The Dallas Morning News

Paxton trials moving to Harris County

Harris County will be new venue; lead counsel for state and defense are located there

- By LAUREN MCGAUGHY Austin Bureau lmcgaughy@dallasnews.com

Attorney General Ken Paxton’s criminal trials will be moved from Collin to Harris County, the presiding judge says, and Paxton’s legal team asks for the judge to be replaced.

AUSTIN — Attorney General Ken Paxton’s criminal trials will be moved from Collin County to Harris County, the judge presiding over the securities fraud case announced Tuesday.

“Harris County was selected because the lead counsel for the state and the defense are located there,” Judge George Gallagher said in a prepared statement. “Harris County also has the facilities to accommodat­e the trial.”

Paxton’s attorneys responded by asking for Gallagher to be removed and a new judge in Harris County named to the case. Citing a state law that all parties have to agree to maintain the original docket if a change of venue is ordered, Paxton said he did not agree “to allow the Honorable George Gallagher or his court staff to continue to preside over the matter in Harris County.”

“Paxton therefore requests that the Court order its clerk to send a certified copy of its file to the Harris County District Clerk that a new judge may be assigned,” his motion read.

Last month, Gallagher announced his decision to move the trial out of Collin County, where Paxton has lived and worked for years. The move was a major loss for Paxton, whose lawyers denied the prosecutio­n’s assertions that his allies had waged a “crusade” to taint the Collin County jury pool in their client’s favor.

Paxton immediatel­y asked Gallagher to reconsider his decision. Paxton’s attorneys argued that the judge had mistakenly made the decision to move the trials based on “an ethical problem” that didn’t exist in the case.

Gallagher disagreed Tuesday, sticking with his decision to move the trials and announcing they’d take place in Harris County, where Paxton’s lead trial lawyer and the special prosecutor­s have private practices.

His decision marks yet another blow to the attorney general. North Texas boasts some of the most solidly

Republican counties in the nation, while Harris County easily went for Hillary Clinton over Donald Trump last year, 54 percent to 42 percent.

Gallagher did not set a new date for the trials, which were scheduled to kick off May 1. Moving a trial venue, especially for a high-profile case, will delay the process several months.

It could be late summer or early fall before the trials begin. By then, it will have been more than two years since a Collin County grand jury indicted Paxton on three felony counts of breaking state securities laws.

The case dates to mid-2011, six months after Paxton ditched his plan to challenge House Speaker Joe Straus for his leadership role. Then, Paxton was a fifth-term state representa­tive from McKinney, part of a batch of conservati­ve Republican­s swept into the House on the tea party wave nearly a decade earlier.

In July of that year, two months before announcing he would run for state Senate, the prosecutio­n alleges Paxton encouraged members of an adhoc investment club made up of lawmakers and their friends to buy stock in a little-known McKinney technology startup called Servergy Inc. The friends obliged, purchasing more than $800,000 in shares.

But two of those investors, Rep. Byron Cook and Florida businessma­n Joel Hochberg, claim they were duped. They said they thought Paxton, too, had bought stock and were not told that he made a commission from the company off their investment­s. Cook, a Corsicana Republican who still serves in the House, and Hochberg are the named complainan­ts on Paxton’s two first-degree securities fraud charges.

Paxton also faces one thirddegre­e felony charge. The prosecutio­n alleges he encouraged people interested in investing to consult with his friend Frederick “Fritz” Mowery, who operated a capital management firm in McKinney, but that he did not disclose he made a commission off their business, either.

Paxton signed a disciplina­ry order in 2014 and was fined $1,000 and reprimande­d for the failure to register, but he has denied criminal wrongdoing and called the issue an administra­tive error. He has maintained his innocence on all charges since he was indicted in July 2015, saying they’re part of a politicall­y motivated witch hunt by members of his own party to unseat him from power.

The allegation­s of an antiPaxton conspiracy have colored the reaction to his prosecutio­n in Paxton’s home county. Allies have waded into the fray, alleging Paxton has been unnecessar­ily targeted and railing against the high cost of the prosecutio­n. Collin County is on the hook to pay for the three special prosecutor­s, who were named after the local district attorney recused himself from the case and have billed the county for more than half a million dollars.

Their last paycheck is on hold, however, after a Collin County taxpayer and friend of Paxton’s sued, claiming the prosecutor­s were being paid too much. That case, still pending in a Dallas appeals court, was cited by the prosecutor­s as one reason they couldn’t get a fair trial in Paxton’s backyard.

Paxton has failed to have his indictment­s thrown out, despite multiple attempts that have delayed the case nearly two years. Last month, he took a brief victory lap after a federal judge again threw out civil fraud charges lobbed against him by the U.S. Securities and Exchange Commission.

That decision, while a net positive in the court of public opinion, did not affect his criminal trials. By month’s end, Gallagher had dealt him the blow that would result in the proceeding­s being moved 300 miles from home. Two trials will be held, the first on his third-degree felony charge and the second on the fraud allegation­s.

“I want to go forward,” Paxton told The Dallas Morning News last month in a rare interview about his case. “The prosecutio­n wants to delay it indefinite­ly. You might ask them. They won’t probably give you the full story.”

The next day, Gallagher placed a gag order on the lawyers in the case, telling them, “We’re not going to have any more quotes to the press.”

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