The FBI’s investigation of corruption in El Paso isn’t just another crime story. It’s the latest chapter in the frustrating saga of a city cheated of its destiny.
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El Paso is a city that believes in its soul that it has been cheated of its destiny. You can’t talk to political or community leaders for very long without hearing that in 1950 El Paso had a larger population than Phoenix (130,485 to 106,818). Or that El Paso would be better off if it were part of New Mexico, a state in which it would be the dominant city. (And so it might have been but for the Compromise of 1850, in which Texas ceded its claim to Santa Fe, but not to El Paso, in return for $10 million from the federal treasury to pay off the state’s debts.) Or that the city is closer to Los Angeles than it is to Texas’s eastern border. There is a palpable feeling of isolation here, of a city being left to fend for itself. That sense is amplified by the intrusion into the heart of the city of the Franklin Mountains, so that El Paso is bisected into east and west sides, neither of which can be seen from the other. At night, from the heights above downtown, the impression is one of a third-world capital, where the rich look down on the poor below, in the Segundo Barrio and across the border into the maelstrom of Mexico.
The peculiarities of geography help define the civic character. In 1994 state district judge Edward Marquez invoked a little-known provision of the state judicial code to call a court of criminal inquiry into whether the state government was shortchanging El Paso in the manner in which it distributed funds to local communities. For example, El Paso had no state-financed center for mentally disturbed children, while Houston, Dallas, and San Antonio did. The nearest such center was more than three hundred miles away, in Big Spring. Meanwhile, El Paso was receiving as little as $16 per capita for mental health funds, less than one sixth of what the best-funded cities received. Such revelations led David Crowder, then the editorial page editor of the El Paso Times, to write, “The acute, under-the-skin awareness of being part of the Lone Star State is not something that El Paso lost somewhere along the line; it is a sense that El Paso never had.”
I went to El Paso recently to write about the corruption that reaches into every area of local government, not to muse on the city’s alienation from the vast territory that lies to the east. But I realized that the two are related, that there is a sense here that no one is watching, so why not line your pockets? This attitude is accompanied by another: that El Paso has missed out on the prosperity enjoyed not only by other Texas cities but also by Phoenix and Albuquerque, so why not indulge in some easy money if the opportunity presents itself? Which it always does to those willing to look for it.
Troubles of this magnitude seldom occur by chance. They are related to the condition of the city, and I believe this to be the case in El Paso—or else I would not have gone there. Outside El Paso, the corruption is of little importance; it’s just another crime story. In context, however, I think it reflects a failure of self-confidence within the community. People do not foul their own nests in good times. But El Paso has not seen enough good times lately. As is the case in much of old-industry America, the city has suffered a steady exodus of manufacturing jobs, most of which were in low-wage industries to begin with, such as textiles, apparel, and leather goods. Farah and Levi Strauss and Tony Lama once employed tens of thousands of workers here, but between 1990 and 2006, according to the Federal Reserve Bank of Dallas, the number of manufacturing jobs declined, from 41,100 to 22,100. Services account for 82.9 percent of employment today. The result is that El Paso’s per capita income stood at just 67 percent of the U.S. average in 2005, while Texas as a whole was at 94 percent. In such circumstances, government is the most dependable and best-endowed employer, and ambitious people are drawn to it for reasons noble and ignoble.
The scandal involves the latter motivation: the bribing of elected officials in order to obtain vendor contracts, which has resulted in a widely publicized federal investigation. This is nothing new in El Paso; county commissioner Dan Haggerty, the lone Republican on the commissioners’ court and the brother of state representative Pat Haggerty, remembers that when he ran successfully for the board of the El Paso Community College eighteen years ago, the discussion didn’t focus on how to make the college better. It was all about vendor contracts—the telephone contract, the furniture contract. “I knew something was up,” he told me. His suspicions were confirmed when a man representing a vendor came up to him and said, “If you vote for this, you’ll get two thousand in cash.” Later, when Haggerty won his seat on the commissioners’ court, the retiring commissioner told him, “You’re a nice guy. They’re corrupt. They’ll destroy you.” During the past three to four years, Haggerty told me, he has met with FBI agents at a local Denny’s at least seven times. Is he confident that the corruption is going to be cleaned up? “Yeah, right,” he said. “I’ve been hearing this for fifteen years, and they haven’t done crap.”
The first indication that the FBI was investigating corruption in El Paso came in May 2006. Federal agents swept into a local company, the nonprofit National Center for Employment of the Disabled (NCED), where four thousand severely disabled workers were said to be employed in manufacturing chemical warfare suits. Yet less than 10 percent of the NCED’s workforce was disabled, notwithstanding federal requirements that 75 percent of the labor had to be performed by disabled workers. The rest were ringers. CEO Robert Jones resigned, just a few months after being named El Paso’s entrepreneur of the year by the local chamber of commerce. The metaphor for a city whose hopes always seem to be dashed is too apparent.
About a year later, in May 2007, Haggerty finished his regular Tuesday morning get-together with constituents in the coffee shop in the basement of the courthouse and headed upstairs to his office. An FBI agent met him at the door. He was allowed to go inside but other commissioners were not; Haggerty saw a colleague, Miguel Terán, get patted down and forced to empty his pockets. Soon the space occupied by commissioners’ offices was crawling with agents hauling away boxes of papers and hard drives.
Within a few weeks, the U.S. attorney’s office filed criminal charges against John Travis Ketner, an attorney and the chief of staff to county judge Anthony Cobos, for conspiracy to commit mail fraud and deprivation of honest services fraud and conspiracy to commit bribery concerning programs receiving federal funds. The filing identified seventeen co-conspirators with cryptic names (“JohnCC-1”) and brief descriptions (“an attorney licensed in the state of Texas and a solo practitioner with a small law office who was active in assisting individuals in campaigns for local elected office”), but locals in the know had no trouble breaking the code. The indictment alleged that Ketner was advised by Cobos “that his primary job responsibility would be to find opportunities in which [various JohnCCs] could receive compensation from vendors seeking contracts with the county. . . . The co-conspirators would then facilitate the solicitation of bribes from the selected vendor and the offering of bribes to the elected officials; and would seek to discredit vendors who failed to cooperate with the corrupt scheme or who were competitors of vendors who agreed to the corrupt scheme.” Or, as the El Paso Times put it, citing court documents, “Ketner claimed it was his job to get bribes from companies seeking work with the county.”
Space does not permit an explanation of the full details of the conspiracy. Suffice it to say that no level of government was immune. Ketner pleaded guilty soon after the indictment was handed down. Former county commissioner Betti Flores admitted to taking a cash bribe of more than $10,000. Two investment bankers with the Dallas office of Bear Stearns, including its managing director, pleaded guilty to a bribery grand slam that covered the city council, the commissioners’ court, the school district, and the community college, involving some $1.5 billion to $2 billion worth of bond deals. The El Paso Independent School District severed ties with a number of vendors, among them lawyer Luther Jones—a former state legislator and county judge who managed the Medicare/Medicaid reimbursement program for the district and who has earned a reputation as a political kingmaker—leading to widespread speculation in town about his possible role in the scandal. The FBI is mum, except for a single statement: “The FBI has not specifically identified any subjects of the investigation as targets, nor have we specifically cleared anyone as targets of this investigation.”
Corruption is a betrayal of civic virtue, and this particular scandal could not have come at a worse moment for El Paso. For the first time since the old industries began shutting down, the city’s economic prospects are on the rise. Fort Bliss is booming, with billions of dollars in new construction under way and thousands of troops scheduled to relocate there, along with their dependents. The Texas Tech medical school, which was recently accredited, will begin admitting four-year students next year, and the hope is that it will become a national leader in diseases that are disproportionately suffered by Hispanics, such as diabetes. The school will attract medical professionals and raise the quality of health care; it may also attract health-related industries with jobs that pay more than the current norm. The University of Texas at El Paso is rapidly growing as well.
Perhaps these developments will jolt El Paso’s somnambulant business community, whose leaders have been generous with their philanthropy but largely indifferent to improving the lot of the minority population here. They have shown little interest in encouraging and embracing future leaders, as their counterparts in Houston, Dallas, and San Antonio have been doing since the eighties.
For the moment, however, El Paso’s future rests with the FBI. Having started the crackdown on corruption, it must see things through to the end or else there will be anarchy and the longed-for boom will not occur. No one is going to pour energy and effort and dollars into a city with a crooked government. It’s finally time to be part of Texas after all.