Tony Sanchez's New Deal
The multimillionaire oilman and banker from Laredo has never held elective office, is personally pro-life, and has been one of George W. Bush's biggest financial backers—none of which pegs him as the ideal Democratic candidate for governor. So why does the party see him as its savior?
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Sanchez and I never discussed what he wanted me to take away from the reading. He deflected the question when I asked and instead talked about his love of books and his admiration for Harry Truman. My heritage runs to Scots and Irish who migrated to Virginia, the Deep South, and on to Texas—a well-worn trail. I've explored and read and written about the Rio Grande frontera and Mexico, and I've learned a fair amount of Spanish. But by the end of the reading, I had discovered many things about the Hispanic path to Texas I never knew. I didn't know that San Antonio was founded by Canary Islanders. I learned about compañías volantes, "flying squadrons" of vaqueros who protected South Texas' sparse settlements against the Apache and the Comanche and were the forerunners of the Texas Rangers. I learned more about the methods Texans used to drive Tejano landholders off to Mexico. I learned about the wild politics of Laredo. One dispute between the Guaraches (Sandals) and Botas (Boots) culminated in a gunfight over an 1886 election that killed more than fifteen men. Tradition has it that five thousand rounds sang across picturesque San Agustín Plaza, which occupies a bluff above the Rio Grande. To outsiders, the Sandals and the Boots were inscrutable factions of the Democratic party.
I also learned a great deal about the Texas legacy of Tony Sanchez. His personal wealth, which has been estimated at $600 million, not only enables him to make the leap from political novice to nominee and leader of the party but also invites him to put on the cloak of a storied Hispanic aristocracy in Texas. Sanchez's Texas lineage is impeccable. If the books he asked me to read taught me anything, they showed that the idea of being governor comes as naturally to him as it might a person named Adams or Kennedy in Massachusetts. In a way, the candidate is trying to reclaim his birthright.
Sanchez does not discount the cruelty of the Spanish Inquisition. In about 1690, from a small town near Gibraltar, his forebears struck out for the New World to escape religious oppression. But they found the Inquisition even harsher in the vicinity of Mexico City, and so they kept pushing as far away from the capital as they could—to a remote, rough wilderness at the edge of occupied Spanish dominion. The candidate is seven generations removed from a rancher and soldier named Don Tomás Sánchez. According to Jerry Thompson, he had blond hair and blue eyes and possessed a reputation for being "fond of his toddy and the ladies." Tomás petitioned the Spaniards for a grant of fifteen leagues of land along the north bank of the Rio Grande, and in 1755, on what became San Agustín Plaza, he founded Laredo. Sanchez's ancestor was Laredo's first patrón.
By the time Sanchez was born, in 1943, his family's share of that wealth and property had dissipated, but not their zest for politics and power. His dad, Antonio Sanchez, Sr., told boyhood stories about running after trains during the Depression to scoop up coal embers and take them to the stove that warmed his house. He later owned an office-supply shop in downtown Laredo. Like almost everyone in Laredo, Tony Senior was a Democrat. He never ran for office himself, but he was deeply involved in politics. He emceed the pachangas, where people consumed beer and barbecue and assessed the candidates of the day. The first thing state senator Judith Zaffirini remembers seeing on television was a speech by Tony Senior. The firstborn son always seemed overmatched by the charisma of the old man. In another time, the father might have been the one to run for governor.
Tony Junior describes his childhood in Laredo with great nostalgia. Two of his grandparents lived across the border in Nuevo Laredo. "My friends and I would walk barefooted to town and to the river, and we'd fish," Sanchez told me. "If you had an aunt or a good family friend along the way, you'd stop and knock on the door, and the tías would bring you lemonade."
Never a spectacular student, Sanchez graduated from high school in 1961 and went on to college and law school at St. Mary's University in San Antonio. He moved to Austin and worked for Texas' lieutenant governor, Ben Barnes, who ran for governor in 1972. Barnes' small campaign staff included a writer, Richard West, who later became one of the brightest founding talents of this magazine. "Tony was as light as a two-dollar Chablis," says West. "Endlessly amiable and had not a hint of political philosophy. Nor did any of us—we just wanted to get Benny Frank elected. While I wrote press releases and seldom-delivered speeches, Tony's job was to backslap and habla español with the rare Hispanic Daddy Warbucks. Ditto the South Texas jefes. And he was good at it." Lyndon Johnson had proclaimed Barnes a future president, but the lieutenant governor was tarred by scandal and destroyed by Dolph Briscoe and Sissy Farenthold in the Democratic primary. Today the tables are turned; now Barnes is one of Sanchez's key supporters.
Sanchez got over the disappointment of Barnes's loss quickly. He moved to San Antonio to practice law and returned home to Laredo on the weekends. Along with the office-supply business, Tony Senior speculated on oil-and-gas leases as a landman. The younger Sanchez had been telling him that they had to keep a share of production to make any real money. One night in 1971, while driving the River Road outside Laredo, the old man kept gazing across the border at the lights of a successful Pemex rig on the highway to Monterrey. Then two gas wells came in just north of the Rio Grande. Sanchez, his dad, O'Brien, and two other partners financed a discovery well in Webb County and leased a checkerboard of surrounding properties. For the border country, the importance of their discoveries was immense. The Sanchez-O'Brien field made a lot of South Texans rich, and in the case of some old ranching families, richer. For the Sanchezes, the success of the energy company enabled them to found a bank holding company, International Bancshares Corporation, that would ultimately have more than one hundred banks or branches throughout Texas. Among his other duties, the younger Sanchez became the chairman of the board of Tesoro Savings and Loan.
Despite the Sanchezes' family history, the Laredo aristocracy and ruling cliques viewed them as nouveaux riches, even outsiders. The cool reception did not go over well. They became indomitable foes of Laredo's patrón, longtime mayor J. C. "Pepe" Martin, who later went to jail for corruption. After Sanchez moved back to Laredo, he and his father fought Martin's regime by supporting local candidates and financing construction and businesses whose owners and contractors resisted Martin's political machine. The Sanchezes even battled the establishment by founding a newspaper, the Laredo News, to compete with the Laredo Times, which had been around since the feud of the Guaraches and Botas. Laredo is 94 percent Hispanic, and in those years of peso devaluations in Mexico, the town was an impoverished backwater. But starting in 1977, it had a lively nine-year newspaper war. Finally the Sanchezes had to sell the News to stop losing money. Employees were told to clean out their desks at ten in the morning on Christmas Eve, 1986.
The old man did not take kindly to scrutiny or criticism. In 1981 he filed an unsuccessful $60 million invasion-of-privacy suit against the Times for using Small Business Administration records to estimate his private worth at $50 million. If speculation about his wealth enraged him, imagine his wrath when he later sued the Times—again, unsuccessfully—for libel after a headline tied his family to drug trafficking. The story focused on the dealings of Tesoro Savings and Loan. Tesoro ("treasure" in Spanish) had gained a reputation as one of the freewheeling Texas thrifts, and it failed when the economy went bust. The younger Sanchez kept putting his own money into Tesoro, trying to make good on its obligations, but he admits he was unaware that two brokers allegedly laundered almost $25 million in drug proceeds through the savings and loan. The men reportedly had ties to a Guadalajara drug lord who would later be implicated in the infamous kidnapping, torture, and murder of U.S. narcotics agent Enrique Camarena Salazar. In 1984, one day before the IRS tried to freeze the accounts, another person purchased $1.7 million in money orders from the funds. After the freeze was instated, Tesoro officers allowed the money orders to be cashed in and wired to Panama.
Since law school, Tony Sanchez had been friends with Tony Canales, whose own family history is honored by a plaque and a museum on San Agustín Plaza. (In 1840, after Mexico had lost Texas but still claimed the border was the Nueces River, Antonio Canales led an insurrection against the Mexican government and inspired, for 283 days, a Republic of the Rio Grande that included Laredo.) Canales served as Tesoro's lawyer and advised Sanchez that the savings and loan could not keep the money from being wired to Panama. Tesoro eventually went under from the weight of all its bad loans, and among their critics, the Sanchezes' name and reputation would forever be maligned.
Still, Canales' legal advice had been sound. In 1988 a federal district judge ruled that the bank had done nothing improper, and the charges against the two Mexican men were later dropped. But Tesoro has proven to be a nasty thorn for Sanchez. In August of this year, a few weeks before the announcement of his candidacy, the Dallas Morning News' George Kuempel and Pete Slover pieced the Tesoro story together again, and Sanchez, who had been saying nothing on the record to reporters, was forced to defend himself. Rick Perry just allowed that it was mighty interesting.
Sanchez is contemptuous of the renewed insinuation. "Voters today are pretty sophisticated," Sanchez told me. "They know this stuff doesn't just magically appear from some third party. Rick Perry has a history of extremely partisan smear tactics. We're ready for him. I have no illusions that it's going to be nice." Sanchez's supporters point out that the depositors, not Tesoro, were investigated and that the IRS, the DEA, and Ronald Reagan's Justice Department determined that the thrift had done nothing wrong. The candidate is being defamed, their argument goes, because his name is Hispanic and his banking enterprise is on the Texas-Mexico border. Nothing else required: Racism supplies the rest. But for Sanchez, scrutiny comes with the territory now. Reporters and opposition researchers are going to be looking at every investment, deal, and loan he has ever made. Fairly or unfairly, he's going to be hounded by the dread words "drug money."
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