Texas Attorney General Ken Paxton has been indicted on three charges in Collin County, according to KXAS-TV NBC 5, The Dallas Morning News’ media partner.
The grand jury’s indictments were issued on Tuesday, then immediately sealed. Paxton was indicted on two counts of first-degree securities fraud and one-count of third-degree failure to register. Sources tell KXAS’s Scott Gordon they will be unsealed Monday.
According to WFAA-TV, a Tarrant County judge has been appointed to the case.
“We went into this knowing that the Texas Rangers would uncover whatever evidence was there and if there was a sufficient amount that we would present it to a grand jury, so that’s what we did,” Kent Schaffer, one of the special prosecutors assigned to the case told The New York Times. “The grand jury elected to indict, and the indictments all speak for themselves.”
The Trib fills in some details.
Kent Schaffer, one of two special prosecutors who took the Paxton case to the grand jury, told The New York Times that the indictments include three felony counts — two alleging first-degree securities fraud and another alleging a third-degree charge that he failed to register as a securities agent.
Schaffer said Paxton is accused of encouraging others to invest more than $600,000 in a company called Servergy Inc. without telling them he was making a commission and misrepresenting himself as a fellow investor. The grand jury also charged him with failing to register with state securities regulators for soliciting clients for Mowery Capital Management in return for fees.
State officials do not have to step down from office if they are indicted, but convicted felons cannot serve.
Another potential problem for Paxton is the cost of defending himself. If he were charged for something he did as a state officeholder or as a candidate, his campaign funds could be used to pay the lawyers who defend him. In the case of charges that stem from his private or personal business activities, his campaign funds are out of bounds, according to experts in state ethics laws. Paxton would have to pay for his defense out of personal funds or find some way to set up a separate defense fund that could solicit contributions on his behalf.
I doubt he’ll have too much trouble raising money to defend himself, but we’ll see how things look on Monday when the indictment is unsealed. Not too many people want to hop on board a ship that’s going down. I also doubt that Paxton will step down any time soon, as it’s much harder to raise the kind of dough he’s going to need to defend himself as a private citizen than as a statewide officeholder, but there will be plenty of calls for him to do so. Here’s the official statement from Texans for Public Justice, whose complaint last year got this ball rolling:
“The only acceptable response to today’s indictment of Attorney General Ken Paxton is his resignation. The state’s highest law enforcement officer must be held to the highest standards of conduct. Ken Paxton’s behavior disqualifies him from serving as Texas’ top cop.”
You’d think so, wouldn’t you? The real question, as Nonsequiteuse asked a month ago, is at what point will Greg Abbott begin to consider Ken Paxton a problem? How long is he going to be happy to work alongside an indicted felon? These are serious charges, and Paxton has already admitted to one of them. Up to you, Governor. Thanks to Scott Braddock for being the first to call my attention to this. The Lone Star Project, Newsdesk, and Hair Balls have more.