Paxton prosecution ‘laced with politics’
Attorney general draws first opponent in election cycle as his case drags on
AUSTIN — The unresolved criminal charges against Attorney General Ken Paxton may be centered around whether he committed securities fraud, but other drama surrounding his case has pushed that judgment to the back burner.
The tea party darling’s case has taken several detours over the last two years since his indictment, most recently with an investigation into bribery, questions over how much prosecutors should be paid and contentious politics among the state’s largest group of criminal defense lawyers. Now, he’s attracted his first opponent in this election cycle.
“There are a lot of fits and starts because the politics and the legal process intermingle,” said Brandon Rottinghaus, an author and academic who has studied more than 300 executive scandals dating back to 1972. While it’s normal for cases involving top elected officials to take a year or two to work through the courts, the particular delays and tangents stemming from Paxton’s case are more akin to legal dramas on the national level, he said.
“National scandals tend to be more tinged with politics since the stakes are high for the White House. The Paxton scandal is strongly laced with politics like national scandals because of the high stakes for the attorney general’s future and the potential brand damage to the Texas Republican Party,” said Rottinghaus, who wrote “The Institutional Effects of Executive Scandals” and teaches political science at the University of Houston.
“Ken Paxton has been at every level either lucky or well-represented or a combination of the above where he’s been able to essentially deflect much of the political damage that might come otherwise, and legally he’s been able to survive the various slings and arrows that have come his way.”
Paxton, a first-term Republican attorney general, was indicted in July 2015 and has since been fighting two charges of first-degree felony securities fraud and a third-degree felony charge for failing to register with the state as an investment advisor. The case, which involves his selling of stock for a North Texas
tech company unrelated to his time in office, has captivated political and legal observers around the state, given the novelty of having the state’s top law enforcement officer under indictment.
The charges threatened to multiply recently amid revelations that an administrative judge had appointed Kaufman County District Attorney Erleigh Wiley to investigate whether Paxton broke laws under the state bribery code while raising money for his legal defense. After a 10-month investigation, the district attorney from about 60 miles south of Paxton’s home base of Collin County announced on a Friday night that there would be no charges.
“After a thorough review of the evidence gathered during this investigation, my office concluded that Attorney General Paxton had a personal relationship with the donor, in addition to a prior attorney/ client relationship, which relationships render Penal Code Section 36.08 inapplicable to this donation. Accordingly, this investigation has been closed,” Wiley said in a statement.
Violation of the state’s gift ban would have meant a Class A misdemeanor, punishable with up to a year in prison, up to a $4,000 fine or both.
Wiley was asked three days before Christmas in 2016 to investigate a $100,000 donation to Paxton’s legal defense fund. The Collin County district attorney’s office recused itself from the case, according to Wiley. The donation in 2015 came by way of a gift from James Webb, the CEO of a diagnostic imaging company under investigation by federal agents and the attorney general’s office. The next year, the company received what critics said was a favorable settlement from the attorney general’s office.
The office’s Texas Civil Medicaid Fraud Division and the U.S. Department of Justice in June of 2016 co-signed a $3.5 million settlement of a whistleblower lawsuit accusing the company of violating Medicaid billing rule. The state received $68,000 of the settlement.
Paxton said Webb, who leads Premiere Imaging, is a family friend and former legal client who is allowed to give state officials like him gifts without violating the state’s gift ban. Paxton reported collecting $547,000 from people he identified as friends and family between 2015 and 2016 to help pay his legal bills.
The announcement that the unrelated investigation turned up nothing was a win for Paxton. But his legal team is hoping for another critical victory that could cripple the prosecution against the sitting attorney general.
Prosecutors’ pay
Running parallel to Paxton’s criminal proceedings is an effort to defund the prosecution by capping the special prosecutors’ pay at $1,000 for pretrial work in accordance with county rules. A trio of Houstonarea special prosecutors appointed to build a case against Paxton for $300 an hour billed Collin County for about $200,000 worth of work in January. Local rules allow a judge to agree to higher pay schedules in special circumstances, the special prosecutors argue, but the local commissioner’s court refused to pay the bill, kicking the issue into the legal system.
The special prosecutors, seasoned lawyers who work in private practice, say they will walk away from the case if the courts cap their pay. That would unravel much of Paxton’s case, requiring the appointment of new special prosecutors who will need time to get up to speed and further delay resolution of the trial. Assigning a district attorney from Paxton’s home base in North Texas could be politically dicey, according to Brian Wice, one of the special prosecutors, in a legal filing defending his appointment.
“Any district attorney called on to investigate and prosecute a sitting attorney general, especially one as popular with the powerful sects of the political party that has a stranglehold on every statewide-elected office, would not exactly be thrilled at accepting such a task,” read the filing from Wice. “Aside from the potentially dire political repercussions of signing on, any district attorney who might consider such an appointment would have to consider the fact that his or her office has to deal with the Attorney General and his office on myriad matters on a daily basis.”
The other, more weighty repercussion of the back pay decision is what a strict adherence to the cap would mean to the 166 counties throughout the state that currently give judges discretion to pay appointed attorneys more to take on special cases.
Various groups and officials weighed in, filing briefs with the court. The County Judges and Commissioners Association of Texas it would adversely affect their budgets should the court allow judges to set “unfettered attorney’s fees.” Meanwhile, the Texas Criminal Defense Lawyers Association filed an amicus brief stressing that a limit jeopardizes the court’s independence and could have a “serious negative impact on indigent defense in Texas.”
But the filing from TCDLA sparked its own political battle, causing the executive board of the group to quickly yank the filing from the record. The reason: The organization’s upper management board did not sign off on the amicus brief.
The board has relationships with lawyers on both sides of Paxton’s case: One of Paxton’s criminal defense attorneys, Heather Barberi, serves as secretary to the group’s executive committee; Kent Schaffer, one of the special prosecutors, is one of the organization’s past presidents.
The association’s relationships with attorneys on both sides of Paxton’s case had no influence on the executive committee’s decision to drop its amicus brief supporting the special prosecutors, said David Moore, president of the TCDLA. He said the organization will reconsider whether to file the amicus brief but that could take weeks to decide.
The matter is now before the Texas Court of Criminal Appeals, the state’s highest court for criminal cases. The court is expected to decide in coming weeks whether it will hear arguments on the case, make a ruling or disregard the matter.
Law and politics
Quinton “Dwight” McDonald, a law professor at Texas Tech University, said it’s difficult to parse whether many of the issues stemming from the Paxton case are rooted in the law or politics.
“The reality is you can’t separate those worlds. You can talk about the legal world, but the reality is you have elected officials involved in this,” said McDonald. “Both of those things are in play. Which one is in play more? That I don’t know.”
Paxton’s charges stem from him allegedly failing to tell his friends and colleagues he stood to gain from their investment in Servergy, a North Texas tech company. He was also charged with failing to register as an investment advisor and faced mirroring civil charges in federal court.
His trial, originally set for May, has been rescheduled as early as March.
The allegations have followed him since his primary bid to become the state’s top law enforcement officer in 2014. He argues he is the victim of a political witch hunt from members of his own party and maintains his innocence. A federal civil judge sided with him earlier this year, tossing charges brought by the U.S. Securities and Exchange Commission and accusing the agency of trying to fit a square peg into a round hole.
Meanwhile, Paxton has kicked off his bid for reelection. Known for suing the Obama administration, supporting anti-abortion efforts and as a strong supporter of President Donald Trump’s travel ban, Paxton is running with no Republican opponent in sight, leaving him so far unscathed from allegations that have dogged him since he last ran for election nearly four years ago.
The Republican primary election is where the bulk of electoral contests are decided in Texas. Republicans have had a strong hold on the office since 1999.
However, a Democratic candidate entered the fray recently. Austin attorney and Houston native Justin Nelson announced he would run against Paxton in the general election, saying the state deserves to have a top law enforcement official who is not under indictment.
“Justice is for all. Nobody is above the law. Texans can do better than our indicted Attorney General who is charged with criminal fraud,” said Nelson.
“Ken Paxton has been at every level either lucky or well-represented or a combination of the above where he’s been able to essentially deflect much of the political damage that might come otherwise, and legally, he’s been able to survive the various slings and arrows that have come his way.” Brandon Rottinghaus, political scientist