El Paso Mayor Dee Margo presides over a weekly council meeting. (Photo: RUBEN R. RAMIREZ/EL PASO TIMES)

Shares in various companies — including a realty trust focused on Downtown El Paso — appeared to be missing from Mayor Dee Margo’s personal financial statements filed with the state, and the Texas Ethics Commission says that oversight would be a violation of state law.

Margo, however, denied the claim, and said he had disclosed his holdings in the trust with the state commission.

Texas Gov. Greg Abbott appointed Margo to the Cancer Prevention and Research Institute of Texas oversight committee in 2015. His term expires Jan. 31, 2021.

As a member of a state committee, Margo is required to file a comprehensive disclosure of his ownership, benefits and investments in companies, said Ian Steusloff, interim executive director of the Texas Ethics Commission, which enforces the state requirement.

Steusloff said a resident of the state can file a complaint if the information is not disclosed, and the commission can assess fines up to $500.

In a separate action, a complaint was filed Tuesday with the city ethics commission alleging that Margo's holdings in the real estate investment trust, or REIT, could benefit him financially because of his position as mayor.

Margo has not disclosed how many shares he has in the Borderplex Realty Trust, which owns the Wells Fargo Tower and the former Chase Tower (now called One San Jacinto Plaza), according to personal financial statements obtained by the El Paso Times through the Texas Public Information Act.

He issued a statement Wednesday night, however, saying, “My investment in Borderplex REIT was disclosed on my financial statements filed with the Texas Ethics Commission."

"I have not taken any action to promote or support a property within the trust," he said in the statement. "In September the Borderplex REIT will be dissolved and I will no longer hold an investment in those properties.  For over 40 years, I have supported this community, and I will continue to do so as Mayor of El Paso.”

The mayor reported having ownership in the Borderplex Realty Trust in two city Annual Financial Disclosure Statements, which don't ask for shares or income generated from the trust.

The mayor also did not appear to report his ownership, gains or losses from shares of stock in 38 companies that he listed in a personal financial statement for his first year in office, in 2017.

Stuart Blaugrund, an employment law attorney who is from El Paso but who now lives in Dallas, said Margo’s ownership in the trust and failure to disclose it violates city policy, in addition to state law.

Blaugrund on Tuesday filed an ethics complaint against Margo with the city, alleging that Margo has used his position as mayor to push for the demolition of the Duranguito neighborhood to build a Downtown arena. The arena, Blaugrund said, would improve the value of properties that Margo has an indirect ownership stake in as an investor in the realty trust.

"This revelation that he continues to own shares in a for-profit business that was specifically formed to acquire and redevelop Downtown properties is outrageous," he said.

City officers and employees cannot "use their official positions improperly to secure unwarranted privileges or exemptions for themselves, relatives, or others generally," according to a city ordinance.

Rafael Adame, the former chairman of the city’s Ethics Review Commission, said City Attorney Karla Nieman will determine whether the complaint was filed correctly and whether it falls within the purview of the ethics commission. The processes must be completed within 45 days and 60 days, he added.

If it is against a member of the City Council or the city manager, “she has to hire outside counsel and recuse herself from the process,” Adame said.

Margo’s personal financial statements for his first year in office do not report whether he had ownership or profits from the trust. But his filing for last year shows he received income, interest, dividends, royalties and rents in amounts between $5,000 and $9,999.

When Margo served in the Texas House of Representatives, he reported having up to 10,000 or more shares in the trust in 2010 and 2011, when it was called the Borderplex Community Trust. He did not report gains or losses from his ownership in the trust in those filings either.

Steusloff said members of state committees like the Cancer Prevention and Research Institute are required to disclose which stocks an individual has and whether they’ve made gains or losses.

Steusloff said ownership in a trust like the real estate trust would need to be disclosed in a financial statement. Any profits or losses would also need to be disclosed, he added.

“They have to report the number of shares that are held by the filer during the course of the year,” he said.  

Borderplex Realty Trust's portfolio

The Borderplex Realty Trust’s Downtown portfolio has remained a mystery, but a lawsuit between the trust’s holders and New Mexico entrepreneur Dan Burrell opened up some of the trust’s finances in 2016.

Made up of 200 shareholders, the trust’s largest assets are the Wells Fargo building, the former Chase Tower, 13 retail properties, a parking lot at the intersection of Mesa and Main streets and a lot at the intersection of Mesa and Mills Ave.

In September 2015, the trust had assets of $82.4 million, including $65 million worth of real estate holdings, according to a stock offering memo. Most revenues, totaling $9.5 million in 2014, which was the last full year reported in the memo, came from rents from the office towers. 

Last year, the council approved incentives to two Silicon Valley-based companies that expanded their companies into the tower. Curacubby and Fivestars were granted the incentives with agreements that included minimum personal property investments to equip, furnish and add fixtures for improvements.

The mayor was present for news conferences and City Council approved incentives to the two companies to move into the Chase Tower, but Margo did not participate in that vote.

Curacubby was required to invest $51,000 and Fivestars was required to invest $75,000 in their offices within the building.

Blaugrund​​​​​​ points to Margo’s personal financial statements filed with the city that show the mayor has shares of a publicly traded stock with Hunt Cos.' Hunt Companies Finance Trust Inc.

A rendering of the WestStar Tower at Hunt Plaza to be built in Downtown El Paso. (Photo: COURTESTY OF HUNT COS.)

Blaugrund said the mayor has spoken openly in support of the WestStar Tower that was also given incentives last June, which creates the appearance of using the office for private gain. 

Hunt Cos. and WestStar Bank, which are partnering to construct the $85 million high-rise.

The city and El Paso County have agreed to provide up to $21.73 million in tax subsidies, tax abatements and cash payments over 20 years as incentives for Hunt and WestStar to construct the office building.

A company owned by El Paso billionaire Paul Foster has a pending contract to buy the 18-story former Chase Tower and the 21-story Wells Fargo building, as well as the buildings' parking garages, from the Borderplex Realty Trust.

Blaugrund said the mayor discussed with developer and Hunt Cos. owner Woody Hunt the negotiations on the proposed $180 million multipurpose performing arts and entertainment center, also known as the Downtown arena, with historic preservationist Max Grossman and retired Houston oilman J.P. Bryan. 

In an email from Hunt to Margo and Bryan on March 11, 2018, Hunt invited the sides to meet to negotiate on the arena plan, which has been mired in a legal battle waged by Grossman and Bryan in an effort to preserve the Duranguito neighborhood, which is the site of the proposed arena project.

For three months after the exchange, Hunt was copied onto emails between Margo and Bryan discussing a possible settlement over the arena, according to messages reviewed by the El Paso Times.

The mayor later admitted that he used personal email to discuss the arena and city business, which is against a 2013 city resolution that discourages the practice. 

It follows his prior use of personal email to conduct public business, which is a violation of Texas law, Blaugrand added. 

A city ordinance says city officers or employees cannot "give reasonable basis by their conduct for the impression that any person can improperly influence, or unduly enjoy their favor in, the performance of their official duties, or that they are unduly affected by the kinship, rank, position or influence of any person." 

“I have watched with increasing alarm the mayor's disregard for transparency, accountability and respect for open government,” Blaugrund said. "The mayor's conduct erodes confidence in local government."