Paxton Punkin’ the Process

Texas Attorney General Ken Paxton is back in hot water. He’s escaped before.

Paxton has spent much of his time in public life haunted by accusations of illegal or unethical behavior, causing quiet discomfort among some Republican colleagues. He’s always held on. Will this time be different?

by Emma Platoff Nov. 11, 2020

Dumped: AG Paxton Drops Nate Paul Case Faster Than Trump Dropped Michael Cohen. Will It Save Him From Jail? – https://t.co/zIXQuo8WO0 pic.twitter.com/0Cy9hf9QKu

— LawsInTexas (@lawsintexasusa) October 10, 2020

When news broke last month that top aides to Texas Attorney General Ken Paxton had accused him of bribery and abuse of office, many in the Texas political scene were shocked but not surprised.

In a mutiny without precedent, eight of Paxton’s most senior aides told law enforcement they believed Paxton broke the law by using the agency to serve the interests of a political donor, Nate Paul. Media reports and documents have now shown four times when Paxton used his office in a way that appeared to benefit the struggling Austin real estate magnate.

Paxton’s reaction was anything but cowed: He shot back at the “rogue employees,” called their allegations false and, just over a month later, has fired four of the whistleblowers. While the nature of the attorney general’s relationship with Paul remains unclear, Paul revealed last week in a deposition that he had employed a woman at Paxton’s recommendation.

Paul said it was not a favor to Paxton. But the woman had been involved in an extramarital affair with Paxton, according to two sources who said they learned of it directly from the attorney general in 2018.

This is not the first time the state’s top lawyer, who is a co-chair of the Lawyers for Trump coalition, has found himself facing criminal accusations.

Paxton has spent much of his time in public life deflecting accusations of illegal and unethical behavior, causing quiet discomfort among some Republican colleagues and casting a shadow over an office top state officials once held and still revere. This time he has implicated not just himself, but cast into question the work of the sprawling agency, too.

The second-term Republican was indicted for felony securities fraud less than a year after he was sworn in as Texas attorney general, charges that did not keep him from winning reelection in 2018.

Beyond those charges — which he has dismissed as politically motivated and for which he has yet to stand trial — there have been other ethical red flags: a curious reversal of the state’s official position in a lawsuit involving conservatives in his home county; a bizarre intervention on behalf of a donor in another state; an ethically dubious bill to augment his power, filed by his wife, a state senator; six-figure contributions to his legal defense fund that he insists do not violate Texas’ anti-bribery laws.

A conservative culture warrior, Paxton has held on politically through it all, with fellow Republicans staying quiet or reserving judgment as he awaits a trial his team has helped delay. In 2018, he avoided a Republican primary challenger, arguably the greatest threat to an incumbent in Texas.

But this time, legal experts and political consultants say, may be different. His usual defenders are staying quiet; even his wife, state Sen. Angela Paxton, has not commented on the new allegations.

The crimes he is accused of are serious — and so are his accusers, who among them have years of service at the agency and conservative bona fides to rival Paxton’s own.

And the allegations are tied not just to Ken Paxton the individual, but to his work at an agency that has for years been one of the state’s most effective policy battering rams.

“I’ve been troubled from the beginning, from his first indictment that hasn’t been resolved in five years.I think that is a bad thing for the office, and I wish he would’ve gotten that resolved one way or another earlier,”

U.S. Sen. John Cornyn, a former Texas attorney general, said last month in an interview with Austin TV station KXAN.

Cornyn said he would reserve judgment but added,

“It is pretty dramatic when his senior staff walk out and basically file a complaint against him. That’s really unprecedented.”

The attorney general’s office was Gov. Greg Abbott’s springboard to a national profile and the governor’s mansion. Cornyn held the office, and U.S. Sen. Ted Cruz worked there as solicitor general under Abbott.

It’s been the state’s best vehicle for challenging federal policies on immigration and the environment. This week, it was the Texas attorney general’s office that asked the U.S. Supreme Court to strike down the Affordable Care Act, a policy feat Republicans in Congress could not achieve.

Now, the leader of that agency is facing fresh allegations, and the state’s law firm is hemorrhaging senior staff. But Paxton has bounced back before.

“He’s got dark clouds over him, there’s no question about it,” said Bill Miller, a longtime lobbyist and a friend of Paxton — but “never, ever count him out.”

“If you look at his career path, and his arc, he’s been down and come back up with a vengeance. So don’t count him out.”

Rise to power

An Air Force brat, Baylor class president and attorney, Paxton was elected to the Texas House in 2002 and has held public office ever since. He ran and lost as the conservative candidate for Texas House speaker, then ascended to the Texas Senate before running for attorney general.

His resume, compared with recent attorneys general, was heavier on politics than law. A graduate of the University of Virginia Law School, Paxton worked in private practice and as in-house counsel for J.C. Penney Co., but he was also focused on private business dealings. Abbott and Cornyn, his predecessors, had both served on the Texas Supreme Court.

But Paxton did have the political support of the Republican party’s right flank, and the backing of Tea Party groups in his hometown.

In 2014, as Paxton fought a bitter Republican primary for his first term as attorney general, news began to trickle out that he had violated state securities law.

In April 2014, Paxton signed a disciplinary order and paid a $1,000 fine for soliciting investment clients without being registered, as required by law. A spokesperson called it “an administrative oversight.”

Amid the heated primary campaign, the McKinney Police Association — law enforcement in his hometown — withdrew its endorsement, saying “it is necessary to protect the integrity of the AG Office.”

His opponent, Dan Branch, made ethics the centerpiece of his campaign, running advertisements that featured investors who said Paxton had misled them.

Amid the allegations, Paxton ran a quiet campaign, leaning on his support from the party’s conservative wing. He won in the primary and was elected that fall.

He was already in office in July 2015 when he was indicted on felony securities fraud charges. He is accused of persuading investors to buy stock in a company without revealing that he was making a commission, and of failing to register with the State Securities Board.

Conservative groups and a state lawmaker came to support him at his first courtroom appearance, telling media they supported him with prayers as he entered a not guilty plea.

The case has dragged on since, with battles over prosecutor pay and venue that traveled all the way up to the state’s highest court for criminal matters, sat there for months, and ended up back at the trial court. More than five years after the indictments, Paxton has yet to go to trial.

Although Democrats continue to make major hay of the charges, Paxton maintained enough support from conservatives to stay in office. Supporters compared his case to that of former Gov. Rick Perry, whose team spun the former governor’s indictment for abuse of power as a political hit job, and whose case was eventually dismissed.

With the securities fraud accusations, conservatives didn’t necessarily think Paxton was blameless — but he looked “sloppy” more than anything else, conservative political consultant Luke Macias said.

“The past accusations were more like Democrats trying to impeach Trump,” Macias said. This time is different, he said: The allegations are more serious, and they’re coming from attorneys respected on the right for their legal abilities and their conservative credentials.

A federal court dismissed a similar securities fraud charge against Paxton in March 2017, boosting Paxton’s argument that the state case was more political than criminal. And Paxton has expertly played on tactics that worked for President Donald Trump, calling the case a “witch hunt” and dismissing his detractors as political adversaries. (“Liberals abused our courts to attack Ken Paxton,” one ad declared.) He remained a strong fundraiser.

Paxton, a competitor for the title of Texas’ top culture warrior, has positioned himself close to Trump, becoming the first state attorney general to support his executive order banning travel from several Muslim-majority nations.

Their litigation agendas have often aligned on major cases like Texas’ effort to overturn the Affordable Care Act. And in public appearances, Paxton likes to tell stories about the president, like the time Trump called while Paxton was in the shower.

The securities fraud charges were at the center of Democrat Justin Nelson’s 2018 bid to unseat Paxton, but the controversy wasn’t enough to overcome Republican dominance in Texas.

Armed with Trump’s endorsement — and with hundreds of thousands of dollars from Abbott’s campaign — Paxton narrowly won a second term, and cheered on his wife as she was elected to the state Senate from a seat anchored in Collin County.

In February 2019, as one of the first bills the freshman senator filed, Angela Paxton proposed a new law that would have greatly expanded the power of her husband’s agency, including giving him power to exempt individuals from state securities law, which he is accused of violating. She characterized the bill, which did not pass and was never heard in committee, as a consumer protection measure.

The pending criminal charges have not been the only cloud over his head during his time leading the state’s law firm.

Ethics watchdogs have long been skeptical of Ken Paxton’s legal defense fund, through which he has accepted hundreds of thousands of dollars from “family friends.” State law bars elected officials from taking gifts from anyone subject to their authority, but Paxton has said the gifts are an exception.

In 2013, he plucked another attorney’s $1,000 Montblanc pen from a bin at a Collin County courthouse, returning it when the other attorney realized it was lost. The incident, which a Paxton spokesperson at the time called a simple mistake, made a prominent appearance in ad campaigns against him.

And his political and personal beliefs have more than once guided the state’s official legal position, more, critics say, than the law itself — as when the agency declined to defend a state law about end-of-life care, and refused to represent a state agency that was challenged for reprimanding a judge who refused to perform wedding ceremonies for same-sex couples.

The Texas State Bar was ordered to investigate when Paxton told county clerks — two days after the U.S. Supreme Court made same-sex marriage legal nationwide — that they could opt out of issuing marriage licenses to same-sex couples. He was never publicly sanctioned.

In 2018, after conservative activists in Paxton’s home county personally urged him to reverse the agency’s position in a lawsuit, the attorney general’s office’s brief was pulled from the case without explanation.

This spring, Paxton appeared to wield the power of his office on behalf of a political donor who was advised not to go to his Colorado vacation home while it was under local coronavirus restrictions, the Associated Press reported.

Favors for a donor?

In late October of 2018, as Paxton fought that rough reelection battle, he received a $25,000 donation from Nate Paul, a prominent real estate investor who has made headlines in recent years for a spate of bankruptcies and lawsuits from creditors — and who is now at the center of the allegations against Paxton.

Paul and Paxton are friends, but the full scope of their relationship has remained murky.

Paul revealed in a deposition last week that he employed a woman at Paxton’s recommendation, though Paul said hiring her was not a favor to Paxton. The woman had an extramarital affair with Paxton, according to two people who said Paxton told them about the affair in 2018. Paul said in the deposition he did not know the nature of their relationship.

Now, legal documents and media reports have shown four instances when Paxton used the power of his role as attorney general to step into legal matters involving Paul.

One was an unusual intervention into a case involving a charity, the Roy F. and Joann Cole Mitte Foundation, at odds with Paul in a legal dispute over some jointly owned investments.

At least three other instances of Paxton serving Paul also raised concerns for top agency brass. Paxton became personally interested in an open records dispute over what documents could be released to an attorney who worked for the same law firm as Paul’s lawyer, The Dallas Morning News first reported.

And a legal opinion from Paxton’s office — which he rushed subordinates to issue — helped Paul avoid foreclosures on properties in Austin, Plano and San Antonio, the Austin American-Statesman first reported.

But it wasn’t until another intervention, in September, that aides went to federal authorities. Paxton personally tapped Brandon Cammack, a 34-year-old Houston defense attorney, to vet a claim made by Paul that there had been wrongdoing by federal and state authorities when they raided his home and office in 2019.

An investigation by the agency, according to an internal email from the senior aides, had already shown Paul’s complaint “lacked any good-faith factual basis.”

But Paxton personally called Cammack — who legal experts say was unqualified for the bizarre and challenging role — and signed off on a $300 hourly rate for him to investigate Paul’s claims.

Mark Penley, deputy attorney general for criminal justice, ultimately stepped in to quash the subpoenas Cammack obtained for targets of Paul’s complaint.

He was one of the whistleblowers who signed on to a letter alleging wrongdoing by Paxton.

Seven of the aides made the report to law enforcement on a Wednesday, Sept. 30.

On Thursday they notified the agency’s human resources department and texted Paxton himself.

That Friday, Jeff Mateer — Paxton’s top aide for years — abruptly resigned, and Paxton put Penley on leave. The news came via a text from the agency’s human resources director, who made it clear the instruction had come from the top.

“I’ve been directed by General Paxton to let you know that he is placing you on paid investigative leave effective immediately,” Greg Simpson, the human resources director, wrote.

When the story broke in a local newspaper that weekend, Paxton’s office pointed the finger back at the whistleblowers. He dismissed several of his most senior deputies as “rogue employees” and their allegations as “false.”

And the agency’s press team went so far as to suggest that the whistleblowers themselves would be investigated.

“Making false claims is a very serious matter,” a statement from the office warned.

“A fully functioning AG’s office”

Top Texas Republicans including Abbott and Lt. Gov. Dan Patrick have called the allegations concerning. U.S. Rep. Chip Roy, a Republican who won reelection in a tight race this fall and Paxton’s former top aide, has already called on his former boss to resign.

“The Attorney General deserves his days in court, but the people of Texas deserve a fully functioning AG’s office,” Roy said.

Federal authorities have declined to say whether they are investigating Paxton, and the Texas Rangers said they referred complaints against Paxton to the FBI. But legal experts say it’s all but certain federal authorities are vetting the accusations against Paxton.

It would be “highly unusual” for federal authorities not to investigate, given the seriousness of the allegations and the presumed credibility of the accusers, said Edward Loya, a Dallas attorney and former prosecutor for the U.S. Department of Justice who handled public corruption investigations.

“That is a serious claim made by law enforcement professionals who, we expect, understand the gravity of such an accusation,” Loya said. He added that it’s unlikely any major developments would become public about the investigation for several months.

Meanwhile, the last of the eight whistleblowers, Ryan Bangert, resigned last month. Two others had already resigned, and Paxton had put one on leave and fired four others — actions that are presumed to be retaliation under the Texas Whistleblower Act, and could open up the state to massive damages in lawsuits, employment attorneys say.

Ian Prior, a political spokesperson for Paxton, said the personnel decisions were not retaliation but were instead reactions to unspecified policy violations, and, in one case, “insubordination.”
“Getting pretty brazen”

Now, Paxton sits at the head of an agency that is hemorrhaging senior staff even as its workload — a slew of election-related lawsuits, thousands of child support cases, an argument at the U.S. Supreme Court — remains heavy and urgent.

In addition to the eight whistleblowers, Paxton has lost Ben Williams, who had worked with the attorney general since his days in the Legislature and ran Paxton’s campaign for House speaker and state Senate. Williams resigned just days after the allegations were made public.

Katherine Cary, the agency’s chief of staff, was already set to retire this fall.

Marc Rylander, a longtime Paxton ally and the agency’s former communications director, left in September.

And Simpson, who headed the agency’s human resources department during the debacle, retired at the end of October.

At a senior staff meeting last month, before the whistleblowers had left or been fired, Darren McCarty, a former senior aide, asked Paxton whether the agency would stop bashing them in statements to the media. There was no response.

In an Oct. 16 letter to the Legislature, Paxton insisted that the agency was forging ahead full bore — a characterization some current and former agency staff members consider far rosier than the truth.

Some attorneys in litigation-heavy divisions of the agency fear his reputation will hurt their credibility in court.

“Any action taken by the AG’s office under General Paxton is suspect,” said Shane Phelps, who was a senior deputy at the agency under former attorneys general Cornyn and Dan Morales. The agency has to keep litigating its thousands of cases, on everything from child support to the death penalty, but now judges will “be on the lookout for any indication that it’s being handled irregularly, in any way that is coming from the top and for all the wrong reasons.”

“It has damaged the credibility and the ability of the AG’s office to further the interest of the state of Texas in court,” Phelps said, and “given all sorts of ammunition for anybody opposing the AG’s office in court to start talking about these things.”

“Something needs to happen,” Phelps said. “It sounds like he’s getting pretty brazen.”

And politically, Paxton is beginning to look like a man without a country. George P. Bush, Texas land commissioner, is exploring a run for the attorney general job, an aide said last month. The political allies who stuck by Paxton through the securities fraud allegations have largely gone quiet.

Of course, it’s possible Paxton will have left office by the time that race takes place. But a spokesperson said the attorney general “is absolutely planning on running again.”

Paxton, Prior said, “is looking forward to winning a third term and is never going to stop fighting for the people of Texas.”

Miller said Paxton is under pressure, but he’s not afraid.

“If you count this guy out, you’ve made a mistake,” he said.

Shannon Najmabadi contributed reporting.

Disclosure: Bill Miller has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.

Nate Paul’s Attorney Demands Answers from the Texas Attorney General In a Sensational Letter – https://t.co/feVVcsIQMF pic.twitter.com/so1yUyzsTe

— LawsInTexas (@lawsintexasusa) October 12, 2020