Express-News

  • How shoe-leather reporting uncovered a bizarre bankruptcy tied to Senator Carlos Uresti

    Earlier this year, Express-News business writer Patrick Danner set out to write a story about the rising number of oil and gas companies going bust in South Texas.

    What he found instead was a a bizarre saga about a bankrupt company accused of fraud and its hidden ties to Texas state Sen. Carlos Uresti, D-San Antonio.

    Danner’s tenacious digging offers a shining example of why traditional, shoe-leather reporting still matters in an age of Facebook feeds and Twitter handles. Thanks to the story, Express-News readers now know that the FBI is investigating the case, Uresti says he’s been interviewed as a witness, and the senator revised his state-mandated financial disclosure report.

    These are the kinds of details that can’t be found in a Google search — unless you Google Danner’s blockbuster article.

    Patrick Danner
    Patrick Danner
    I sat down with Danner to talk about how he got the story and the challenges he faced in reporting it.

    Q: I thought I’d first ask you to describe your beat, since that explains how you found the story.

    A: Sure. I cover civil courts, interesting civil litigation. Bankruptcy court, which is where I came across this. And banking. And that’s pretty much it.

    Is that a goldmine for stories? I mean, it seems like you find some pretty interesting things that get litigated.

    Yeah, I’m just attracted to conflict. And so I’m always going through cases just to see if there’s something there to chew on. In this particular instance, it was a bankruptcy filing that caught my eye. Because I was hearing about, you know, with the decline in oil prices, that there would be a lot of bankruptcy filings from companies operating in the Eagle Ford Shale. So I was keeping an eye out for those.

    Then, within the span of a week or so, it seemed like there were four (bankruptcies) that were filed. They weren’t big names. But I thought I could use that as a spring board to do a story on the wave of bankruptcies in the Eagle Ford.

    I’m just attracted to conflict. And so I’m always going through cases just to see if there’s something there to chew on”

    It actually didn’t really pan out that way. A lot of them were filed in other cities. Houston for instance. So we haven’t really had a big uptick in bankruptcy filings. But in this particular instance, I reached out to the attorney for FourWinds Logistics, which is a frac sand company that would buy and sell frac sand, and the attorney referenced a claim that FourWinds had against Halliburton, which was buying sand from FourWinds, reneging on a $7.5 million contract. For such a small company, that’s a pretty big contract. And from there I just started following the case.

    So at this point you don’t even know of Uresti’s involvement. How did you find out about it?

    I found out about Uresti’s involvement when I went to a creditors hearing in FourWinds’ bankruptcy.

    Can you quickly describe what that is?

    Sure. A creditors hearing is conducted by a bankruptcy trustee. The trustee asks the debtor certain questions. Tax returns, things like that. It’s fairly mundane stuff. But the interesting part of the creditors meeting is the creditors have an opportunity to ask questions. So there were attorneys there for different parties. And there was also an attorney on the phone who represented a woman who was suing FourWinds. And I knew nothing about this lawsuit. It was filed down in Cameron County. And apparently she was suing for fraud and I didn’t know any of this. But during the hearing, the attorney asked Stan Bates, the CEO of FourWinds, about his response to the lawsuit, which designated Carlos Uresti as a responsible third party. I had no idea what that meant, whether it was the state senator himself.

    It definitely perked your interest, though.

    Yeah, yeah, it got me certainly curious. So from there, the next thing I did was try to get a hold of that lawsuit down in Cameron County. I had to look up, what does that mean, a responsible third party? In essence, what it means is that Stan Bates was blaming the problems that FourWinds had on conflicts of interest that he alleged Uresti had.

    So what’d you do after that?

    Well, I was curious what exactly were those conflicts of interest. Well, I found out he represented a woman who invested in FourWinds. Her name was Denise Cantu. She invested $900,000. And it turns out that Uresti was her legal counsel in a wrongful death case where two of Denise Cantu’s children died.

    Patrick Danner story about Carlos Uresti

    That’s basically summed up in the lede of your story, which is a bombshell. I’ve never really considered what happens when somebody wins a lawsuit, and what do they do with that money? And it raises all kinds of questions about conflicts of interest when their lawyer gets involved. And oh, by the way, he’s making a commission off this.

    Right. In this particular case, lawyers have certain obligations, rules they’ve got to follow. Uresti makes the point he was no longer her lawyer at the time he suggested she go see Stan Bates. And Denise Cantu testified that he didn’t advise her to put her money in FourWinds — but he did get a commission from her investment in FourWinds.

    So at some point you have to interview Uresti. How did that go and do you have any tips about interviews that can get confrontational or can be difficult?

    This particular interview wasn’t confrontational. Clearly I had to ask some tough questions. What I had done was basically gone through and written all my questions down. I don’t usually do that. But in a case like this, I want to make sure that I didn’t overlook anything.

    This is pretty technical stuff, too.

    Yeah. The funny thing was I had to call him back because I forgot to ask him a simple question. He got a $40,000 loan from FourWinds. And I had been hearing rumblings about where the money went. Fortunately he called me back. The question I forgot to ask was, what did you do with the money you had gotten from the $40,000 loan from FourWinds? So he did call me back and he answered that question. But I was knocking myself for forgetting to ask.

    Can you describe how (Bexar County District Attorney) Nico Lahood got wrapped into this saga?

    Yeah, he represented a gentleman by the name of Gary Cain. And from that trial, back in 2014, Cain was charged with four felony counts in a land deal involving Rackspace Hosting. Rackspace claimed it was ripped off by Gary Cain. Cain was found not guilty by a jury in July of 2014. Within a couple of months, he was brought on as a sort of a financial consultant with FourWinds, where he said he was helping raise financing for FourWinds.

    Maybe I’m drawn to the dry stuff. I seem to find a lot of complicated stories. I just try to keep it simple as possible”

    Cain’s business is called Trinity Global. A document was presented in one of the court hearings that mentioned Nico LaHood was co-chairman of the company. And I thought, well, that’s kind of odd that LaHood the DA is in business with a former client. You don’t see that every day.

    So one of the investors, Richard Thum, who is president of SA Five Star Cleaners, he felt like he had been ripped off by FourWinds. He told me that it was Gary Cain that recommended that Richard go see Nico LaHood and tell them what was going on at FourWinds. And so Richard Thum went to the DA’s office and met with Nico LaHood and his head of the criminal division. And they basically, according to Richard, expressed interest in the case. But they said to me that they advised him to go to the FBI. Richard did go to the FBI but he said he did it on his own. So the FBI took interest in the case and they’re looking into all this.

    So now we have a couple politicians who are revising their financial statements.

    Yeah. Uresti did go back and correct his financial disclosure form. And LaHood went back and corrected his after (Express-News columnist) Brian Chasnoff called and asked him why didn’t he disclose his business with Gary Cain?

    You mentioned you’re drawn to conflict, and conflict makes for interesting stories. But there’s also a lot of legalese, a lot of dry information in these lawsuits. It’s complicated. How do you go about writing this and making this understandable?

    I don’t know. Maybe I’m drawn to the dry stuff. I seem to find a lot of complicated stories. I just try to keep it simple as possible — in this case, leading with the human element of a woman losing two of her kids, and using the proceeds from the court settlement from the loss of her two kids to invest in this company. So that was the advice of my editor to do it that way.

    Really, other than the top of the story, which got rewritten a few times, the rest of the story just kind of took it in a chronological order.

    That’s probably one of the more helpful ways to approach it, right? Just walk through everything that happened.

    Yeah, although we did put up high the stuff about not disclosing certain things in his financial disclosure forms. We wanted to get that high in the story to make it clear, you know, here are the issues. Then get into what went on.

    But as far as bankruptcies go, I thought this was one of the juicier ones. Because you had a CEO who’s accused of basically spending money, flying in women, Victoria’s Secret, exotic cars, things that you don’t normally run across. So to me, I just thought, we’ve got different elements here that you don’t normally run across. Politicians. CEO accused of living a wild lifestyle. Things you don’t come across every day.

    What’s next for Denise Cantu?

    That’s a really good question because she’s got her lawsuit down in Cameron County. I had set up an interview with her, and then, basically at the last minute, her lawyers put the kibosh on it. Because of the pending litigation they didn’t want her speaking with me. So I don’t know.

    Well, it was a great story man. Anything I didn’t ask that would be good to know?

    No, I don’t think so. I certainly appreciate it. We’ll be sure to keep an eye on things but as far as FourWinds goes that’s pretty much over and done with. There’s nothing left to pick over.

  • Check out the sponsorship agreements that raise millions for UT Austin athletics

    Corporate sponsors at the University of Texas at Austin
    Photo by Tom Reel/San Antonio Express-News

    It’s no secret that corporate sponsors help fund the richest collegiate athletics program in the country at the University of Texas at Austin. After all, company logos are plastered everywhere at games.

    But what are the details of those sponsorship agreements? How much does each company spend? And what do they get in return?

    Thanks to the Texas Public Information Act and some persistent digging, UT Sports Writer Mike Finger obtained copies of 19 major sponsorship agreements that answer those questions. UT fought the release of the contracts but the Texas attorney general ruled they’re generally subject to open records laws.

    You can check out our story and view an interactive table with links to the actual agreements (I helped make requests to other schools such as Texas Tech and Texas A&M).



    The records show companies such as Nike, MillerCoors and AT&T have pledged to pay $98 million through 2021 as UT tries to return to on-field glory.


  • Check out the San Antonio bars and restaurants that raked in the most money in alcohol sales

    Jen at Bohanan's
    Date night with no kids. Look how happy this woman looks.

    Last night Jen and I enjoyed a rare date night at one of our favorite restaurants downtown, Bohanan’s, a swanky oasis of cocktails, jazz — and no screaming Tedesco children.

    If you’ve ever wondered exactly how much money your favorite haunt makes in alcohol sales, there’s now an easy way to find out.

    Joe Kokenge, the Express-News’ database editor, put together this interactive data viz that shows total alcohol sales for San Antonio bars and restaurants last year. Some of these numbers are mind-blowing.

    The top seller in San Antonio was the JW Marriott San Antonio Hill Country Resort & Spa — the same project that sparked years of controversy for seeking exemptions from city taxes and for building on the environmentally sensitive Edwards Aquifer recharge zone.

    The resort raked in more than $11 million in alcohol sales in 2013. That’s more than the second-place venue, the AT&T Center, home of the San Antonio Spurs and overpriced macro brews.

    The sales data comes from the Texas Comptroller’s office, which doesn’t offer the information in a very user-friendly format. Joe combined a year’s worth of data and put together an interactive, easy-to-use table that you can sort and search.

    It doesn’t show who sold the most alcohol, only how much revenue was generated in alcohol sales. So expensive drinks might move a company up in the rankings.

    Out of curiosity, I checked Bohanan’s and learned it generated a whopping $2.2 million in alcohol sales in 2013.

    That’s a lot of fancy cocktails.

  • Former San Antonio official Fernando De Leon faces federal charges in alleged bribery scheme

    Fernando De Leon, assistant director of land development for the city of San AntonioIn March 2010, San Antonio police detectives and FBI agents visited the city’s Planning and Development Services Department, the place where real estate projects go to live or die based on whether the necessary permits are approved.

    One of the officials who signed off on those permits was Fernando De León, the department’s friendly, soft-spoken assistant director. Investigators headed to his office. De León wasn’t there, but they seized his computer and files. City Manager Sheryl Sculley later fired him, but De León wasn’t arrested.

    Until last week.

    A federal indictment made public Thursday sheds light on the case against De León:



    Longtime readers of the Express-News might remember some of the details we had discovered about the case through public records and lots of digging:

  • Authorities were scrutinizing De León and a permit-expediting company called Rapid Permit Services. Federal officials subpoenaed records at Pape-Dawson Engineers Inc., one of the largest engineering firms in town, to gather information about Rapid Permit Services and possibly others. Pape-Dawson was not the target of the inquiry;
  • Rapid Permit Services got a plum job at the Rim, an 800-acre shopping center;
  • De León reviewed and approved some of the paperwork for the Rim that had been filed by Rapid Permit Services;
  • De León’s sister and possibly his mother were tied to Rapid Permit Services;
  • At Pape-Dawson, the point of contact for Rapid Permit Services was a project manager named Oscar Rodriguez.
  • For the first time, the indictment lays out the actual allegations against De León, and describes how he is accused of teaming up with Rodriguez to defraud Pape-Dawson and the firm’s clients.

    Check out the most recent story here, and if you want to learn more, here are past posts about the case.


  • How Mexican cartels launder drug money in San Antonio (Hint: Check the North Side)


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    Maggie’s was the place to go in the 1990s if it was late and you were a hungry college student (like me). Nestled among the car dealerships on San Pedro Avenue outside Loop 410, the two-story restaurant was open late and offered some of the best shakes ever.

    Maggie’s permanently closed, reopened as a Champ’s restaurant, closed, then reopened in 2009 as Barbaresco Tuscan Grill and Enoteca, a swanky Italian restaurant.

    Barbaresco was a lot different from Maggie’s. On its opening day, guests were treated to readings of Romeo and Juliet while an attractive, semi-nude woman lay on a table, her body strategically covered with pasta.

    Brothers Mauricio and Alejandro Sánchez Garza had bought the old Maggie’s restaurant, along with numerous other businesses and properties in San Antonio, and heavily invested in it. Now the Drug Enforcement Administration has accused the brothers of using those businesses to launder millions of dollars in drug money from Mexican cartels.

    Express-News reporters Jason Buch and Guillermo Contreras wrote about the money-laundering case in a story published Sunday. The article detailed key properties and businesses the brothers were involved in, which is a hell of a way of grabbing readers’ attention. A lot of people like me remember Maggie’s. Finding out the building is tied up in a federal money laundering investigation definitely piqued our interest.

    “It allowed us to see, literally see, how everything was connected.”

    I sit next to Jason in the newsroom so I talked to him a bit while he worked on the story. One difficulty he faced was keeping track of the tangled spider web of people, businesses and properties connected to the Mexican brothers. To make sense of everything, Jason used a plugin for Microsoft Excel called NodeXL, which allows you to create a social network diagram.

    Jason typed in more than 250 entities and their related entities in a spreadsheet, and NodeXL displayed that information in a graph that showed spokes between each connection. Here’s an example of the main players and entities:

    Money laundering social network analysis

    “It allowed us to see, literally see, how everything was connected,” Jason told me.

    In complicated stories with lots of moving pieces, building a chronology to keep track of key events is also important. By chance I learned about a new open source, interactive timeline tool by Zach Wise and told Jason about it. Timeline is also based on information contained in a spreadsheet. In Google Docs, you type in the dates and chatter, provide links to photos, videos, or other media, and then Wise’s Timeline tool uses javascript to display an interactive chronology that you can publish on a website.

    Jason and Guillermo were going to have to write a chronology in their notes anyway. Wise’s Timeline tool let them share their relevant information with readers in a really compelling way. Their timeline looks drop-dead gorgeous. And they linked to federal documents in the timeline, so readers could see the allegations for themselves.

    Maggie’s is long gone. But it was fascinating to see what became of it.