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Texas AG Ken Paxton was indicted for fraud six years ago. Will he ever face a jury?

The case against Paxton, a Republican, has been delayed multiple times since he was indicted months into his first term. The current standstill is due to an argument between the two sides over proper trial venue.

This story was first published on July 27, 2020. It is being republished on July 27, 2021 with the most recent updates from Paxton’s securities fraud case.

Texas Attorney General Ken Paxton was indicted six years ago this month.

And yet he appears no closer to trial than when he was charged with securities fraud in summer 2015. In fact, the criminal case against Paxton is now in limbo yet again. With prosecutors and defense attorneys jockeying over yet another change of venue, the case’s glacial pace raises questions about when — or whether — Paxton will ever face a jury of his peers.

In an unrelated scandal, several of Paxton’s most senior staffers last year accused him of bribery and abuse of office, alleging he swapped state secrets for favors from a campaign donor. He is now under FBI investigation based on these allegations.

Here are six things to know about Paxton’s current legal problems and the future of his political career.

1. What is Paxton accused of doing?

Paxton’s alleged crimes date back to his time as a state lawmaker. He represented parts of Collin County in the Texas House for 10 years before winning a seat in the Texas Senate in November 2012. He was elected attorney general two years later and indicted seven months into his first term.

He is charged with two first-degree felonies over allegations that he persuaded friends to invest in a McKinney technology company called Servergy Inc. without telling them he received 100,000 shares of stock. His accusers were Byron Cook, who was a Republican state lawmaker until 2019, and Florida businessman Joel Hochberg.

Paxton said he intended to invest in Servergy, too, but the CEO would not let him, telling Paxton that “God doesn’t want me to take your money.”

He also is charged with a third-degree felony, accused of funneling clients to a friend’s investment firm without being registered with the state. The Texas State Securities Board reprimanded and fined Paxton $1,000 for this failure to register in 2014.

If found guilty, Paxton could face two to 10 years in prison for the third-degree felony and five to 99 years for each of the first-degree felonies, as well as fines.

Paxton pleaded not guilty to all of the charges, saying the accusations were a partisan attack from Cook, whom, despite being a fellow Republican, Paxton once called a “political adversary.” A past spokesman said the registration issue was “fully resolved” by the securities board.

Paxton successfully fought federal civil fraud charges arising from these same allegations twice.

2. What happened in the past year?

In late 2020, several top employees in the Office of the Attorney General told law enforcement they had concerns about the relationship between Paxton and Nate Paul, a real estate developer and campaign donor. They accused Paxton of bribery and abuse of office, saying the attorney general used his official powers to repeatedly intervene on Paul’s behalf on matters at the agency involving the developer — over his staffers’ concerns.

All eight either resigned or were fired.

Four are now suing Paxton for retaliation, and have added to their accusations: They now say the attorney general wielded his official powers to help Paul, who they claim secured a job for a woman with whom Paxton was allegedly having an affair. He denies all the allegations.

Paxton is married to state Sen. Angela Paxton, R-McKinney.

In January, the Paxtons spoke at the Jan. 6 rally in Washington, DC that devolved into the attack on the U.S. Capitol. The next month, during the February freeze that left dozens of Texans dead, the Paxtons quietly left the state and traveled to Utah.

Paxton has declined to answer questions about who paid for either trip.

Paxton was reelected attorney general in 2018. He is up for election again next year.

This is the first time Paxton faces challengers within his own party, including Land Commissioner George P. Bush and former Texas Supreme Court Justice Eva Guzman, who will run against him in the Republican primary.

On July 26, former president Donald Trump snubbed Bush — who was actively courting his nod — and endorsed Paxton for a third term.

3. Who is presiding over the fraud case and where?

Four different judges have presided over Paxton’s securities fraud case in the past six years.

The first, Collin County District Court Judge Chris Oldner, a Republican, recused himself in 2015. Paxton’s lawyers then successfully ousted the next judge, Tarrant County Republican George Gallagher, in May 2017. Gallagher had just months before ordered the case moved from Collin to Harris County, a major blow to the attorney general.

Prosecutors argued such a venue change was necessary because a local jury might be biased in favor of Paxton, who has lived in McKinney for years and is well-known in Collin County. They accused Paxton loyalists in North Texas of trying to derail the prosecution, describing their efforts as a “crusade” on the attorney general’s behalf.

After the case was moved, it was randomly assigned to Harris County District Court Judge Robert Johnson, a Democrat, in mid-2017. Earlier this month, however, Johnson sided with Paxton’s lawyers and ruled the case should be moved back to Collin County.

After handing Paxton this major victory, Johnson recused himself from the case. The attorney general’s office is now representing Johnson in a lawsuit challenging the region’s cash bail system. According to Johnson’s recusal notice, “the judge’s impartiality might reasonably be questioned” if he continued to preside over Paxton’s case.

Harris County District Court Judge Jason Luong, a Democrat, got the case next — but not for long.

First, Paxton attempted to remove Luong, arguing he too was also being represented by the attorney general’s office in the same bail case. However, the court found Luong — the fourth judge to preside over the case — need not step down.

The prosecutors appealed Johnson’s decision to move the case back to Collin County in July 2020. At the end of the month, the 1st Court of Appeals in Harris County abated Johnson’s ruling, giving Luong a chance to revisit his decision.

In October, Luong agreed with his predecessor — and Paxton — that the case should be moved back to Collin County. But the prosecutors quickly moved to halt the change of venue decision. They lost their first try earlier this summer, after a Houston appeals court upheld Luong’s ruling that the case belongs back in Collin County, but have now asked the full court to weigh in.

This is where the case current sits.

3. How much has this cost?

Before the indictment, Collin County District Attorney Greg Willis, a close friend of Paxton’s, recused himself from the case. To serve in Willis’ stead, the county’s administrative judge chose Kent Schaffer and Brian Wice, two criminal defense attorneys based in Houston, as “special prosecutors” and agreed to pay them $300 an hour for their work.

The prosecutors’ hourly fees have been controversial ever since.

Collin County is on the hook to pay for the prosecution because the alleged crimes took place there. But soon after agreeing to cut the prosecutors’ first check — which topped $254,000 — county officials refused to pay them again, arguing their hourly fees were exorbitant and broke the law.

A Dallas Morning News analysis of similar cases showed $300 was on the upper end, but not unusual, for high-profile cases involving special prosecutors.

The Collin County Commissioners Court and the prosecutors took the fight to court. In November 2018, the county won. The prosecutors have not been paid for their work on the case since that first six-figure check was cut in 2016.

Paxton has raised more than $500,000 for his defense. He was investigated in 2017 under bribery and corrupt-influence laws for accepting a six-figure gift for this defense fund from a CEO whose company was under investigation by his agency. Investigators cleared Paxton and closed the investigation in October 2017.

4. Why has the case taken so long?

In addition to the yearslong fight over how much the prosecutors should be paid, Paxton’s defense team spent more than a year attempting to have the charges against their client thrown out. They failed. The prosecutors slowed the case by moving it out of Collin County.

Each side blames the other for dragging out the fight.

“This case has gone on far too long — five very long years. The vast majority of that delay has been caused by the Special Prosecutors,” Bill Mateja said in a statement on behalf of Paxton’s defense team in July 2020. “The Special Prosecutors need to let stand Judge Johnson’s decision to transfer the case back to Collin County, dismiss their appeal of that decision and let Mr. Paxton have his day in court.”

The prosecutors, in turn, point the finger at Paxton’s attorneys.

“The assertion that we are somehow responsible for ‘the vast majority’ of the five-year delay in this matter is disingenuous and demonstrably false,” Wice said in a statement in July 2020. At that time, he had counted the number of months delayed by each side and came up with 24 for the prosecutors and 36 for the defense.

“These numbers don’t lie: Paxton was responsible for three of the five year delay. If Paxton truly wanted his day in court, he hasn’t acted like it,” Wice added.

Michael McCrum, who served as a special prosecutor on the abuse-of-power case against former Gov. Rick Perry, said he’s never seen a case like this be so drawn out.

“I can’t think of one that is as egregious as the Paxton situation,” McCrum said in July 2020. “It is horribly too long.”

5. When will this all be over?

Political insiders and prominent defense attorneys said they expected the case will go to trial, although some acknowledged there’s a chance the two sides could agree to a deal.

“Eventually they’ll wear themselves out,” said Toby Shook, a lawyer who served as a special prosecutor in the 2013 slaying of the Kaufman County district attorney. Shook added that it would be unlikely for a deal to include Paxton admitting to any wrongdoing. “That’s probably the only way it could get resolved short of a trial.”

Dick DeGuerin, who defended ex-U.S. House Majority Leader Tom DeLay against accusations of money laundering, said it took about five years to get that case to trial. If the Paxton case goes in front of a jury, he anticipated it won’t be soon.

“It’s going to be a year, at least,” DeGuerin said, noting that COVID-19 could extend the wait.

But Bill Miller, a longtime lobbyist who considers Paxton a friend, said the attorney general should put the allegations behind him before his next re-election campaign.

“Five years is too damn long,” Miller said in July 2020, pointing out that Paxton’s term is up in 2022. “I can’t imagine that seven years will pass before he enters a courtroom. That’s unimaginable to me. That would be a crime unto itself.”

In This Story

Lauren McGaughy. Lauren is an investigative reporter based in Austin where she focuses on government accountability, criminal justice and LGBTQ issues. Before joining the investigative team, she covered Texas politics for The News and Houston Chronicle, and Louisiana politics for The New Orleans Times-Picayune. She loves cats and comic books and cooks a mean steak.

lmcgaughy@dallasnews.com /laurenrmcgaughy @lmcgaughy https://www.instagram.com/laurenmcgaughy/ LinkedIn Iconhttps://www.linkedin.com/in/lauren-mcgaughy-05b49812/
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