DA finds $100,000 gift to Paxton didn’t violate bribery law

AUSTIN — Prosecutors will not pursue charges against Texas Attorney General Paxton for allegedly violating the state’s bribery and corrupt influence laws by taking money from someone whose company was under investigation by his office.

Kaufman County Criminal District Attorney Erleigh Wiley announced late Friday that his office closed its investigation into a $100,000 gift that James Webb, the CEO of Preferred Imaging, made in 2015 to help fund Paxton’s legal defense fund. The attorney general’s office agreed in 2016 to a $3.5 million settlement to resolve its investigation into Webb’s company for Medicare fraud.

State law bans agency officials like Paxton from accepting a “benefit” from someone under the agency’s oversight. However, the ban does not apply to a gift “conferred on account of kinship or a personal, professional, or business relationship independent of the official status of the recipient,” according to Chapter 36 of the penal code.

Wiley said in a written statement just after 6 p.m. Friday that the gift did not violate state law because “Paxton had a personal relationship with the donor.”

“Accordingly this investigation has been closed,” Wiley said.

Paxton’s legal team has previously said he has done nothing wrong. A spokesman for the Attorney General’s Office said earlier that Paxton had no knowledge of the investigation into Webb’s company and the office participated little in the investigation. Pax-

ton has fully cooperated and “all the donations given to the Paxton legal defense effort are in full compliance with state law,” Matt Welch, Paxton’s legal defense and campaign spokesman, said in a previous statement.

Paxton was indicted in 2015 by a Collin County grand jury on two charges of first-degree felony securities fraud and one thirddegree charge of failing to register as an investment adviser with the state.

That same year, Webb cut Paxton the six-figure check to fund his legal defense. It was among two dozen such gifts the newly elected attorney general received from wealthy givers he labeled as “family friends” that year, totaling $329,000, according to his personal financial statement filed with the state. In 2016, state and federal agents made a settlement with Webb’s company, Preferred Imaging.

The Texas Civil Medicaid Fraud Division and the U.S. Justice Department had been conducting a probe of Webb’s company, which provides diagnostic imaging for patients in facilities located in Texas, Illinois and Kentucky. A whistleblower accused the company of violating Medicaid billing rules, according to the Northern District of Texas’ U.S. Attorney’s Office.

Webb, of Frisco, is a former law client of Paxton’s, according to Paxton’s spokesman.

Webb has been a regular campaign contributor of Paxton’s for years. He gave him his first political donation in 2013 when the Republican from McKinney was running for attorney general, according to campaign finance records. He has contributed heavily to other Republican candidates’ political campaigns since then.

Paxton, from Collin County, is in a fight for his political career. For more than two years has fought to beat charges that he committed felony securities fraud when persuading friends and colleagues to invest in Servergy, a North Texas tech company, without disclosing he was making a commission.

Paxton has maintained his innocence and has said he expects to beat the charges, which he contends are part of a political witch hunt.

jeremy.wallace@chron.com twitter.com/jeremyswallace