Russ Vandenberg joins the list of other El Paso business notables who have been accused of criminal wrongdoing years after the evidence was evident but ignored. Individuals like Bob Jones and Chris Balisger, who were often touted as pillars of El Paso’s business community, end up serving jail time for fraud that was there but often ignored. Balsiger still has the support of many, including Texas governor aspirant Beto O’Rourke. O’Rourke wrote the sentencing judge asking him to be lenient with Balisger because Balisger had been “generous” to O’Rourke by mentoring him on how to do business. The latest El Paso businessman accused of criminal fraud is Russ Vandenburg. The United States Department of Justice for the Western District of El Paso issued a press release on July 27, 2022, reporting that a federal grand jury in El Paso indicted Russell Allen Vandenburg and Scott Anthony Stuart of fraud.
According to the criminal indictment, Vandenburg along with Stuart defrauded their business partners between February 2015 and October 2017. The fraud perpetuated by Vandenburg, according to the federal indictment, was using funds illegally to benefit Vandenburg personally. Although the indictment is the first time that Vandenburg is criminally accused, there have been several other accusations over the years that suggest Vandenburg acted unethically or even illegally in his business practices for decades, but the El Paso business and political community ignored the obvious problems with Vandenburg’s business practices because it benefited them to do so. Like Balsiger and Jones before him, Vandenburg’s business practices are ignored by the community’s elite because to question them can derail important public policy agendas.
The El Paso Times and KFOX News reported on the news of the Vandenberg indictment but added little original reporting, other than quoting the Department of Justice’s press release. Neither news source provided the necessary context required to understand how the indictment of Vandenburg is not only a continuation of decades of questions about his business activities, but of how Vandenberg was instrumental in the downtown revitalization program that continues to be controversial public policy in the city today. The notable absence of reporting from Bob Moore’s El Paso Matters, who as of July 30, has not reported on Vandenberg’s indictment should be noted by readers. This is notable because El Paso Matters has been trying to position itself as the publication of record for El Paso by ignoring certain public policy issues that that threatens its funding sources. This is not the first time that Bob Moore protects a businessman in El Paso when there is a political agenda behind the scenes. Moore led the El Paso Times during the years that Jones perpetuated his scheme and while the city purchased its current city hall building from the El Paso Times.
Vandenberg is a 1970 UTEP graduate. He, and his brother formed TVO North America in 1983. TVO has several affiliated companies. [1] According to the Texas Comptroller of Public Accounts, as of July 30, TVO Groupe LLC has forfeited its Texas franchise for failure to file required documents. Although the company maintains an active website (https://www.tvogroupe.com/), its telephone number listed for its corporate headquarters in Chicago is not in service. According to the company’s website it also maintains an office in the Czech Republic. Attempts to reach the Czech offices via email were unsuccessful.
In 2002, UTEP named Vandenberg as one of five Distinguished Alumni for 2002. [2] Vandenburg was held by many as a pillar of El Paso’s elite because of his involvement in UTEP’s sports community, and subsequently downtown redevelopment. To challenge Vandenburg publicly threatened to derail one of the few unifying activities in El Paso – UTEP sports. But UTEP sports, itself has been mired in unethical controversies over the years and many times Vandenburg was in the midst of them.
The Pay-To-Play UTEP Scandal
In the 1990’s the UTEP basketball team was investigated by the NCAA over allegations that UTEP basketball players were being paid to play for UTEP in violation of NCAA rules. Several UTEP players from the 1980’s alleged that they were provided free food and other incentives while at UTEP. [3] Russ, who is the brother of former UTEP track coach Wayne Vandenberg, was implicated in the allegations by the ballplayers. [4]
In 1991, UTEP was placed on three years probation, including cuts in scholarships for the 1992-1994 sports seasons. UTEP was sanctioned for infractions involving the recruitment of a player and for providing athletes the use of automobiles in violation of NCAA rules. [5]
But the 1991 sport troubles for UTEP were just one of several. In 1986, the UTEP’s men and women’s track teams were put on probation and forfeited its 1983 cross country championship over several NCAA violations, including a slush fund allegation against the track and field coach. Between 1991 and 1996, several UTEP athletes were declared ineligible for school credit violations. [6] In 1997, when UTEP was again being scrutinized by the NCAA for violations, Russ Vandenberg, then-representing the Miner Foundation, told the newspaper that “everyone’s against UTEP,” to minimize the sports controversies against the university. He had the support of then UTEP president, Diana Natalicio. [7]
But the UTEP controversy was just the beginning. Several conversations between business owners in El Paso suggested that Russ Vandenburg’s business practices were unethical with one business owner stating, “stay away from Russ” when discussing doing business in El Paso. [8] Openly discussing Vandenberg’s business practices were not happening, but the business community was whispering about Vandenburg’s businesses. One of the reasons for the secrecy was political necessity.
Downtown Redevelopment
Vandenburg was immune to public scrutiny because of UTEP sports and politics. The downtown redevelopment controversies to revitalize downtown through the gentrification of the Segundo Barrio neighborhood to make way for redevelopment is one example. It is not a coincidence that Beto O’Rourke’s political rise came about by the attacks perpetuated on the Duranguito community for downtown redevelopment as O’Rourke’s father-in-law, Bill Sanders, was the driving force behind the gentrification of the poor Latino community in South El Paso. To fulfill the dream of gentrifying the poor out of El Paso’s downtown required political power and a messaging platform explaining that downtown redevelopment is the key to El Paso’s success.
One of the ways the architects of downtown redevelopment intended to prove their redevelopment plan was good for El Paso was using prominent business leaders to tout downtown redevelopment as the future by moving their operations into the area while arguing that bringing their businesses and jobs to downtown El Paso was only possible because of the downtown revitalization program.
Two of the first prominent business owners to tout downtown redevelopment by promising to move their operations to downtown because of the redevelopment efforts were Bob Jones, who pleaded guilty to massive fraud, and Russ Vandenburg currently indicted on fraud charges.
In September 2004, TVO North America and its sister company, EPT Management which then owned 65 apartment complexes across the country, moved their offices from the eastside of town into the 16th floor of the Wells Fargo Building “to be part of the redevelopment of Downtown,” said Russ Vandenburg at the time. [9] Vandenburg’s move followed closely behind Access Administrators announcement of moving into Bob Jones’ Blue Flame building. [10] Jones, who was also an official of Access Administrators, was later arrested in 2008 and pleaded guilty to several federal fraud charges for various fraudulent businesses he operated out of El Paso.
How Vandenburg Was Instrumental To The PDNG Gentrification Plan
While Vandenburg was touting downtown redevelopment another thing was quietly happening at UTEP. Downtown redevelopment and Vandenburg’s new business venture seemed unrelated at first, but they soon dovetailed together. In November 2004, the UT Board of Regents met to discuss approving building the 153-room Hilton Garden Inn hotel on the UTEP campus. [11]
Woody Hunt, one of the so-called members of the El Paso oligarchy [12], was appointed to the UT Board of Regents in 1999 and served until 2005. [13] In addition to being a member of the UT Regents voting on putting a hotel on UTEP property, Hunt was also a founding-member of the Paso del Norte Group (PDNG). The PDNG was a group of prominent El Paso businessmen who are behind the scheme to revitalize downtown El Paso at the expense of the poor Mexican community that was targeted for destruction to make way for the downtown plan. The PDNG promoted the destruction of a vibrant Hispanic community through a racist plan called the Glass Beach Study.
As we reported in 2013, Russ Vandenberg was also a member of the PDNG. In addition to the problems that surfaced over the hotel at UTEP, several other controversies erupted around Vandenberg related to his business practices and his support of the downtown revitalization project.
The Hilton Garden Inn became controversial in 2007 when several sub-contractors accused Vandenburg of not paying them for their work. This was just one of many other allegations of wrongdoing. During the controversy over Woody Hunt’s Chihuahua’s ballpark, the city council demolished its city hall in 2013 to make way for the Chihuahua’s stadium, it was Vandenberg who selected the three buildings that the city hall staff moved into after vacating the soon to be demolished building. The ballpark was the first major public works behind the PDNG’s plan to eradicate the Duranguito community for economic development.
Soon after providing consulting services to Joyce Wilson on where to move the city staff into, the city gave Vandenburg’s company a lucrative contract to identify city-owned properties to sell. In 2013, Oscar Leeser, canceled the contract to Vandenburg’s company over the objections of then-city manager Joyce Wilson.
Also, in 2013, Vandenburg was again in the news when his company was sued by GECU over Vandenburg’s 2009 Cliff Inn project. When Vandenburg was announcing the 2009 Cliff Inn project he was also working on the Magoffin Park Villas project. The $8.1 million development was a partnership between Centro de Salud Familiar La Fe and Vandenburg’s company, TVO. City representatives needed to approve the project because of the heavy community opposition to the project. Then city representative Beto O’Rourke abstained from the vote because his wife worked at La Fe at the time.
Two years later was criticized for his handling of his city contract to help relocate city staff to make way for demolishing the building. Soon after, then city representative Courtney Niland criticized Vandenburg’s handling of the city’s purchasing of the El Paso Times building, which Vandenburg was paid about $490,000 in commissions by the city by stating that Vandenburg’s handling of the work “was not done very well.” In 2012, Citibank filed a breach of contract lawsuit against Russ Vandenburg. The judge on the case ruled against Vandenburg because he failed to appear in court. In addition to the business lawsuits, Vandenburg’s wife filed a restraining order against him in 2013 prohibiting Vandenburg from “destroying,” “tampering” or “falsifying” any records.
Another lawsuit was filed in 2017 accusing Vandenburg of fraud. In the 2017 lawsuit, Carlos Martinez Ortega accused Vandenburg of the theft of $3 million. Ortega accused Vandenburg of misappropriating a $2.8 million loan in 2015 and 2016 for a project in Alabama and for not paying Ortega management fees owed to him for the Hilton Garden Inn project. [14] In 2021, an employee of the Hilton Garden Inn was accused by 24 women of secretly recording them using the hotel bathroom. [15]
Vandenburg stepped down from his company, TVO, in October 2017 citing health reasons. [16] On July 27, 2022, he was indicted in criminal fraud charges for his business activities in 2016 and 2017.
The latest criminal indictment of an El Paso businessman working for downtown redevelopment follows a pattern of businessmen who have supported downtown redevelopment for reasons other than good public policy.
Martín Paredes became a partner of Politico Campaigns, a political campaign management firm, in June 2022. The views and opinion expressed in our publication are those of Paredes and do not necessarily represent the views of the firm or its other partners. El Paso News is funded primarily by Paredes, in part by donations from readers and online advertisement. Politico Campaigns plays no role in our reporting. El Paso News has an open editorial policy encouraging any author to submit any article from any point of view for consideration to be published on El Paso News.
Footnotes:
- Vic Kolenc, “Russ Vandenburg leaves CEO position at TVO North America for health reasons,” El Paso Times, December 10, 2017.
- Erica Molina, “School tribute: UTEP to honor not 1 but 5 ‘Distinguished Alumni’,” El Paso Times, October 2, 2002, 3B.
- Margaret Gallardo, “Most Miners had a host family,” El Paso Herald Post, September 6, 1990, D-1.
- Gallardo, “Most Miners had a host family,” D-3
- Danny Robbins, “UTEP Penalized for Staggers Recruitment: College basketball: Miners get three years of NCAA probation for violations in dealing with former Crenshaw star, and other infractions,” Los Angeles Times, October 30, 1991.
- Bill Knight, “Troubles mount in last decade,” El Paso Times, May 2, 1997, 1C.
- Bill Knight, “Punishment makes school fighting mad,” El Paso Times, May 2, 1997, 4C
- Unnamed business owner private discussion with author discussing how to do business in El Paso circa 1998.
- Vic Kolenc, “Downtown Spark,” El Paso Times, November 14, 2004, 1E.
- Kolenc, “Downtown Spark,” 2E.
- Darren Meritz, “153-room Hilton Hotel may be built next to UTEP,” El Paso Times, November 5, 2004, B-1.
- Carmen E. Rodríguez, Kathleen Staudt, Oscar J. Martínez and Rosemary Neill, Who Rules El Paso (Community First Coalition, 2020).
- The University of Texas System Former Regents Website List, accessed July 20, 2002, https://www.utsystem.edu/board-of-regents/former-regents.
- Vic Kolenc, “Lawsuit accuses Vandenburgs, TVO of stealing more than $3M from El Paso investor,” El Paso Times, December 12, 2017.
- Aaron Martinez and Daniel Borunda, “Man accused of recording women in hotel restroom gets PR bond,” El Paso Times, August 20, 2021, 3A.
- Kolenc, “Lawsuit accuses Vandenburgs.”
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