Still a crook any way you look
In 2019, hostile attorneys questioned Texas Attorney General Ken Paxton about his conduct as a lawyer: Had he turned over a former client’s communications to an attorney suing that client?
Paxton acknowledged that he had, one of the nuggets in an old deposition, viewed by The Wall Street Journal, that sheds new light on his legal behavior, past business dealings and blind trust that has shielded his rapidly expanded assets.
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Paxton, in his second term, was made to sit for the six-hour questioning for a lawsuit involving a falling-out between two of his former friends. Charles Loper III, trustee of Paxton’s blind trust, sued Byron Cook, a former business associate, claiming fraud by Unity Resources, an energy investment company. Paxton wasn’t a defendant in the suit, but was Unity’s former lawyer, board member and investor.
The deposition marked a rare instance of Paxton being made to answer questions under oath. It remained effectively sealed when the case’s judge, a donor to Paxton’s wife, state Sen. Angela Paxton, delayed ruling on its sealing for more than four years until the case was settled in 2023.
Attorneys pressed Paxton on having given Unity records to his own attorney Mitch Little—who was also representing Loper in suing Unity—but not to Unity itself.
“I’m sure I did,” Paxton said of giving the communications to Little, saying that he had done so to see if they were privileged.
Legal ethics experts declined to read the deposition because it is under a protective order, but said giving former client communications to anyone—especially someone suing the client—is a violation of attorney-client privilege. And, records belong to the client and can’t be withheld, they said.
“That’s a violation on his part on two counts,” said Randy Johnston, a Dallas lawyer specializing in legal malpractice.
Little, a Republican Texas state representative, disputed that the records he received were privileged and said there was no conflict of interest. Paxton said in the deposition that he saw no issues with the conflicts of interest raised. He testified that he probably no longer had the “old computer” containing Unity’s records.
Paxton’s early investments have gotten attention amid the Senate campaign. The Journal found that he went from being a middle-class lawyer to a multimillionaire during two decades on a public official’s salary.
In this case, records indicated that Paxton, who represented Unity from its formation in 2008 until around the time he was elected attorney general in 2014, received 2.5% interest in Unity in exchange for providing legal services, and an additional 4.5% for a $50,000 investment. Attorneys also asked about records suggesting Paxton received $500,000 in investments to help generate investment leads.
Paxton said he didn’t recall receiving interest in exchange for his legal work and didn’t recall soliciting other investors. “It doesn’t sound like something I did,” he said.
Some 90 times during the deposition, Paxton said he couldn’t remember the answer to a question. He didn’t recall his own prior role in Unity, forming the company, or the purported fraud, which involved inflating the value of flipped mineral acreage.
At several contentious moments, Paxton declined to answer questions seeking to draw a parallel between his work at Unity and his then-pending securities-fraud case, in which he was accused of recruiting Cook and others to invest in a tech company without disclosing that he received compensation to do so. Paxton settled the charges, paying nearly $300,000 to Cook and the other accusers.
At one point, he said he didn’t recall details of his biography posted on the attorney general’s website. “I don’t remember all of these awards,” Paxton said.
Here’s a bit of background on the lawsuits involving Byron Cook and Charles Loper. It references a deposition Paxton was ordered to sit for in 2022, while this story is about one from 2019. I’m not sure I knew about that. How Paxton made all his money while earning a government salary is another question we’ve pondered before; that post references some previous reporting by the Wall Street Journal. Kudos to them for keeping that ball rolling. We’re not going to get enough answers before the next elections, but we know more now than we did before. Except for Paxton himself, who seems to have forgotten it all. There are probably supplements that can help with that, Kenny.