The top criminal court in Texas dealt a blow to the special prosecutors who are pressing felony charges against Attorney General Ken Paxton on Wednesday, a new wrinkle in a securities fraud case that has already stretched across four years and is far from resolved.
The Texas Court of Criminal Appeals on Wednesday declined to reconsider an earlier ruling that allowed a $2,000 limit on how much the special prosecutors can be paid for pretrial work — meaning the attorneys preparing this complex white collar crime case will be paid the same amount they would if they were representing a felony DWI defendant.
The court did not provide an explanation for its denial.
The case now returns to a state district court in Harris County.
“We’re disappointed that the Court took six months to summarily deny our motion for rehearing without addressing any of the substantial legal issues it raised, something it routinely criticizes the courts of appeals for doing,” said Houston lawyer Brian Wice, one of three special prosecutors assigned to the case, in a statement Wednesday.
Wice declined to answer further questions, but the special prosecutors have hinted previously that they would drop the case if they are not paid for hundreds of hours of work already clocked at the $300 an hour rate originally promised to them — a move that would postpone Paxton’s trial even further.
Paxton was indicted in 2015 by a grand jury in Collin County, his home county north of Dallas. The charges stem from claims, before he was elected attorney general in 2014, that he persuaded friends and colleagues to invest in a North Texas tech company without disclosing he would make a commission.
He is charged with two counts of first-degree felony securities fraud and a third-degree felony for failing to register with the state as an investment adviser.
A year before he was indicted, Paxton admitted to illegally soliciting potential clients without registering with the state when he signed a reprimand and paid a $1,000 fine to the Texas State Securities Board. Whether signing that reprimand amounts to an admission of guilt will be up to a jury to decide.
Paxton, a Republican who narrowly won re-election in November, has denied the charges. His spokesman Jordan Berry declined to comment Wednesday.
Attorney General for Texas Ken Paxton is facing two counts of felony securities fraud
AUSTIN — Special prosecutors assigned to build a case against Attorney General Ken Paxton can’t be paid the $300 an hour they were promised, the state’s top criminal court ruled Wednesday, leaving Paxton’s personal legal case involving charges of securities fraud in limbo.
The Court of Criminal Appeals ruled a trial court in Collin County exceeded its authority when agreeing to pay special prosecutors more than a county-approved fee schedule to represent the state in its criminal case against the attorney general.
The appeals court told a trial court judge in Harris County to issue a new order dictating how much to pay the special prosecutors.
“Ultimately, what amounts to good or bad policy is not up to this Court to decide,” read the ruling from Judge David Newell. “If the application of the statute at issue seems too harsh in this case, it is up to our Legislature to decide if and how to address it.”
According to court records, Collin County limits pay to attorneys to a fixed fee of $1,000 for first-degree felony pleas, $500 for third-degree pleas, $1,000 for pretrial preparation and $500 for each half-day of trial. Special prosecutors billed the county about $200,000 in 2017. The appeals court said it didn’t have to be paid.
The special prosecutors have hinted they would quit representing the state in the case if not paid. Such a decision would derail or delay Paxton’s criminal trial as the court searches for replacements who will agree to the limited pay schedule.
Special prosecutors have not returned calls seeking comment but wrote in an e-mailed statement they are considering their next steps.
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“While we are disappointed with the majority’s ruling and are exploring all legal options available to us, it does not alter the fact that Ken Paxton remains charged with three serious felony offenses,” read the statement.
Paxton was indicted in 2015 in Collin County, his home county north of Dallas. The charges stem from claims, before he was elected attorney general in 2014, that he persuaded friends and colleagues to invest in a North Texas tech company without disclosing he would make a commission.
He is charged with two counts of first-degree felony securities fraud and a third-degree felony for failing to register with the state as an investment advisor.
He narrowly won re-election in November.
“While this was a lawsuit brought by Collin County, Attorney General Paxton is extremely grateful for the court’s decision,” said Jordan Berry, Paxton’s spokesman. “The rule of law must always prevail.”
A trio of special prosecutors was appointed to build a case against Paxton after the Collin County district attorney recused himself because he had a personal relationship with Paxton. A trial judge agreed to pay Houston lawyers Brian Wice, Kent Schaffer and Nichole DeBorde $300 an hour to handle the case, a fee the lawyers argue is reasonable for the unusual circumstances of a complex case.
Paxton and his allies in Collin County brought lawsuits to stop paying the special prosecutors, arguing the fee exceeded local limits.
The court declined to determined whether the $300 per hour fee was reasonable, but found that state law bars trial courts from busting caps on locally approved fee schedules. The fee for the team of lawyers should be the same amount as an attorney providing indigent defense, the court ruled.
Wice, one of the special prosecutors who appealed the issue, said last year that denying their payment would have a “chilling effect” on trial judges’ ability to appoint qualified lawyers to complex cases.
“The outcome of a criminal case should not depend upon how much money a defendant has. But that is not the application of the statute we are dealing with here,” read the ruling, with Newell adding, “any possible constitutional concerns present in an indigent defense case are not present in this case.”
Three judges disagreed with the ruling, writing dissenting opinions. A fourth judge wrote an opinion both concurring and dissenting.
“The Court’s decision today will likely affect an overwhelming number of criminal cases in Texas and will possibly result in even more claims of ineffective assistance of counsel for indigent defendants,” wrote Judge Elsa Alcala in her 29-page dissent.
The Collin County Commissioner’s Court, which paid the special prosecutors $242,000 in 2016, will likely consider whether to fight to get some of the money back in light of the ruling, said Judge Keith Self, who oversees the commissioner’s court.
“If the appeals court had basically said that something was not legal, what choice do we have but to try to do what’s right by our taxpayers,” said Self. Under the ruling, he said, the special prosecutors will be capped at the locally approved fees.
Paxton was supposed to go to trial in December 2017, but the appeal put his case on hold. Manny Garcia, executive director for the Texas Democratic Party, argued the delay is part of an orchestrated effort to benefit Paxton.
“The Republican Court of Criminal Appeals just shut down resources for the investigation of the Republican Attorney General Ken Paxton who is indicted on felony fraud and out on bond. This comes after Republican state lawmakers told Republican Collin County Commissioners to stop paying for the investigation. In the dictionary, this sort of behavior from government is called corruption and obstruction of justice,” Garcia said.
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