders who saw it as their mission to advance their city into a cultural and commercial hub - the jewel of the American Southwest.

A fourth-generation Texan, O’Rourke is the son of a politically active businessman who worked with former Democratic Gov. Mark White. Patrick O’Rourke, who was killed in a bicycle accident in 2001, 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.”

A campaign that highlights ‘Conscience, real conviction …’

O’Rourke, 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 about $9 million, according to the nonpartisan Center for Responsive Politics. O’Rourke is a much wealthier man than Cruz, who reports a net worth of about $3.8 million.

But O’Rourke has put little if any of his personal wealth into his Senate campaign.

Instead, he has chosen to run as a populist who eschews pollsters, PAC donations, and high-priced Washington consultants. He trades - in the words of campaign manager Jody Casey - on “conscience, real conviction and a good moral compass.”

In a crusade that seeks to transcends partisan politics - Republican Gov. Greg Abbott called his appeal “cult like” - O’Rourke has taken his idealistic message to college campuses statewide, kicking off with a massive rally in Austin headlined by Texas music legend Willie Nelson.

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Cruz and his Republican allies, meanwhile, have tried to turn O’Rourke’s personal and family biography into a political liability, seeking to erase some of his luster in the national press and blunt his momentum in Texas. Accordingly, they have uncorked attack ads on the tax fraud case, O’Rourke’s “shady past” on the city council, and his prohibited stock purchases in Congress.

With polls tighter than analysts ever expected, and the Democrat outpacing Cruz’s national fundraising network, O’Rourke’s political opponents also have sought to reopen old wounds that O’Rourke thought he had put behind him, notably a widely-reported DWI arrest on his 26th birthday, involving an accident from which he reportedly tried to leave. He has acknowledged the DWI, but denied any attempt to flee.

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His critics also have tried to use his punk rock past against him, posting a photo on Twitter of the then-long-haired band member posing in a dress on a record cover.

O’Rourke has responded to the “negative stuff” with a new ad cut during a livestreaming event on Facebook, where his campaign intersects with a nationwide network of activists and supporters. “We can be defined by our fears,” he said on one take, “or we can be known by our ambition and aspirations.”

The ‘particular customer’ who paid $630k in cash

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. Among the school’s notable alumni is Marvin Bush, the youngest son of George H.W. Bush and brother of George W. Bush.

By the time O'Rourke graduated from Columbia in 1995 with a bachelor’s degree in English Literature, he’d already tasted life in the rock underground with the punk band Foss, which put out a 7-inch record in 1993, “The El Paso Pussycats.” The cover photo, which Cruz supporters adopted to embarrass O’Rourke, still traverses the Internet, serving to somewhat bolster his skateboarding hip quotient.

After working with internet service providers after college in New York, O’Rourke returned in 1998 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 in the company, extending their business partnership from the family investments in real estate.

Amy O'Rourke, whom he married in 2005, joined the company as well, running it from the time he went to Congress in 2013 until March, 2017, when she sold all shares in the company for between $250,000 and $500,00, according to House financial disclosure reports.

One of Stanton Street’s clients was O’Rourke himself. Since 2011, his political campaigns for the House and Senate have paid the company more than $125,000 for web hosting and other online services, according to federal campaign reports.

But O’Rourke’s wealth has been mainly tied up in two other family real estate businesses, both involving his parents.

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One is Peppertree Square, a West El Paso shopping center O’Rourke still 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, financial disclosure records show.

The shopping center’s anchor tenant was Charlotte’s Furniture, a store that had been in the family since 1951. Over the years, O’Rourke had worked on and off at the store’s warehouse and on delivery trucks.

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 it from a “particular customer” who has never been publicly identified.

Photo: Rudy Gutierrez/Courtesy El Paso Times

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 was hit with a $250,000 fine. Melissa O’Rourke called it a “clerical error” at the time, although court documents show that Charlotte’s admitted that “the purpose of this structuring was to avoid” filing financial reporting forms.

Pouncing, the Cruz campaign noted that the law Charlotte’s Furniture violated was originally aimed at “drug-related money laundering operations.” Others wrote it off to El Paso’s status as a shopping hub for wealthy Mexicans from the adjoining state of Chihuahua, who often transact business in cash.

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 tab 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 would later hold an interest in the shopping center where the store was located. But immediately prior to the IRS case, O’Rourke said he had no involvement in his mother’s furniture story, other than listing it as creditor in a 2006 financial disclosure report filed with the city of El Paso.

His mother closed the store last year, as O’Rourke’s Senate campaign got underway. A Republican, she abjured any political motive. “For me, it’s my personal life,” she told the El Paso Times. “I’m just ready to call it.”

Facing political attacks over his mother’s tax case, O’Rourke still counts his family blessings. “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 was not the first time the family had been at the center of a political storm.

O’Rourke’s father, known as “Pat” O’Rourke, had been a popular county commissioner and judge from 1978 to 1986. In 1983, sheriff’s deputies installing a radio in his Jeep found a condom filled with a white powder believed to be either cocaine or heroin, according to press reports at the time. A sheriff’s captain who ordered the substance destroyed was later indicted by a grand jury on charges of official misconduct and tampering with evidence. According to an El Paso Times obituary for his father, the elder O’Rourke and the sheriff’s captain had said they believed the drugs were planted by one of the judge’s political enemies.

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.”

‘Impermissibly entangled’ in a redevelopment plan

O’Rourke’s public life started in 2005 when, at the age of 32, he ran for city council and became one of El Paso's youngest-ever representatives.

That was the same year he married Amy Hoover Sanders.

Amy O’Rourke, an educator and charter school executive, has generally stayed in the background of her husband’s political career, though she is a constant presence at his Senate campaign events.

“If you know me,” the mother of three told supporters in a June email, “you know I am a private person who likes to work behind the scenes.”

But in 2006, the personal became very public for the O’Rourke family. Just 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 business organization spearheaded by his father-in-law.

As originally envisioned, 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, William Sanders.

“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. O’Rourke had been a dues-paying member of Paso del Norte, though he dropped out soon after being elected to the council.

Despite the rancor, O’Rourke continues to defend his involvement in 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.

“Given that the complaint was dismissed, it would have been for the reason that the complaint, if true as alleged, would not as a matter of law constitute a violation of the ethics ordinance,” said Elaine Hengen, who was an assistant city attorney at the time.

O’Rourke said at the time that he did not see a conflict of interest in pushing the revitalization plan “because the Paso del Norte Group isn’t getting anything out of this.”

Opponents, however, argued that Sanders and his associates stood to make millions through a real estate investment trust called the Borderplex Community Trust, which was formed to buy real estate in downtown El Paso for redevelopment.

Amid a series of angry public hearings and town halls, O’Rourke ultimately abstained from voting on a downtown Tax Increment Reinvestment Zone, which would have provided developer tax incentives 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 in an interview that while O’Rourke appeared “tone deaf” to the appearance of a family 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, El Paso’s city manager at the time, said the city’s eminent domain powers were never used as part of the downtown development plan, which largely stalled as the Great Recession struck in 2008.

Wilson also 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. They did things that nobody had done for decades, turning this city on its head. They wanted to make El Paso competitive for the 21st century.”

But resistance and recall petitions, like the one O’Rourke faced over the Paso del Norte plan, were part of the equation. “They were always being threatened with recall,” Wilson said. “And they were just like, ‘You know, we’re going to do the right thing, and if you want to recall us, that’s fine.’”

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The battle over Paso del Norte anticipated one often overlooked aspect of the current political divide over the border.

O’Rourke's sunny vision of immigrant energy in many ways echoes Sanders’ focus on “cross border” business development in a region known for its young, bilingual, bicultural work force.

“The U.S.-Mexico border region is a very attractive place to be,” Sanders said in a 2006 magazine interview.

Sanders’ vision took form in a nexus of real estate firms, including the Security Capital Group and Verde Realty. One of the nation’s leading real estate investors, Sanders sold Security Capital for $5.4 billion, earning him almost visionary status as the godfather of the modern Real Estate Investment Trust (REIT).

Politically, Sanders and his business associates have boosted O’Rourke’s political career with generous donations, even as the majority of Sanders’ contributions have gone to Republicans - including Cruz, to whom he contributed $10,000 for his first Senate run in 2012.

O’Rourke, meanwhile, stepped back from his family’s business activities since 2013. That was when he came under scrutiny for purchase of stock in several companies just going public, including Twitter. Initial public offerings, as they are known, are generally reserved for heavy-hitters looking for big profits. The House Ethics Committee had recently warned lawmakers to steer clear because of potential violations of the Stop Trading On Congressional Knowledge (STOCK) Act.

O’Rourke said the purchases were made by a financial professional who manages his investments. They were reported on his financial disclosure forms. When reporters discovered them, he reported himself to the Ethics Committee, which directed him to send the profits - $7,136 in all - to the U.S. Treasury by overnight mail.

In a letter to the committee, O’Rourke said he had not directed his broker to make the purchases and that “none of the purchases were made on our behalf because of my position.”

He added that he had “instructed our broker to stop any further transactions.”

He now forswears any involvement in his and his wife’s personal investments: “I honestly couldn’t tell you off the top of my head what we’re invested in.”