According to a review of the State Bar of Texas, which licenses attorneys in Texas, Jack Teague Chapman, a long time Kemp Smith partner has been suspended by the Bar. The Bar’s online records show that Chapman “is ineligible” to practice law in Texas. According to the Bar’s June 25, 2025 list of ineligible attorneys, Chapman was suspended for “failure to comply with MCLE requirement.”
There are 194 El Paso attorneys on the ineligible list with sanctions ranging from failure to pay dues, not completing continuing education requirements to disciplinary sanctions. Failure to comply with MCLE is the sanction applied to an attorney who has not completed the required 15 annual hours of continuing education the Bar requires.
It is not clear whether Chapman remains a partner at Kemp Smith or continues to work at the firm, although the Bar records show that he has been practicing out of Kemp Smith. Chapman, who was licensed on July 9, 1969, began his legal career at Kemp Smith, but left and later returned. Records show that he started at the firm in 1969 and left in 1980. He then returned in 1998. Before returning to Kemp Smith, Chapman served in several leadership roles in companies connected to El Paso Electric. Some of the entities became controversial as the utility faced bankruptcy.
Chapman has been recognized for his long support of non-profits including his long-time support of Operation Noel and supporting senior programs. He was appointed Sun Bowl president in 1964. But his career includes providing legal work for controversial figures and was at the center of the controversies involving the electric utility’s many subsidiaries that were central to accusations of improper relationships between the electric utility subsidiaries, investors and Kemp Smith.
Since at least 1995, Chapman has contributed to political campaigns like Larry Francis, Garry Mauro, Joe Wardy, Richard Wiles, John Cornyn, and Beto O’Rourke. Chapman, representing the El Paso Chamber of Commerce, frequently advocated for the controversial sports arena in the Duranguito footprint. The arena controversy mostly ended with a new city council led by Oscar Leeser being elected. Among Chapman’s political support includes Dee Margo and Steve Ortega, both proponents of the sports arena who lost their campaigns because of their support of the controversial arena. Most recently, Chapman made two contributions totaling $1,250 to Renard Johnson’s campaign for mayor.
Chapman, Kemp Smith And Downtown Revitalization
For decades, Jack Chapman has been alleged to be working for well-connected El Pasoans in several controversies related to downtown development. Among the controversies involve questions about whose interests Chapman represents when it comes to public policy.
In text messages obtained by El Paso News, El Paso Children’s Hospital CEO, Cindy Stout and Jacob Cintron, CEO of the University Medical Center (UMC) discussed board members that were being influenced by politically powerful people. In one text message exchange, Cintron tells Stout that Jack Chapman “is not a good choice,” because he “works for Rick Francis.” Stout was asking Cintron which board member nominees were connected to well-known El Pasoans. Although allegations of Chapman being linked as an operative for well-known El Pasoans have existed for decades, the text message exchanges between Cintron and Stout are two examples of officials discussing the connections between him and others.
Most recently downtown revitalization made headlines when a controversial use of the 2012 Quality of Life bonds targeted an Hispanic neighborhood for gentrification to make way for the multipurpose event center approved by voters. The center was controversially reenvisioned as a downtown sporting events center.
At the center of several downtown controversies was the secretive group, Paso del Norte Group (PDNG). PDNG was formed by a group of wealthy individuals who targeted Segundo Barrio in 2005 by developing a Master Plan for the downtown area based on the gentrification of the Hispanic community in the Duranguito neighborhood. The plan, revealed on March 31, 2006, would require eminent domain in what Bill Sanders described as a community whose buildings were “largely” in “rundown condition.”
The PDNG’s downtown plan was based on the discredited Glass Beach Study commissioned by the City of El Paso in 2006. The PDNG ceased operating on September 6, 2013. One of the members of the PDNG who was appointed vice-chairman in 2007 is Chapman.
There have been several attempts to revitalize El Paso’s downtown through building sports venues, with the Chihuahuas ballpark being one of them. Several attempts to use public funds for sports arenas have been attempted over the years. Before PDNG’s attempt in 2005, another attempt to revitalize El Paso’s downtown economy ended when the city’s electric utility filed for bankruptcy.
El Paso Electric Files For Bankruptcy
On January 8, 1992, the El Paso Electric Company filed for bankruptcy. By the time the dust settled millions of dollars had been lost by investors, El Paso electric ratepayers continued to pay one of the highest electrical rates in the state, and lawsuits and criminal charges were filed in high profile cases. The electric utility listed $1.83 billion in liabilities and $1 billion in assets in its bankruptcy filing. The court filing forced the utility to disclose many of its business relationships that helped lead it to bankruptcy. The electric utility and Maury Kemp along with others had also been indicted on charges alleging they engaged in criminal activities at the time of the bankruptcy.
On February 12, 1996, the electric utility emerged from bankruptcy after agreeing to freeze electric rates for ten years and selling up to $1 billion in “junk bonds” to investors to help settle its debts. Although out of bankruptcy, the criminal allegations and improper relationships between the law firm, its clients and the electric company continued to make headline news with almost all of it centered around the utility’s attempt to revitalize downtown.
In the late 1980’s, the El Paso Electric Company was described as one of the city’s “biggest players” in the city’s economy “by investing in such non-utility ventures as real estate, manufacturing, and financial institutions” read the Dallas Morning News article. Critics at the time argued that the utility’s investments were benefiting “a handful of the city’s elite at the expense” of El Paso customers. El Pasoans were paying one of the highest electric rates in Texas.
At the time, the utility’s investments were lauded for revitalizing downtown El Paso but often ignored was how it was the electric ratepayers that were paying for propping up downtown. The 1982 Mexican Peso devaluation led to serious declines in downtown El Paso. To help revitalize downtown, El Paso electric ratepayers unwittingly funded the development through complex and opaque business transactions between the city’s electric utility, Kemp Smith and other elite members of the community.
In September 1977, El Paso Electric Company invested $1,000 in Franklin Land & Resources, Inc. On the surface it seemed the utility was investing in a company that was not unrelated to them. The reality was that Franklin Land was a subsidiary of the electric company. Seven months after the $1,000 investment, the electric company subsidiary owned $2 million in properties that included the Mills Building and uranium mines in Wyoming and other investments in New Mexico. By 1983, the subsidiary had leveraged loans against limited assets to convert about $5 million in investments into almost $47 million in debt, much of it unsecured.
The reason the companies were able to leverage the large amount of debt against a small asset portfolio was because the El Paso Electric Company was surreptitiously guaranteeing the loans to the banks.
The electric company’s chairman said that the subsidiary’s ability to borrow so much with little in assets was due to the electric company’s relationship with the banks. Among the various investments made by Franklin with the support of its parent – the electric company – included two downtown hotels, The Cortez and Paso del Norte.
With four of the utility’s board members also on the board of State National Bank, the bank became the lead facilitator of the loans used to buy the downtown properties.
By 1989, facing the threat of insolvency, the utility’s chairman, David Wiggs, Jr., argued that the utility’s problems stem from “a change in the business environment that has been completely out of our control,” as he implored city council to allow it to raise rates. Wiggs did not mention the electric company’s business subsidiaries that were indebted to the utility.
Although both Franklin and electric company officials continually argued that the likelihood of El Paso ratepayers having to pay the loans for the downtown investments was unlikely, by 1990, the electric company was asking ratepayers to pay $106 million over the next six years to help the electric company stay out of bankruptcy.
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When the city council refused the electric utility’s request for a ratepayer bailout, the electric utility sought a bailout of $1.1 billion in debt through the state regulatory agency. Then-chairman David Wiggs told the Texas Public Utility Commission that it needed “about $92 million” to survive in 1991.
Leading the headlines for the financial problems faced by the electric utility was a complicated sale and lease-back arrangement the utility made in the Palo Verde nuclear plant in Arizona. They had borrowed $70 million from local banks for the $190 million deal, which included $120 million in a lease arrangement that spread the expense through a complex arrangement where most of the cash came from the borrowed money from the banks. But Palo Verde was one of other controversial investments in the 1980’s that included a $20 million investment in an insurance company that was not properly licensed.
The Collapse Of The Maury Page Kemp Empire
In his 2009 memoir, “Making It, The Story of a Business Empire,” Maury Kemp explains that “the storm,” as he refers to the events in the 1980’s, “triggered an avalanche of consequences.” Kemp makes it a point to let readers know that Wyndham Kemp founded the second law firm in Texas. Wyndham Kemp was his grandfather. The law firm is now known as Kemp Smith, although it has carried other named partners on its letterhead over the years.
Although Kemp is best known for his car dealerships in the 1980’s, it was his financial and insurance companies that led to his downfall and brought both Kemp Smith and Jack Chapman into the controversies making headline news.
In June 1991, an El Paso grand jury indicted 11 prominent El Pasoans and several businesses charging them with conspiracy to steal from investors. Among those indicted included Kemp and his insurance companies, El Paso Electric Co., Franklin Land & Resources, PasoTex, Triangle Electric Supply and Kemp Smith.
In 1992, two criminal trials were held in Midland. The first one started on January 13, 1992. The trial involved Kemp and two other defendants who were charged with check kiting. Check kiting is bank fraud where two bank accounts are used to create the illusion of sufficient funds to cash checks by using the time it takes for the bank to receive the funds from the other bank. This “float” allows one check to fund the second check. Kemp admits in his book that “there was no question that the check kitting occurred.” Kemp explained that his “need for cash” for his failing insurance companies not only led to the check kiting “but also resulted in criminal charges being brought against me and other prominent El Pasoans.”
Kemp and the other two defendants were convicted. Kemp was sentenced to 40 months in federal prison. But before he went to jail, he had a second court hearing in July to face charges of conspiracy and theft.
On July 13, 1992, seven individuals stood before the judge at the start of the second trial that year involving Kemp. The charges stemmed from $70 million in annuities that El Paso Electric had purchased from one of Kemp’s insurance companies. Additionally, the electric company had loaned Kemp $12.8 million to finance the purchase of Triangle Electric Company.
This time, the criminal case ended with no convictions without the defense teams calling a single witness. But the case revealed how downtown revitalization was funded by electric utility users and how the utility used several companies it owned to fund the revitalization largely unknown to its electrical power users. In the end, small investors had lost almost $10 million while the electric utility emerged largely unscathed from its investments and from the bankruptcy while still having one of the highest electric rates in Texas.
On the surface, the electric utility’s bankruptcy appeared to be about an investment in a nuclear power plant. But Kemp’s legal problems exposed money transactions that led to criminal charges and at least one lawsuit alleging Kemp Smith, the electric company and others improperly benefiting from several companies funded or owned by the electric utility.
For his part, Kemp wrote that “at no time was I aware of any illegal activity, conspiracy or scheme that was perpetuated by the Kemp Smith law firm…or any officer of the El Paso Electric Company involving me or any of my companies.”
The Alleged Conspiracies Perpetuated By The Law Firm And The Electric Company
Maurey Kemp sold annuities to wealthy Mexicans through his insurance companies that were improperly licensed. The people holding investments in Kemp’s businesses lost millions. As people lost money, the utility was paid $75 million of the $95 million it had invested in Kemp’s companies. The electric company argued that the utility still owed $20 million that should be paid before investors were paid because they said their investments were backed by Treasury bills.
As the controversy played out in the headlines, it soon became apparent that a relationship allegedly designed to avoid regulatory oversight over the utility developed between Kemp and the electric utility. The alleged relationship allowed the electric company to buy investments through other businesses related to Kemp. At the center of the alleged conspiracy was Kemp, Smith, Duncan & Hammon, the law firm founded by Kemp’s grandfather.
Other relationships between the law firm, the electric company and Kemp, included Tad R. Smith, the law firm’s senior partner and an El Paso Electric company board member, as well as David Wiggs who had been a partner in the law firm before being appointed to lead the electric company through its bankruptcy.
In addition to Franklin Land & Resources and Electric Triangle, the electric company had ownership or investments in other companies. One was PasoTex.
In February 1989, Westwood Lighting Group, one of the largest lamp manufacturers in the US filed for bankruptcy protection. The largest creditor listed in the bankruptcy was Jack Chapman of PasoTex for $2 million. PasoTex was funded with the help of the electric company and controversial transactions between the companies emerged where financial transactions included past members of Kemp Smith.
Another controversial company was Border Steel that was purchased in 1987 by the electric utility. In 1988 Cecily Pestridge sued Border Steel and the electric company alleging that the companies conspired to defraud her out of $1.14 million by making her Border Steel stock worthless. The conspiracy, according to the court filing, began in 1983 when Frankling Land & Resources took control of Border Steel.
In 1987, the electric company purchased Border Steel and assumed control of Houston-based EnerServ Products, Inc. which was delinquent on a $20 million loan it owed to MBank-El Paso. The chairman of MBank at the time was Hal M. Daugherty, Jr., who also sat on the electric utility board. The chairman of EnerServ was Jack Chapman who had left Kemp Smith. The electric utility’s subsidiary, Franklin, paid $1,000 for 14.5 million shares of EnerServ making 145 shares worth a penny. EnerServ shares traded at $21.50 seven years before. The electric company’s initial $1,000 investment in Franklin ten years before was now worth about $100 million in assets.
But by 1988, the electric company’s investments were losing value. The El Paso Electric Company lost over $6 million in its investment in PasoTex and another $9.5 million in its downtown renovation projects. As its downtown investments were losing money, EnerServ headed by Chapman showed over $4 million in profits.
What helped the electric company with the $1,000 purchase of over 14 million shares of EverServ was the debt EverServ owed MBank-El Paso. MBank-El Paso, like the electric company, were both represented by Kemp Smith. Former Kemp Smith attorney, Jack Chapman was the chairman of EverServ at the time of the transfer of stock.
But the intermingling of financial transactions between electric company subsidiaries, the electric company and Kemp Smith did not go unnoticed. In addition to the 1991 Maury Kemp criminal trials that named electric company CEO Evern Wall and Kemp Smith partner Tad R. Smith as indicted conspirators, the indictment also named the electric company and Kemp Smith. Tad Smith, according to the indictment, formed PasoTex while still a partner at Kemp Smith and while serving on the board of the electric company. It was PasoTex that appeared to be the “investment vehicle” for the utility’s purchases.
Kemp Smith Malpractice Lawsuit
On September 23, 1989, the Kemp, Smith, Duncan & Hammon law firm was sued by Jo Ann Albright and her former husband for legal malpractice. According to the lawsuit, the law firm provided confidential information to Maury Kemp during their 1987 divorce. Specifically, the lawsuit alleged that the Kemp Smith attorneys “conspired to defraud the couple of their interests in their ownership and sale of Bassett Center.” Other allegations included mishandling business interests, violating client trusts and conflicts of interest. Leaders among the partnerships alleged to have been part of the conspiracy included Jack Chapman.
Another lawsuit was filed in 1990 accusing El Paso Electric of stock fraud and conspiracy in a lawsuit filed by two stockholders and an electric company subsidiary. Chapman was added to the lawsuit by the plaintiffs because he was an officer of PasoTex.
Although the criminal trial produced no convictions, the case led to exposing the various business subsidiaries that the electric company embarked upon, including downtown revitalization, that compounded its financial problems that led the utility into bankruptcy. Among 15 creditors that the electric utility identified as owing money to was Chapman, who was owed $18,852 in 1992. Chapman’s name would again come in another financial scandal 15 years later.
Bob Jones And ReadyOne
Another round of downtown redevelopment in 2000 began to expose another widescale fraud in El Paso. Around 1996, the El Paso Natural Gas vacated its downtown building known as the Blue Flame Building. Although some investors showed interest in the building, the gas company donated the building to the El Paso Independent School District (EPISD) provided that the school district paid for renovations and maintenance. On December 10, 1996, the school district voted to accept the Blue Flame Building. By 2001, the school district was facing a $5 million deficit, and voters had recently rejected its 2000 $398 million bond election held on December 12. In one of the first moves to shore up its finances, the school board voted to vacate the Blue Flame Building.
It wasn’t until three years later that the school district received an interest from someone looking to purchase the building. At the March 16, 2004 school board meeting Chapman represented Bob Jones who wanted to buy the building. When then EPISD board president Lorraine O’Donnell asked that the approval of the sale to Jones included language that the Jones Family Trust disclose an audited financial statement to the district, Chapman, representing the trust told the school board that the “closely held entity did not have outside audit statements.”
School board members approved the sale of the building to Jones without the audited statements. Joining O’Donnell voting to approve the sale of the building to Jones included Sal Mena, Carlos Cordova, David Dodge and Charles Roark.
The opaqueness of the Jones family trust would become significant in several criminal public corruption cases that erupted in 2007. The Poisoned Pawns investigation led to over 40 people indicted, investigated and jailed for several instances of criminal public corruption. Among them included Bob Jones, Sal Mena and Carlos Cordova.
The ReadyOne Scandal
In 2006, the non-profit National Center for employment of the Disabled (NCED) was one of El Paso’s largest employers with around 4,000 employees on its payroll and revenues of about $4.5 million. The rise of NCED led by Robert E. “Bob” Jones made him the city’s top in entrepreneur in 2005.
Jones was lauded by the business community “as a major contributor, a major employer, a major component to the business community and a major growth company,” prominent business owner Tanny Berg told the El Paso Times on January 9, 2007. Berg added that “it’s only fair to say we as a community didn’t have a lot of insight into the day-to-day operations of NCED.”
A federal investigation into NCED found that only eight percent of the work being produced at the facility was being completed by people with disabilities. The federal contract that awarded the contracts to NCED required that 75% of the work be completed by people with disabilities. On March 3, 2006, Jones was forced to resign from NCED. Chapman represented NCED, renamed to ReadyOne during the negotiations to keep the company operating under the set-aside government contracts.
El Paso’s disabled community complained for years that NCED was not serving the disabled community as was required. Joe Wardy, who was appointed as interim CEO to help ReadyOne keep the federal contracts, explained to the El Paso Times on January 9, 2007 that an underlining issue with the discrepancy in how disabled employees were counted was that the program rules was “not what the typical El Pasoan would consider disabled.”
Although Chapman returned to Kemp Smith in 1998, it remains unclear whether he continues working at the firm. The State Bar of Texas lists him as working at Kemp Smith. Five years after representing Bob Jones before the school board, Chapman’s name surfaced again in another controversy, this time involving a KVIA news reporter.
KVIA’s Darren Hunt Arrest
On April 20, 2009, KVIA reporter Darren Hunt was arrested by El Paso Police officer Raul Ramirez on Interstate 10. Hunt and KVIA cameraman Ric Dupont, who was also arrested, were reporting on an accident on the freeway. In September, a civilian disciplinary board determined that allegations of unlawful arrest excessive force against Ramirez were unfounded. Nonetheless, then-police chief Greg Allen suspended Ramirez for 11 days. The review board included KDBC 4 news director Scott Pickey and KINT news director Zoltan Csanyi-Salcedo, former El Paso Sheriff’s Office spokesperson Rick Glancy and El Paso Times publisher Ray Stafford. Also on the board were lawyers Kevin Shannon and Chapman.
In 1999, Chapman, along with four others, organized a reception for Woody Hunt honoring Hunt’s appointment to the University of Texas Board of Regents. It remains unclear when Chapman was put on the lawyer delinquent list but as of June 25, he remains prohibited from practicing law in the State of Texas.