The executive looked out the window of his office into San Jacinto Plaza. “How could this be”, he asked himself as he looked at the boarded-up and dilapidated hotels. The Cortez and the Paso Del Norte, once the jewels of downtown El Paso, were slowly crumbling away, as was downtown El Paso. If only he could revive those two hotels, surely the downtown economy will rise from the ashes and bring El Paso up along with it.
“But how”, he asked himself.
He believed in his dream and as such he felt El Pasoans will surely support his efforts.
“But how”, he asked himself once again. El Paso already pays for his last effort to bring El Paso into the future, albeit kicking and screaming but they were paying. It didn’t matter that it wasn’t going according to plan, surely he thought, it’ll just take a little longer and El Paso will be the better for it.
Sure, they don’t see the vision I see, but they will soon embrace it he convinced himself. Carefully and methodically he talked to anyone that would listen. His vision was grandiose but it was good for the city. He was, after all, a well-liked and well-respected executive and thus he convinced the board to go along with his plan.
After spending $75 million, the two hotels were the talk of the town and even the state. The executive was now talking about spending an additional one million to bring in chic boutiques, restaurant and nightclubs. It was just a matter of time before the city would shoot straight to the stratosphere, he told the city’s elite as they bestowed honor upon honor on him.
Meanwhile, the city’s residents were burdened with ever rising and unbearable expenses levied on them by those with the “vision”. To say they were angry was an understatement.
Within three years, the chic downtown hadn’t materialized and the two hotels were losing about a $1 million a month. The loses mounted to $36 million and the executive left his office leaving The El Paso Electric Company on the verge of bankruptcy and the city’s ratepayers paying one of the highest electric rates in the nation.
The ratepayers were angry.
In 1976, Evern Wall was appointed CEO of El Paso Electric. A year later, in 1977, Irvin “Doc” Handling moved his small business, Anasazi, from Albuquerque to El Paso. Handling thought he had a friend in Evern Wall; he was soon to find out how wrong he truly was. Wall’s friend was Bob Jones, currently in federal prison for tax evasion and defrauding the U.S. government of millions of dollars.
In 1983, Maury Kemp, a car dealership tycoon, relinquished his Texas insurance license to the state and set up First Service Life in the Cayman Islands.
In 1984, Irvin Handling converted his small company into a non-profit and established it as the National Center for the Employment of the Disabled, better known as NCED. Later that year, the El Paso Electric purchased $50 million in annuities from Maury Kemp’s insurance company. Both Wall and Kemp knew that the annuities were illegal, according to the court indictments that were soon to be filed, because they were not sold by a Texas licensed company. By 1986, the El Paso Electric Company had purchased $120 million in Kemp “annuities”.
During this time, El Paso Electric was starting to feel the financial stress of the Palo Verde nuclear plant fiasco whose costs had escalated considerably.
In 1986, Franklin Land and Resources, an El Paso Electric subsidiary, spent $75 million revitalizing the Cortez and the Paso Del Norte hotels. According to court documents, some of the money used in this and other electric company subsidiaries flowed via a complicated scheme where the Kemp annuities were invested in the electric company subsidiaries, which then loaned them back to Kemp.
Thus, technically, the money used by the electric company to invest in the two hotels or other investments such as a waterbed maker were not subject to regulatory oversight and therefore the argument was made that it wasn’t the reason electric rates needed to be raised.
By 1989, the two hotels were losing about a million a month. By the time Evern Wall left the electric company, later that year, the losses from the hotel had mounted to over $36 million. The electric company also had millions tied up in the Kemp insurance companies.
Evern Wall told those that would listen that his plan was to grow the economy so that the rate-base would follow. The electric company blamed the ratepayers, through the PUC, for its predicament because they wouldn’t support another rate increase.
In November of 1990, Maury Kemp, Raymond Telles Jr., and another individual were indicted with securities fraud, having to do with insurance annuities.
On June 5, 1991, 29 individuals and 13 co-conspirators were indicted on conspiracy charges for moving monies back and forth between the Kemp insurance companies and the electric company subsidiaries. Maury Kemp and Evern Wall were among those indicted.
In January 1992, the El Paso Electric Company filed for bankruptcy. It owed $500 million to creditors. The City of El Paso was forced to agree to a $25 million rate base increase in order to allow the electric company creditors’ to recoup their losses. Although rates were frozen for 10-years, El Paso electric rate payers pay among the highest rates.
Eventually Evern Wall, Maury Kemp and the others were acquitted by the jury. But Evern Wall wasn’t finished with El Paso just yet.
In 1994, Evern Wall brought in Bob Jones, a failed Houston developer on the run from creditors, to “help” Irvin Handling get NCED out of bankruptcy. Handling was under the impression that Wall was helping him, but in reality Wall was pushing Handling out of NCED and replacing him with Bob Jones.
By 1997, Bob Jones involved NCED in the Javits-Wagner-O’Day Act making chemical suits. Jones had negotiated a very unusual pay structure with Evern Wall that only makes sense if the idea was to conceal income from creditors and the government.
Today, Bob Jones sits in jail, in part, for the pay structure he negotiated with Evern Wall.
In March of 2005, Jones bought the 12-story Mills Building which had housed the El Paso Electric Company. The following month, in April, Bob Jones, with much fanfare buys the Blue Flame building, which formerly housed the headquarters of EPISD.
Jones had been talking about a downtown renaissance with the local elite salivating at his grand “vision”.
Just as Evern Wall was held in high-esteem by the business community for his “vision” so was Bob Jones. In October of 2005, the El Paso Chamber of Commerce awarded Bob Jones the Entrepreneur of the Year Award.
And just like with Evern Wall, Bob Jones was soon out of a job with indictments soon to follow. He quickly sold his buildings.
By 2008, Raymond R. Telles pleaded guilty in another related case involving the Socorro School District. Bob Jones soon followed and is currently in jail.
Two characters with “visions” of a vibrant downtown both used the hard-earned money of the tax paying community to hobnob at the county clubs with the business community back-slapping each other for their “vision” of a vibrant downtown that would surely raise El Paso’s quality of life, if only others could see the same “vision”.
Oh wait; in 2013 the “vision” is once again thrust upon El Paso; this time under the tutelage of two other visionaries; Paul Foster and Woody Hunt. Again, taxpayers are being asked to foot the bills for a downtown revitalization through the new baseball arena.
As before, the business community falls over itself proclaiming how lucky we are to have such “visionaries” in our midst.