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UT and OU make it officially official

Smell ya later, Big XII.

After a week of speculation, the University of Texas at Austin announced Tuesday that alongside the University of Oklahoma it has asked to join the Southeastern Conference starting July 1, 2025.

The news came a day after both schools announced they would not renew their media rights contract with the Big 12 in 2025. If the two schools were to join the SEC, they would join the likes of top football schools such as University of Florida, Louisiana State University and the University of Alabama.

“We believe that there would be mutual benefit to the Universities on the one hand, and the SEC on the other hand, for the Universities to become members of the SEC,” UT President Jay Hartzell and OU President Joseph Harroz, Jr. said in a joint letter to SEC Commissioner Greg Sankey.

Sankey said in a statement that while the SEC hasn’t actively pursued new members, it will welcome change when there is consensus among members.

“We will pursue significant change when there is a clear consensus among our members that such actions will further enrich the experiences of our student-athletes and lead to greater academic and athletic achievement across our campuses,” Sankey said.

The move leaves the rest of the Big 12 conference, which includes Texas Tech University, Baylor University and Texas Christian University, in a state of uncertainty. Monday afternoon, Big 12 Commissioner Bob Bowlsby said in a statement that the remaining eight institutions will work together to ensure future success.

“Although our eight members are disappointed with the decisions of these two institutions, we recognize that intercollegiate athletics is experiencing rapid change and will most likely look much different in 2025 than it does currently,” Bowlsby said. “The Big 12 Conference will continue to support our member institutions’ efforts to graduate student-athletes, and compete for Big 12 and NCAA championships.”

The Monday news was about saying goodbye to the Big XII, or at least saying that they wanted to say goodbye. This is about saying Hello to the SEC, which one presumes will be returned in kind. I suppose it’s possible that things could go pear-shaped from here, but that would be a huge upset. Most likely, if you’re a Longhorn or Sooner, get ready to start shelling out for new SEC-branded gear.

A personal anecdote: Back in 2003, during the long special session slog to re-redistrict Texas on Tom DeLay’s orders, Rice played UT in a football game at Reliant Stadium. I contributed a bit to the MOB halftime script for that show, which was about the redistricting saga and how we should never leave the task of redistricting to politicians. “After all,” the bit concluded, “the last time the Governor got involved with redistricting, Baylor wound up in the Big XII”. It got a big laugh from the mostly UT fans. Seems like the joke holds up pretty well all these years later.

There is of course political involvement in this round of Conference Bingo, and so naturally our state’s biggest self-promoter has rushed out to the front of the parade in hope of being mistaken for a leader.

Lt. Gov. Dan Patrick has asked Sen. Jane Nelson to chair a new select committee on the “Future of College Sports in Texas,” a move that came hours after Texas and Oklahoma issued a joint statement to the Big 12 that served as the first step toward leaving the conference.

In a tweet sent out Monday night Patrick said the committee’s purpose would be to “study the athletic & economic impact to TX schools & communities by UT’s exit.” A hearing is scheduled for Aug. 2.

This is just the latest bit of political theatre in the face of the state flagship’s impending departure from the Big 12, a conference it founded in 1994 that currently includes four Texas-based members: UT, Baylor, TCU and Texas Tech.

Hey, Dan, let me know when you plan to have a hearing to fix the grid and claw back some of the money that was heisted from way too many paying customers from the freeze.

UT and OU make their official move to exit the Big XII

It’s just a matter of time now. And money. Always money.

The University of Texas at Austin announced Monday morning that it will not renew its sports media rights contract with the Big 12 that is set to end in 2025, giving the first formal signal that it’s planning to leave the athletics conference.

The decision comes after rumors surfaced last week that UT-Austin and the University of Oklahoma would leave the Big 12 and join the Southeastern Conference, which would then include 16 schools.

The move was announced in a joint statement from UT-Austin and Oklahoma.

“Both universities will continue to monitor the rapidly evolving collegiate athletics landscape as they consider how best to position their athletics programs for the future,” the statement read.

[…]

The financial impact on the [remaining] schools could be devastating. Records show that media rights represent the single largest income stream for Texas Tech athletics. Its total athletics revenue during the 2020 fiscal year was $90.4 million, meaning the Big 12 payouts accounted for more than one-third of its total earnings.

That major-conference money helped allow it to limit the amount of money the university transfers into its athletics department to under $50,000. Public universities outside of major conferences in Texas have been known to funnel millions into their athletics programs to keep the departments afloat. (TCU and Baylor are private schools, and their financial numbers are not public.)

See here for the previous update. I’m old enough to remember that one big reason why the old Southwest Conference fell apart is that some schools thought some other schools were not pulling their weight in terms of financial reward for the conference as a whole. (A broader geographic appeal, and thus bigger potential TV audiences, was another significant factor.) Speaking as a Rice Owls fan, I feel your pain, Texas Tech and Baylor. Sucks to be on the other side of that, doesn’t it?

Sources from the Big 12 told ESPN that Monday’s statement from UT and OU doesn’t fully guarantee that the schools remain in the Big 12 through 2025. There is the possibility that they can pay a penalty of more than $75 million for leaving the league early and give a required 18 months’ notice, per Big 12 bylaws.

There is also speculation that OU and Texas would also not be bound by the Big 12’s contract if the conference dissolves before 2025, according to the publication. If the future of the Big 12 conference is in doubt, other schools could also look elsewhere for a landing place.

I for one would bet on UT and OU making their exit from the Big XII well before 2025. All of the previous breakups, starting with Arkansas leaving for the SEC in 1990, happened within a year. Whatever the contract terms are now, UT and OU will have plenty of incentive to buy their way out of them, and the remaining schools will ultimately take the cash as a preferable option to uncertainty and a hell of a lot of awkwardness. I will be shocked if UT and OU aren’t fully integrated into the SEC by the start of the 2023 football season, and it would not surprise me if they’re there for 2022. That’s the world we live in. The Chron and Slate, which runs some financial numbers, have more.

The A&M and AAC responses to UT and OU and the SEC

Moving from denial to bluster.

Texas A&M athletic director Ross Bjork has a message for any newcomers to the Southeastern Conference: “We’re ready.”

Texas and Oklahoma are preparing to exit the Big 12 and join the SEC, just as A&M did nearly a decade ago. The Longhorns and Sooners are expected to inform the Big 12 this coming week and begin preparing for their pending exits — and how soon they join the SEC (whether by 2022 or as late as 2025) is to be determined.

“We believe that throughout our time in the SEC, Texas A&M has become stronger than ever,” Bjork told the Houston Chronicle on Saturday. “We’re the largest university in Texas and in the SEC. We have 550,000 former students. We’re knocking on the door of the College Football Playoff, and our women’s basketball team is the reigning SEC champion. We’ve got so many Olympians. There are so many great things and strengths about our program.

“As you look at all of this and our landscape, our position is, ‘Who wouldn’t want to join?’ The SEC is in the best position to lead in this transformative time in college athletics, and obviously there are others wanting to join us in that journey. Here in Texas, we’ve paved that way, and we’ve been leading that way over the last 10 years.”

A&M and other SEC programs apparently were largely kept out of the loop on informal discussions among UT, OU and the SEC in recent months, and Bjork said A&M is addressing that with the league.

“Those conversations are being had … there are definitely procedural matters that need to come forward, and those things are being discussed,” Bjork said.

A&M is pivoting from its early stance when the Chronicle broke the news on Wednesday at SEC Media Days that UT and OU intended to join the powerful conference.

See here, here, and here for the background. I can’t blame A&M for feeling blindsided by this, but their first mistake was in thinking that anyone outside Aggie Nation cared. It’s all about the money, y’all.

I also found this amusing.

Back in summer 2016, schools from the so-called Group of Five lined up to make elaborate pitches to join the Big 12.

For three months, the University of Houston was among the reported favorites, along with Cincinnati, to join the Big 12. It would have been a monumental moment for Houston, which has long desired a seat at college football’s table of power brokers — and the exposure and lucrative payout that come with it.

It all turned out to be a three-month charade. The Big 12 eventually decided against expansion. Tilman Fertitta, UH’s deep-pocket board of regent chairman, blasted the process, calling it “a total sham” … “PR play” … “biggest ramrod, railroad, ever.”

Five years later, conference realignment is back on the table. This time it’s not just talk. As early as this week, Texas and Oklahoma are expected to declare their intention to leave the Big 12 for the SEC.

That once desirable Big 12 destination that had schools tripping over each other for admission like a sold-out concert. Not so desirable anymore.

And once on the verge of being raided, the AAC could open its doors to some, if not all, of the eight remaining teams from the Big 12, a group that includes Baylor, Texas Tech and TCU.

The AAC will not take a wait-and-see approach and instead will be aggressive in pursuit of the Big 12’s leftovers, an industry source confirmed Saturday. The Athletic was the first to report the AAC’s intentions.

For what it’s worth, in my previous update I linked to a Yahoo News story that suggested it would be the diminished Big XII that would be aggressive in courting AAC schools to join them. That has been the normal flow of events in the conference-hopping game, though one must admit that “Big XII minus UT and OU” is a lot less formidable, and maybe not so much bigger or grander than the AAC or the Mountain West. I just enjoyed the Mouse That Roared energy from this story. Maybe it plays that way and maybe it doesn’t, but I suppose there’s no harm in assuming one is now on equal terms with a former big boy. Where it stops, nobody knows.

One more with UT, OU, and the SEC

It’s happening. I know, it’s early, and there’s resistance, and stuff can happen, but come on. It’s happening.

Texas and Oklahoma are prepared to inform the Big 12 they will not renew their media rights agreement with the league when the current deal expires in 2025, a conference-shattering move that could come as early as Monday morning.

A Big 12 source confirmed both the Longhorns and Sooners are preparing to break from the league they helped found in 1994. The Chronicle reported on Wednesday that the schools had discussed a move to the SEC and that an announcement could come in the next few weeks. Declining to extend or negotiate a new media rights agreement (first reported by Dallas television station WFAA) with the Big 12 and providing notice of intent to withdraw to will allow Texas and OU to formally begin the process of aligning with a new conference.

But Texas and Oklahoma would still be bound by the grant of rights, which bestows the schools’ first- and second-tier media rights to the Big 12. If Texas and Oklahoma exit prior to June 30, 2025, when that agreement expires, the Big 12 gets to keep the TV money a school generates even after it leaves.

Withdrawing members are also obligated to pay a commitment buyout fee. That amount is equal to conference media rights distributions that would otherwise have been paid out to the program(s). The Big 12 distributed $34.5 million each to its 10 member schools during the 2020-21 fiscal year, a $3-million drop from the previous year due to effects from the COVID-19 pandemic. Big 12 commissioner Bob Bowlsby believes distributions could jump to $40 million or more next fiscal year, which could make Texas’ potential buyout hit $80 million.

Even with all the potential obstacles – Texas A&M’s fervent objections, vitriol from the rest of the Big 12, an effort by some Texas and Oklahoma representatives to turn conference realignment into a legislative issue – the belief is Texas and Oklahoma are bound for a new conference sooner rather than later.

See here and here for the background, and here for the WFAA story. The money issue will work itself out one way or another, even if it is just a matter of waiting until the current agreements expire. I suppose that might give the legislators now frantically filing bills and making unanswered phone calls to Greg Abbott some time to throw up obstacles to UT, but I don’t believe there’s a force in this world that will stop the money train. Nothing ever has.

Assuming this does happen – and you should be – there will be massive ripple effects throughout the rest of the NCAA, just as there were a few years ago when we last went through a big round of inter-conference shuffleboard.

Expect the Big 12 to be aggressive in adding schools. It’ll knock on doors at Arizona and Arizona State. Perhaps it’ll try and lure Colorado back and pry Utah. The Pac-12 is weak now, but the core of USC, Oregon, UCLA and Washington are all more attractive to be aligned with than any of the Big 12 schools.

From there, the Big 12 will decide how big it wants to get. It has to decide whether to add two, four or six schools. Four seems like the most reasonable number, with Cincinnati, UCF, USF, BYU and Boise State the most likely candidates from outside the state of Texas. The potential addition of Houston and SMU becomes complicated, as Baylor, TCU and Texas Tech wouldn’t have much interest in more in-state competition.

Remember, it’s streaming subscriptions, not cable boxes, that matter most. BYU would appear to have the best option for that, with its national following. But BYU is always complicated, which prevented the Big 12 from adding it in 2016 when the Cougars’ complicated LGBTQ history became a factor.

UCF and USF have great markets, but would the Big 12 want two Florida footholds? Cincinnati is a preseason Top 10 team that has been working hard behind the scenes to build for this moment. It also brings a big market and fertile recruiting area.

This is all sub-optimal for the American Athletic Conference, as it’ll be a familiar trickle-down. In a similar food chain fallout that followed the ACC cannibalizing the Big East a decade ago, the Big 12 will go after the most attractive AAC candidates. The AAC will do its best to hold on to its top programs but a reconstructed Big 12 without Texas and Oklahoma should offer a more attractive financial landing spot than the current AAC.

[…]

The ACC is in a difficult spot because it ate a bad deal from ESPN to get a linear network. Now it is frozen for two decades in an antiquated agreement, as the ACC gives schools more than $32 million per year.

[ACC Commissioner Jim] Phillips needs to do something dynamic to blow up that deal and get back to the bargaining table. Those options are limited, and ESPN isn’t going to be eager to give up a sweetheart deal on its end.

The loss of Texas as an option is a huge blow to the ACC’s ambitions, as multiple sources indicated that the ACC was caught by surprise Wednesday. The ACC’s other big play was Notre Dame, but the league failed to use any leverage it had on Notre Dame as a quasi-member the past few years. The new College Football Playoff proposal doubles as a security blanket for Notre Dame’s independence, which means little incentive for it to find a league home. Especially with its own lucrative TV deal coming.

The best remaining option for the ACC will be some type of scheduling arrangement or merger with the Pac-12. And that hints at another potential ripple from this move – is this going to be remembered as the pivot point toward super conferences?

There has long been a notion in college athletics that the Big Ten and SEC were pulling away from all the other leagues because of the financial success of their networks and the corresponding success on the field. Now, the Big Ten will go to market without the adrenaline jolt that the SEC got in its deal. The only corresponding move the Big Ten could make would be a play for Notre Dame, but that remains unlikely because of how secure Notre Dame’s future is in the new football playoff.

The issue for the Big Ten would be that Ohio State is isolated as the league’s power. Could the Big Ten leverage the potential of its next deal with a move to answer, adding Virginia, Georgia Tech, Florida State, North Carolina and Clemson to cover the league’s Eastern flank and fortify the Interstate 95 corridor? There will be pressure on Warren to be bold. But the ACC is protected by a grant of rights through the length of its TV deal.

“It’s about combining forces now,” said a high-ranking college official. “Who teams up with who? Do we end up with four leagues? Do we end up with three? Or do we go to a 32-team NFL model. This is going to be earth-shattering.”

[PAC 12 Commissioner George] Kliavkoff joked on Twitter about his active first month as commissioner getting more interesting. The Pac-12 is last in line to go to market, and there’s a feeling that it needs to do something creative. There’s still great value in the West Coast, even if the football has been subpar for the past five years. But this move, the Big Ten deal and an upcoming deal for Notre Dame potentially put the Pac-12 in a position of weakness thanks to a lack of suitors.

The ripples of this potential SEC deal will be felt from coast to coast. And it’s not good news for any of the other leagues because of how much ESPN oxygen this sucks up. As one industry source put it: “The current schools in the SEC wouldn’t agree to this if all of a sudden their games are relegated to ESPNU. It’s not just money, it’s exposure.”

The ACC, PAC 12 and Big 10 all have new commissioners whose jobs just got a lot more stressful. New Big 10 Commissioner Kevin Warren had his first media day after the UT/OU story broke, and that subject was a big part of the conversation. I have no idea what’s going to happen, but assume that whatever the college football world looks like now – and as that Yahoo story notes, this is entirely driven by football, with basketball at best an afterthought – it will be different soon. If your school isn’t part of the action, it’s being left behind. I don’t make the rules and I don’t like it any more than you do, but that’s how it is.

Some legislators want to keep UT out of the SEC

This is kind of hilarious.

As the college athletics world roils over the possibility of the University of Texas and the University of Oklahoma leaving the Big 12 conference, a group of Texas legislators with ties to other universities in the state has mobilized.

Four prominent lawmakers — one each with ties to Baylor University, Texas Christian University, Texas Tech University and Texas A&M University — met with Gov. Greg Abbott’s staff Thursday, one day after news broke that UT and OU had reached out to the Southeastern Conference about joining, according to a source briefed about the meeting and an Abbott spokesperson. Abbott is a UT alumnus and outspoken Longhorn fan.

The four lawmakers were Rep. Greg Bonnen, R-Friendswood, who chairs the influential House Appropriations Committee and attended Texas A&M; Rep. Dustin Burrows, R-Lubbock, who received his law degree and MBA from Texas Tech and chairs the powerful House Calendars Committee; Rep. Jeff Leach, R-Plano, who chairs the House Committee on Judiciary and Civil Jurisprudence and was a student body president at Baylor; and Sen. Lois Kolkhorst, chair of the Health and Human Services Committee and a former TCU athlete. Kolkhorst declined comment and the other three lawmakers did not immediately respond to requests for comments Thursday evening.

Leach and Burrows have already expressed their concern about a potential move on social media, with Leach saying on Twitter that he was “working on legislation requiring legislative approval for UT to bolt the BIG XII.”

“This is about much more than college sports,” Leach wrote. “The impact UT’s decision would have on communities & businesses all across Texas would be real, substantial and potentially devastating. On behalf of those concerned Texans, the Texas Legislature has an obligation to be involved.”

See here for the background. Nothing is happening in the Lege right now, for obvious reasons, and one wonders what motivation “outspoken Longhorns fan” Abbott would have to stop his alma mater from making this move, since he’d have to add the item to the next special session agenda. For sure, if UT and OU leave the Big XII it will consign TCU, Baylor, and Texas Tech to a diminished future, but that’s a result of longtime forces in college sports. Their foundation wouldn’t be any firmer, they’d just be holding off the tide for another day. Speaking again as a fan of a team that was left behind in the 90s, I understand their fears, but by the same token since they were among the leavers, I trust you’ll forgive me if I don’t rush to sympathize. Sean Pendergast, Jerome Solomon, and the Chron have more.

UPDATE: There’s now a bill to effect this end, HB298. If it gets added to the call, and if there’s a quorum when that happens, then maybe that has a chance. Don’t hold your breath.

UPDATE: I’m dying:

Sources: Gov. Abbott not returning calls from top Republicans in the Texas Legislature about UT trying to head to the SEC

Republicans like Chairman Dustin Burrows and Chair Brian Birdwell have filed bills to block UT from changing conferences, but of course that’s not on the special session agenda. The governor’s office has gone quiet.

There’s been a real distinct lack of high comedy this legislative season. I want to thank the universities of Texas and Oklahoma for providing the opportunity to bring a little of that back.

Are the college conference dominoes set up for a tumble again?

This would be a big deal.

A decade after major conference realignment shook up college football, big changes might again be on the horizon.

Texas and Oklahoma of the Big 12 have reached out to the Southeastern Conference about joining the powerful league, a high-ranking college official with knowledge of the situation told the Houston Chronicle on Wednesday.

An announcement could come within a couple of weeks concerning the potential addition of UT and OU to the league, the person said, which would give the SEC 16 schools and make it the first national superconference.

“Speculation swirls around collegiate athletics,” UT responded in a statement Wednesday. “We will not address rumors or speculation.”

OU, in its own similar statement, offered: “The college athletics landscape is shifting constantly. We don’t address every anonymous rumor.”

[…]

Another person with knowledge of the schools’ interest in jumping to the SEC said it could be the first step in the long-awaited break between haves and have-nots in the college sports world. Most of those scenarios have involved four superconferences of 16 schools each, but the observer said the eventual winnowing down could result in an NFL-like scenario with as few as 20 to 30 schools in the top tier.

The eventual impact, the second source said, could be the biggest change agent in college sports since the 1984 court decision involving Oklahoma and Georgia that allowed schools to market certain media rights without being limited to conference-only agreements.

“You’re going to see shifts happen like they’ve never happened before,” he added, “but it’s not going to happen for another three years.”

The recent developments in athletics (possible expansion of the college football playoff) and legal circles (players’ ability to profit from their name, image and likeness) are leading Oklahoma and Texas to consider moves based not on regional or competitive ties but on economic forces.

The Big 12’s TV contract with ESPN and Fox expires in 2025. Texas Tech president Lawrence Schovanec said in May that the two networks had declined to discuss extending the contract past 2025.

“The general result is that, at this time, with so much uncertainty in the media marketplace as well as the landscape for collegiate athletics, our partners, ESPN and FOX, are not interested in acting preemptively with regard to our contract,” Schovanec told the Lubbock Avalanche-Journal in late May. “They recognize the importance of our partnership, but there’s just too much uncertainty, and they do have four years to go.”

As colleges face new challenges with name, image and likeness reforms and the recent Supreme Court decision that cast doubt on the NCAA’s beloved “student-athlete” model, the second source said, more powerful schools will seek to protect their economic base by flocking to like-minded superpowers.

“Schools have worked so hard to hide the fact that the collegiate game is nothing but the NFL hiding behind the veil of education,” the second source said. “Sports is mirroring what is happening in the broader context of society. It is not exempt from the same forces that affected K-mart or Blockbuster, who enjoyed success but were not able to change. To survive, you have to be able to change in real time.”

As the story notes, it’s been nine years since Texas A&M and Missouri left the Big XII for the SEC; Nebraska and Colorado also departed the conference, for the Big 10 and the PAC 12, respectively. A&M’s athletic director is quoted in the story as being unfavorable to the idea – basically, A&M got there first and they deserve to have the SEC to themselves – but I doubt that will carry much weight in the end. Money talks, and UT and OU represent a lot of it.

If this happens, and I’m inclined to believe it will, we will wind up with a vastly different college athletics landscape in short order. For one thing, the Big XII will lose pretty much all of its glamour, and may well end up on the outside looking in when that “four 16-team superconference” world comes into existence. (On the plus side, UH might finally get accepted into the Big XII.) As a longtime fan of a school that’s never going to be more than cannon fodder in this world, I’m not interested in the palace intrigue of it all. You have to be able to handle a lot of cognitive dissonance to be a college sports fan. The recent NCAA ruling over “name, image, likeness” rights makes things a little better for the athletes themselves, but this is never going to be an equitable world. You make your peace with it or you find some other thing to occupy your Saturdays in the fall and weekends in March. ESPN and Texas Monthly, which is warming up the death knell for the Big XII, have more.

The ultimate inducement to getting vaccinated

Winning college football games. I mean seriously, if that doesn’t do it then literally nothing will.

SEC commissioner Greg Sankey calls it the “vaccination motivation” — in urging the league’s programs to receive the COVID-19 vaccination before the season kicks off in a little more than a month.

“Let me be clear to our fans, to our coaches, to our staff members and to our student-athletes: COVID-19 vaccines are widely available,” Sankey said to crank up SEC Media Days on Monday. “They’ve proven to be highly effective. And when people are fully vaccinated, we all have the ability to avoid serious health risks, reduce the virus’s spread and maximize our chances of returning to a normal college football experience, and to a normal life.

“With six weeks to go before kickoff, now is the time to seek that full vaccination.”

Sankey, speaking on the first day of the four-day event and the first SEC Media Days in two years because of the pandemic, said six out of the SEC’s 14 football teams “have reached the 80 percent threshold in roster vaccination.”

“That number needs to grow, and grow rapidly,” Sankey said. “We have learned how to manage through a COVID environment, but we do not yet have control of a COVID environment, and that finds us preparing to return toward normal this fall, but we see realities around us.”

[…]

Sankey added, “The ‘forfeit’ word comes up at this point,” after the league last season left a cushion in December to allow for makeup games. That likely will not be the case this year. A&M is scheduled to kick off its season Sept. 4 against Kent State at Kyle Field, and Sankey said all early signs are the SEC’s season will not be pushed back a few weeks (and shortened to league-only contests) like it was in 2020.

“You hope not to have disruption, but hope is not a plan, goes the cliché,” Sankey said. “We (for now) still have roster minimums that exist, just like last year. What I’ve identified for consideration among our membership is we remove those roster minimums, and you’re expected to play as scheduled. That means your team needs to be healthy to compete, and if not, that game won’t be rescheduled.

“ … We’ve not built in the kind of time we did last year, particularly at the end of the season, to accommodate disruption. Unless we’re going to do that, our teams are going to have to be full prepared to play their season as scheduled.”

I’ll get back to the SEC in a minute, but at least one conference is using the word “forfeit”.

The American Athletic Conference has had conversations in the past week that would require teams without enough healthy players due to COVID-19 to forfeit games this season.

“It’s not decided yet, but it’s likely,” Houston athletic director Chris Pezman said recently during an appearance on SportsTalk 790 AM.

Few FBS teams dealt with COVID-19 disruptions as much last season as Houston, which had eight games either canceled or postponed. UH officials were particularly upset with the short notice given by Baylor, which called off a game less than 24 hours before kickoff and the Cougars’ equipment truck already in Waco.

The eventual season opener against Tulane was delayed until Oct. 8, a delay of more than a month.

A similar measure to force teams unable to field enough healthy players to forfeit has also been discussed with the Big 12.

“The COVIDing out and the gamesmanship that went into that, make no mistake that occurred this last year,” Pezman said. “You’re going to end up forfeiting.”

Lots of teams played incomplete schedules last year, with many games being delayed or canceled because one team or the other didn’t have enough healthy players. If the idea this year is for things to go back to “normal”, then teams need to ensure they can meet minimum roster requirements. The best way they can do that is to make sure that they don’t have COVID outbreaks, and we all know what they best way to do that is. Stuff can still happen – the recent outbreak with the Yankees, where over 85% of their team and staff are vaxxed, is an example – but the odds are much better in your favor this way.

Obviously, the number of people in scope for this is small, but it just might spread outward a bit. Imagine if coaches forbade the fat cat donors from hobnobbing with the teams if they’re not vaxxed, for example. Whatever the case, every little bit helps. And hey, if the ol’ ball coach says get your shots, who’s gonna say no?

UPDATE: Not just college football.

The NFL has added an additional COVID-19 vaccination incentive for players, threatening forfeits and the loss of game checks if an outbreak among unvaccinated players causes an unresolvable disruption in the regular-season schedule.

Commissioner Roger Goodell informed clubs of the new policy Thursday in a memo. The league has encouraged vaccination for players but has not required it, per an agreement with the NFL Players Association.

Instead, the league has set up a series of incentives. As of Thursday, Goodell wrote, more than 75% of NFL players were at least partially vaccinated and more than half of the league’s teams have player vaccination rates above 80%.

Unvaccinated players will be subject to severe protocols during training camp and the regular season, including daily testing, mask-wearing and travel restrictions. Thursday’s memo made it clear that unvaccinated players could, in theory, be responsible for the losses of games and paychecks as well.

You can be free to make your own choices about the vaccine if you really insist, but that doesn’t mean you’re free from the consequences.

Coronavirus and college sports update

What life is like for Texas’ college football teams.

In the world of COVID-19-era college football, Sunday is a day not for resting but for testing.

Each Sunday this fall brings a new set of checklists and guideposts that players and staff members must negotiate before they can think about playing, let alone winning, on any given Saturday.

It has not been a uniformly smooth road for Texas’ 12 Football Bowl Subdivision teams. Nine of the 12 have had at least one game on their revised schedules affected by their own positive COVID tests or those of an opponent.

This weekend alone, Texas A&M and Rice were idle because their games against Tennessee and Louisiana Tech, respectively, were postponed as college football enters the final month of its truncated, delayed regular season. Nationally, 15 games were postponed or canceled this weekend.

But with the exception of Rice, which delayed its season opener into October, each of the 12 Texas schools will exit this weekend having played at least a half-dozen games, which speaks to their success in maintaining the discipline required for success and health.

“We’re asking 18- to 22-year-olds in the most social time of their lives to be more mature than many adults are being,” said Baylor athletic director Mack Rhoades. “They’re doing a pretty darn good job of following the rules and being disciplined.”

A month remains, though, in which things can go awry quickly.

“We can’t let our guard down,” said Texas A&M athletic director Ross Bjork. “We can’t get too comfortable, especially with our communities surging right now. But everyone has done a great job.”

While each of the five conferences represented by the 12 Texas schools — the American Athletic, Big 12, Conference USA, Southeastern and Sun Belt — have their own weekly procedures, all are on the same approximate schedule.

You can read on for the details, but basically it’s testing on Sunday and at least one other day, contact tracing and quarantining anyone who was in contact with someone who tested positive, coordinating with the visiting teams, and so on. With the exception of Texas State, every school that is playing football has had at least one game postponed, with those that had scheduled non-conference games having them mostly or all canceled. I’ll be honest, this has gone better than I expected in terms of getting the games played – the effect of the outbreak in the towns that have these universities is another story, but that’s about more than just the games – though the wisdom of doing this at all seems to have been accepted regardless of the outcome. I think we’re going to be debating that for a long time.

Meanwhile, this is the time of year when college basketball normally gets underway. Suffice it to say, there are challenges. At least football is played outdoors, where some of the COVID risks can be minimized. If there’s going to be basketball of any kind before a vaccine is fully rolled out, I don’t see how it can be done with fans in the stands. We’ll know what they’re up to soon.

College sports roundup

Southland Conference postpones fall sports.

After much deliberation, the Southland Conference has postponed league competition in all of its fall sports with the intent of playing a football season in the spring of 2021 due to concerns over COVID-19.

The Southland will, however, allow teams to play nonconference games if they choose.

Houston Baptist, for example, plans on playing its three scheduled nonconference football games this fall, including at Texas Tech. HBU’s other nonconference opponents are North Texas and Louisiana Tech.

The Huskies also will participate in nonconference games in volleyball and women’s soccer.

[…]

Sam Houston State will not try to play any sports in the fall, but Stephen F. Austin said it would.

HBU will play three opponents (North Texas, Texas Tech, and Louisiana Tech) who will pay them for the game. That’s one way to mitigate the financial hit for this.

West Coast Conference postpones fall sports.

Keeping in line with many other leagues around the country, the West Coast Conference, which includes BYU, announced Thursday that it has postponed all conference fall competition due to the coronavirus pandemic and is looking at ways to compete in the spring.

The decision was reached by the WCC Presidents’ Council after consulting with the league’s 10 athletic directors and commissioner Gloria Nevarez over the past several weeks.

This move impacts women’s volleyball, soccer, men’s cross-country and women’s cross-country. But it doesn’t affect men’s and women’s basketball, which is scheduled to tip off in November.

The conference “remains fully committed and continues to work closely with campus leadership on plans to ensure a safe environment to conduct the 2020-21 WCC men’s and women’s basketball seasons in the winter,” according to league officials. “The conference intends to explore various models for conducting WCC competition in the fall sports of men’s and women’s cross-country, men’s and women’s soccer and women’s volleyball in the spring of 2021. The WCC strongly supports efforts to encourage the National Collegiate Athletic Association to conduct fall NCAA championships in the spring.”

The WCC includes Gonzaga, so you can understand the desire to play basketball.

Southern Conference postpones fall sports.

VMI will not play Virginia nor any other football team this fall.

The Southern Conference announced Thursday that it is postponing its fall sports season until next spring because of the coronavirus pandemic. SoCon presidents voted on the matter Thursday afternoon.

Although SoCon games are moving to the spring, the conference is permitting its teams to still play nonleague games this fall.

But VMI decided not to exercise that option. So the Keydets will not play their scheduled game at UVa on Sept. 11.

“We made the decision, our CEOs did, regarding fall moving to spring, and we support that and believe it’s in the best interest of our cadet athletes to shift things to the [spring],” VMI athletic director Dave Diles said Thursday in a phone interview. “And therefore [VMI] didn’t feel it was the right thing to have any additional parts separated from that decision.”

VMI would have received $375K to play UVa.

Horizon League postpones fall sports.

The Horizon League has canceled sports this fall.

On Thursday afternoon, the league announced it has postponed all competition for fall sports. Among the schools in the Horizon League are Detroit Mercy and Oakland.

In total, 10 sports have been canceled, including men’s and women’s cross country, men’s and women’s soccer, men’s and women’s golf, baseball, softball, men’s tennis and women’s volleyball.

The league said any decision to move fall sports competition to the spring will be made at a later date. Individual schools will implement their own rules involving team workouts, in accordance with NCAA and state guidelines.

The Horizon League had previously voted to delay the start of the fall sports season until October 1.

Big Sky and Western Athletic Conferences postpone fall sports.

There won’t be any sports competitions this fall in either the Big Sky Conference or Western Athletic Conference due to health and safety concerns related to the COVID-19 pandemic.

Both leagues made their announcements Thursday and are looking at the possibility of moving fall competition to the spring. It impacts four Utah colleges: Weber State and Southern Utah in the Big Sky, and Utah Valley and Dixie State in the WAC.

The Big Sky had previously announced it would postpone the league’s conference competition in football this fall, and Thursday’s news confirms there won’t be any nonconference play in any sport. The decision also impacts Big Sky competition in sports like men’s and women’s cross-country, soccer and volleyball that compete for their championships in the fall, as well as those in their nonchampionship portion of the season, including men’s and women’s golf, softball, men’s and women’s tennis.

[…]

The Big Sky punted making a decision on when the league’s winter sports — men’s and women’s basketball, men’s and women’s indoor track and field — could start competition.

The WAC’s fall championship sports impacted include men’s and women’s cross-country, volleyball and men’s and women’s soccer. The league also said the earliest possible competition date for sports in the nonchampionship portion of their season is Jan. 1, 2021, affecting men’s and women’s golf, baseball, and softball.

The WAC will discuss winter athletics competition at a later date, while saying competition in men’s and women’s basketball and men’s and women’s swimming and diving competition will be postponed through the end of October.

All of these conferences are FCS; the WAC used to be FBS, but dropped football after lots of schools moved to other conferences. Also, FCS school New Mexico State postponed its fall sports, becoming the third independent FCS school to do so, following the University of Connecticut and the University of Massachusetts. They all join the Big 10 and the PAC 12 in sitting it out for now, leaving the fall to the Big 12, SEC, and ACC

I don’t know what other FCS conferences there are out there, but for now at least this is what we’re going to get. I’m still quite skeptical that these three Power 5 conferences, plus the non-P5 FCS schools that are still in, can do this safely, but they’re going to try. And who knows, maybe they can. Sean Pendergast makes the case that the conferences that postponed were the foolish ones.

Regular students are coming back to campus anyway
At many of these schools, particularly in the Big Ten, regular students are actually returning to on campus classes this month. Yes, thousands of kids on campus, left to determine social distances and left for us to trust their masking policies. Football players at those schools will now be spending MORE time near the rest of those students. Also, if the Big Ten schools with student returning to campus are THAT concerned about COVID-19, to where they re canceling football, then why on earth are they bringing students back? It makes no sense.

Players in the SEC, ACC, and Big XII will have better access to testing and medical care
When they ultimately nail down hard and fast protocols, it is widely assumed that the SEC, ACC, and Big XII will obviously have some sort of regular testing for COVID-19. This, along with the access to top notch medical staff and facilities, make the players at those schools the most cared-for college students anywhere when it comes to COVID-19. Between frequent testing, the structure of a football regimen, and great doctors, you could argue the safest students in the country are the football players of the SEC, ACC, and Big XII. I feel for the Big Ten and Pac-12 kids who are now left without testing, and many of them being sent back to their hometowns, where depending on their family’s healthcare coverage, it’s hit or miss as to just how protected they are from the coronavirus.

Athletic departments budgets are about to be plundered, say goodbye to non-revenue sports
It would be naive to ignore the fiscal suicide being committed by the Big Ten and the Pac-12, who stand to lose tens of million of dollars by canceling the 2020 football season, basically out of fear — fear of bad press, fear of future litigation, fear of whatever. It’s why I wanted to establish first that the student-athletes in the conferences PLAYING football are actually safer from COVID-19, so my argument doesn’t appear mercenary. Big Ten schools pocket over $50 million per year from the Big Ten Network ALONE. Athletic departments stand to drown in a sea of red ink approaching nine figures. Non-revenue sports, basically everything that’s not football and basketball, that provide scholarship opportunities for literally thousands of kids, many female and minorities, are going to die under a financial guillotine when this is all said and done.

Playing a spring season is actually MORE dangerous than playing in the fall
Here is perhaps the least logical part of the whole thing — the Big Ten and Pac-12 are reportedly wanting to play in the spring. So this would mean playing a football season, which I’m assuming is a minimum of eight games, starting in, say March. This would run through May. Training camp for the fall season, assuming there’s a COVID vaccine and/or therapeutic medicine, would begin in July. That’s LESS than two months between seasons. Seasons of FOOTBALL. This is beyond malpractice, and far more abusive than any sort of exposure players would have to COVID-19. It seems that everyone wanting to cancel football, stuck in their coronavirus fetal position, conveniently forget that they’ve been watching and enjoying a sport for years that includes the risk of permanent head trauma.

Maybe! I think #3 is a legitimate concern, and #4 is a concern for a different reason, which I’ve seen expressed elsewhere: You’re moving football games from October and November to January and February, which are a lot colder and have more snow. That’s not great for a variety of reasons. Multiple football programs have had COVID outbreaks among their players already, some bigger than others, and I have plenty of doubts that the coaches, ADs, and whoever else is making these decisions has any idea what they’re going to do if a team has a similar outbreak during the season. And Lord help us if they all insist on having fans in attendance. I will readily admit, moving these sports to the spring has its share of risks and downsides. But let’s not underestimate the risk of staying the course.

The Big 12 will play football

That’s their plan, anyway.

The start of the Big 12 Conference’s college football season will move forward as scheduled, conference officials said Wednesday, meaning four major Texas football programs are one step closer to playing this fall.

“Ultimately, our student-athletes have indicated their desire to compete in the sports they love this season and it is up to all of us to deliver a safe, medically sound, and structured academic and athletic environment for accomplishing that outcome,” said Big 12 Commissioner Bob Bowlsby in a statement. The season will kick off Sept. 26, with the conference championship pegged for Dec. 12.

Baylor University, Texas Christian University, Texas Tech University and the University of Texas at Austin are Big 12 members. The conference presidents’ decision to allow football during the coronavirus pandemic was made official Wednesday morning, a day after the Big Ten and the Pac-12 announced their seasons would be postponed until the spring semester.

Bowlsby said member schools have committed to enhanced COVID-19 testing, with three tests per week in high contact sports. Non-conference football opponents must also adhere to testing protocols that match conference standards.

Texas A&M University is part of the Southeastern Conference, which has also signaled its intent to allow teams to play this fall.

“We will continue to further refine our policies and protocols for a safe return to sports as we monitor developments around COVID-19 in a continued effort to support, educate and care for our student-athletes every day,” said SEC commissioner Greg Sankey in a statement Tuesday.

So that’s two Power 5 conferences not playing in the fall, two that say they are, and the ACC. Of course, there are a ton of questions that will have to be addressed before this can be taken seriously, such as “how exactly are you going to keep all those people safe”, “what will be the protocol when someone (or several someones) tests positive”, and “do you really think that allowing fans in the stands is a good idea”. You can have all the bravado you want, but you better have some idea of what you’re doing when something inevitably goes wrong. In the meantime, all I can say is that it’s going to be an interesting autumn. Or possibly spring, if things do change. Reform Austin has more.

Big 10 and PAC 12 scrap football for this fall

Boom.

Big Ten Conference presidents and chancellors voted Tuesday to postpone all fall sports seasons, including football, with the hopes of playing in the spring, it announced Tuesday.

“The mental and physical health and welfare of our student-athletes has been at the center of every decision we have made regarding the ability to proceed forward,” Big Ten commissioner Kevin Warren said in a statement. “As time progressed and after hours of discussion with our Big Ten Task Force for Emerging Infectious Diseases and the Big Ten Sports Medicine Committee, it became abundantly clear that there was too much uncertainty regarding potential medical risks to allow our student-athletes to compete this fall.

“We know how significant the student-athlete experience can be in shaping the future of the talented young women and men who compete in the Big Ten Conference. Although that knowledge made this a painstaking decision, it did not make it difficult. While I know our decision today will be disappointing in many ways for our thousands of student-athletes and their families, I am heartened and inspired by their resilience, their insightful and discerning thoughts, and their participation through our conversations to this point. Everyone associated with the Big Ten Conference and its member institutions is committed to getting everyone back to competition as soon as it is safe to do so.”

[…]

In making its decision, the Big Ten said it relied on the medical advice and counsel of the Big Ten Task Force for Emerging Infectious Diseases and the Big Ten Sports Medicine Committee.

“Our primary responsibility is to make the best possible decisions in the interest of our students, faculty and staff,” Morton Schapiro, the Chair of the Big Ten Council of Presidents/Chancellors and Northwestern University president, said in a statement.

The University of Nebraska, after Cornhuskers coach Scott Frost on Monday said his program is prepared “to look at any and all options” in order to play this fall, on Tuesday issued a joint statement saying “we are very disappointed in the decision by the Big Ten.”

“We have been and continue to be ready to play,” the Nebraska joint statement said. “Safety comes first. Based on the conversations with our medical experts, we continue to strongly believe the absolute safest place for our student athletes is within the rigorous safety protocols, testing procedures, and the structure and support provided by Husker Athletics.

“… We hope it may be possible for our student athletes to have the opportunity to compete.”

See here for the background. Here’s the official statement from the Big 10. Something I noticed after rereading my draft was that basketball, which obviously starts in the fall but has a sprint championship, was not mentioned in the news stories. It’s not mentioned in the statement either, so at this point there’s no news. Any postponement of basketball will have further effects, but for now that decision has not been made.

A few hours later, the PAC 12 followed suit.

The Pac-12 CEO group voted unanimously Tuesday to postpone fall sports and will look at options to return to competition next year, the conference announced.

“The health, safety and well-being of our student-athletes and all those connected to Pac-12 sports has been our number one priority since the start of this current crisis,” said Pac-12 Commissioner Larry Scott in a statement. “Our student-athletes, fans, staff and all those who love college sports would like to have seen the season played this calendar year as originally planned, and we know how disappointing this is.”

Impacted Pac-12 student athletes will continue to have their scholarships guaranteed. The conference is also encouraging the NCAA to grant students who opt out of playing this academic year an additional year of eligibility.

The league’s medical advisory group had “concerns that many of its current recommendations cannot be achieved consistently across all universities at this point in time. Currently, the availability of frequent, FDA-approved, accurate testing with rapid turn-around time vary at each of the Pac-12 institution locations. In addition, in many locations within the Conference, community test positivity rates and number of cases per 100,000 in the surrounding community exceed levels which infectious disease and public health officials deem safe for group sports.”

The medical advisory group said “it is anticipated that over the next few months, rapid point of care tests will become more available and we will have a greater understanding of potential short- and long-term health effects of COVID-19 to better inform medical decision-making.”

Here’s their statement, which says they will “postpone all sport competitions through the end of the 2020 calendar year”. That also doesn’t mention basketball, but as noted since a bunch of (generally non-conference) games are played in the fall, it would seem to affect that as well. We’ll see what that means.

Looking at the other Power 5 conferences, it seems that the SEC is most likely to try to have a season, while the Big 12 may be the last one to made a decision. Whatever happens from here, this was a first step. There will be tons of fallout and repercussions from this, and we may not see a return to “normal” for some time. And that’s without factoring in the financial consequences. Hold onto your hats. The AP, CBS Sports, Slate, and Daily Kos have more.

UPDATE: An interesting fact from the Chron: “As of Tuesday, 53 of the 130 FBS schools will not play football this fall.” Just a guess here, but that number is going to go up.

So where are we with college football?

Possibly on the brink of postponing the season.

Commissioners of the Power 5 conferences held an emergency meeting on Sunday, as there is growing concern among college athletics officials that the upcoming football season and other fall sports can’t be played because of the coronavirus pandemic, sources told ESPN.

No major decisions were made on Sunday night, but multiple sources in several Power 5 conferences have told ESPN the commissioners talked about trying to collaborate if their respective presidents do decide to cancel or postpone fall sports.

Several sources have indicated to ESPN that Big Ten presidents, following a meeting on Saturday, are ready to pull the plug on its fall sports season, and they wanted to gauge if commissioners and university presidents and chancellors from the other Power 5 conferences — the ACC, Big 12, Pac-12 and SEC — will fall in line with them.

Sources told ESPN that a vast majority of Big Ten presidents have indicated that they would vote to postpone football season, hopefully to the spring. A Big Ten official confirmed to ESPN that no official vote took place during Saturday’s meeting.

“It doesn’t look good,” one Power 5 athletic director said.

[…]

Several sources have told ESPN over the past 48 hours that the postponement or cancellation of the football season seems inevitable. Many of those sources believed it ultimately will take a Power 5 conference to move things in that direction and that either the Big Ten or Pac-12 would probably be the first league to do it.

“Nobody wanted to be the first to do it,” a Power 5 coach told ESPN, “and now nobody will want to be the last.”

A Power 5 administrator added: “It feels like no one wants to, but it’s reaching the point where someone is going to have to.”

As we know, all of the not-FBS conferences, as well as the MAC, have cancelled or postponed their fall sports. On Monday, the Mountain West Conference joined them. Today, the PAC 12 will have a meeting, and we’ll see what they decide. This could be the week when the plug gets pulled, which would mean spring football if everything is finally better by then.

Or maybe not. The University of Nebraska is considering its options in the event the Big 10 postpones its season. (As of last night, there were conflicting reports about the Big 10’s plans.) There is definitely support from some athletes and politicians for having a season, though as that story notes the reasons each group has for advocating its position are different. One possible outcome is some kind of massive realignment, maybe with a smaller number of schools playing, and/or a bunch of athletes moving to other schools to participate. I’m sure we’ll know more soon. But just remember, in a country where we had the political leadership to get COVID-19 under control, we’d be having a very different conversation right now.

UPDATE: Just noticed that Rice is pushing back the start of its season to September 26, with the intent to reschedule games against UH and Army that were originally planned for before that date. I guess that’s a baby step towards postponing till spring, but as of this writing Conference USA and the AAC were still on for the fall.

Paxton beats SEC rap again

Not a surprise.

Best mugshot ever

A federal judge has again thrown out securities fraud charges against Texas Attorney General Ken Paxton, effectively ending one of two legal battles that have dogged Paxton for close to a year.

U.S. District Judge Amos Mazzant on Thursday dismissed the case “with prejudice,” making a final judgment on the charges that had been brought by the U.S. Securities and Exchange Commission. Mazzant first threw out the charges last year but gave the SEC the opportunity to file amended allegations — which it did in October, keeping the case alive.

[…]

In its amended allegations, the SEC had sought to bolster its argument that Paxton had a legal duty to disclose to the investors that he was making a commission. Mazzant said Thursday the SEC had still not been persuasive enough.

“This case has not changed since the Court conditionally dismissed the Commission’s Original Complaint,” the judge wrote. “The primary deficiency was, and remains, that Paxton had no plausible legal duty to disclose his compensation arrangement with investors.”

See here, here, and here for the background. After the charges were dismissed the first time, I was skeptical of the second effort, but you never know what might happen. So much for that. This is a win for Paxton, but the big game begins May 1, in Collin County or somewhere else. That’s what will really matter. The Press has more.

UPDATE: RG Ratcliffe’s overview of the Paxton saga is well worth your time.

More Paxton-versus-SEC stuff

Keeping the lawyers busy.

Best mugshot ever

Lawyers for Texas Attorney General Ken Paxton say the U.S. Securities and Exchange Commission cannot “shoot first and investigate later” as they seek to block 15 new subpoenas issued by the SEC.

It is the latest argument by Paxton’s attorneys in their effort to show the SEC is scrambling to save its civil securities fraud case against the attorney general, who is headed to trial later this year on similar criminal charges at the state level. Fighting the SEC charges, his team has already cast doubt on the credibility of a key witness in both cases, State Rep. Byron Cook, R-Corsicana.

The new subpoenas, issued Tuesday, largely seek communications Paxton may have had with any other investors in Servergy, the North Texas start-up whose investors Paxton is accused of misleading from a period before he was elected Texas’ top law enforcement official in 2014.

“The SEC cannot now attempt to bolster its faltering case … by fishing around in discovery for information about other potential investors whom the SEC has not pled with any particularity that Mr. Paxton defrauded,” Paxton’s lawyers wrote in their latest filing.

See here, here, and here for some background. This is all separate from the criminal trial that is now scheduled. Such busy days for our AG.

Paxton’s trial date set

Mark your calendars, and stock up on the popcorn.

Best mugshot ever

Texas Attorney General Ken Paxton’s trial on criminal securities fraud charges is set to begin May 1.

Jury selection will be held April 20-21 and April 27-28, according to a recent order by George Gallagher, the judge presiding over Paxton’s case. He also scheduled a hearing on pretrial motions for Feb. 16.

The trial will unfold in the heat of the legislative session, which began Tuesday and ends on May 29, and as campaigns get underway for the 2018 elections. Paxton plans to seek another term.

[…]

In the criminal case, Paxton faces three felony charges of breaking Texas securities law. If convicted, he could be sent to prison for five to 99 years.

Last year, Paxton exhausted his options in trying to put an end to the criminal case. The final blow came in October, when Texas’ highest criminal court declined to hear a Paxton appeal.

I think you know the background on this one. I’m not one for making predictions, but I will make one here: If Paxton gets convicted, he will not lose the support of any current statewide incumbent. They will rally around him, they will blame everyone but him for the outcome, and they will endorse him next March when and if he draws a primary opponent. I fully expect that he will be on the ballot next November. What happens if he wins re-election and loses his appeals, and has to serve time in jail? I guess we’ll find out. The DMN, the Chron, and the Lone Star Project have more.

Paxton wants SEC’s documents on him

More twists and turns.

Best mugshot ever

Texas Attorney General Ken Paxton’s attorneys have gone to court, seeking to force the Securities and Exchange Commission to produce notes of their interviews with the investors whose allegations form the basis of the civil case against him.

Paxton’s attorneys filed the motion to compel the SEC to turn over the documents Wednesday. SEC officials have refused to turn over the documents calling them “work product.”

His attorneys contend an SEC attorney told him that turning over the interview notes would show “the direction that we steered (the witness) with our questions would give away our strategy,” the motion states.

[…]

The SEC’s amended filing claims that Paxton alleged that members of the group had a standing policy that “no member makes money or otherwise benefits off the investment of another member.” It states that “Investor 1 ‘informed and expressly’ told Mr. Paxton about supposed policies of the group,” the motion states. (Paxton’s attorneys contend that Investor 1 is a reference to Cook.)

The SEC’s prior filing did not mention the existence of any such policy.

In Paxton’s motion, lawyers for Paxton state that they received an email from Cook and Hochberg’s attorney stating that there “was no formal group,” but rather an “ad hoc arrangement for time to time, good friends might invest in the same transaction.”

“This is a dramatically different story than the tale the SEC has spun about a decades-old investment group with established policies and practices,” the motion states.

The motion says the attorney for Cook and Hochberg also stated that they did not consider Paxton to be their broker.

Paxton’s attorneys want notes of the SEC’s meeting with Cook and Hochberg to determine “where and how this divergence in stories occurred.”

The motion also notes that Paxton’s sworn statement was taken back in December 2014, yet the SEC did not take sworn testimony from potential investors in Servergy.

The SEC interviewed Cook and Hochberg before filing its original case in April, but did not take statements under oath.

See here and here for some background. “Cook” is State Rep. Byron Cook, “Hochberg” is another investor named Joel Hochberg. I have no idea what to make of any of this, but at this point I don’t expect much from this case. I’m waiting for the real trial, which will happen next year. The Chron and the Trib have more.

Paxton asks for SEC charges to be dismissed again

Once more, with feeling.

Best mugshot ever

Best mugshot ever

Texas Attorney General Ken Paxton on Friday asked a federal judge to once again dismiss a U.S. Securities and Exchange Commission complaint accusing him of defrauding investors in private business deals in 2011.

U.S. District Judge Amos Mazzant III dismissed the SEC’s original complaint on Oct. 7, saying it contained allegations that weren’t supported by federal securities law. The SEC responded two weeks later with a revised complaintthat added details to the allegations that Paxton committed fraud by soliciting investors in Servergy Inc. without disclosing that the tech company was paying him to hawk its stock.

Paxton lawyer Matthew Martens said the new complaint still falls short.

“As the court said four weeks ago, the SEC’s original complaint had no legal basis. Our motion to dismiss filed today explains why the SEC’s new complaint fares no better. The reason is simple — Mr. Paxton did not commit securities fraud,” Martens said.

Paxton’s lawyers told Mazzant that the SEC’s revised complaint failed, again, to show that Paxton had a legal duty to tell potential investors about his sales commission deal with Servergy.

“The commission to date has been unable to cite a single example where a court has recognized such a disclosure duty,” they told the judge.

See here and here for the background, and here for a copy of the Paxton motion. I’m not a lawyer, but I have a hard time imagining what the SEC could have added that they didn’t include in the first place that might make a difference. But what do I know? We’ll see what the judge says this time. The DMN and the Chron have more.

SEC to try again with Paxton

If at first you don’t succeed

Best mugshot ever

Best mugshot ever

The U.S. Securities and Exchange Commission is not giving up on its case against Attorney General Ken Paxton.

The commission filed amended civil charges against Paxton on Friday, two weeks after a federal judge dismissed the case. Paxton, who is also fighting similar criminal charges at the state level, is accused of misleading investors in a company years ago.

“We are disappointed by the SEC’s decision to continue this case, given the court’s opinion and the clear infirmities the court found with the commission’s original complaint,” Paxton lawyer Matthew Martens said in a statement. “We will evaluate the revised complaint and respond accordingly.”

Earlier this month, U.S. District Judge Amos L. Mazzant III threw out the SEC case against Paxton but gave the commission 14 days — until Friday — to file amended allegations.

The updated charges contend that the group of investors Paxton allegedly duped when he persuaded them to invest in a tech start-up called Servergy “reasonably expected” him to disclose he was receiving a commission. According to the SEC, the members of the group had a standing policy that “no one member makes money or otherwise benefits off of the investment of another member.”

The amended allegations also amplify the SEC’s argument that Paxton did not simply fail to disclose but “actively concealed” his commission agreement from the investor group. He did so, the SEC says, by not mentioning it in filings with the Texas Ethics Commission and the IRS, ignoring efforts by the group to learn about his relationship with Servergy and mischaracterizing the compensation as a kind of gift when asked about it by the SEC.

See here for the background. I have no idea if this is a necessary technical correction to allow otherwise-viable charges to go forward, or if it’s a “what the heck, we may as well give it one last try” situation. Paxton still has the criminal charges to deal with, so if nothing else this is a distraction from that. Trail Blazers has more.

Paxton beats SEC rap

Two down, one left.

Best mugshot ever

Best mugshot ever

A judge has thrown out the federal civil case accusing Attorney General Ken Paxton of securities fraud, giving him his biggest legal victory yet since the allegations surfaced more than a year ago.

U.S. District Judge Amos L. Mazzant III on Friday granted Paxton’s motion to dismiss the lawsuit but gave the U.S. Securities and Exchange Commission 14 days to amend its allegations against the attorney general. Paxton is still fighting similar criminal charges at the state level.

Paxton is accused of misleading investors in a company from before he took office as Texas’ top lawyer. One of the central allegations is that he persuaded a group of people to invest in the company, a technology startup known as Severgy, without disclosing that he was receiving a commission.

“This case is not about whether Paxton had a moral obligation to disclose his financial arrangement with Servergy to potential investors,” Mazzant wrote in a 29-page ruling. “This case is also not about whether Paxton had some general obligation to disclose his financial arrangement to his investor group.”

Rather, Mazzant concluded, the case is about whether Paxton had a legal obligation to make a disclosure, and he did not — at least according to the facts put forward by the SEC.

See here for the background. No question, this is a big win for Paxton. I’m not qualified to say whether this result tells us anything about how the state case may go, but the bottom line is that the state case is now the only thing he has to worry about. The Chron and the Press have more.

A good day in court for Paxton

He may well get those SEC charges dismissed.

Best mugshot ever

Best mugshot ever

Lawyers for the U.S. Securities and Exchange Commission received skeptical treatment Friday from a federal judge who is considering whether to dismiss the civil fraud case against Attorney General Ken Paxton.

From the outset, U.S. District Judge Amos L. Mazzant III noted that the SEC’s case against Paxton was unlike those he usually sees from the commission. Mazzant came across as less than persuaded by one of its central arguments. At one point, Mazzant suggested the SEC was trying to fit a “square peg into a round hole,” basing its case on precedents that do not back up their arguments.

“The court’s hard-pressed to find a case that fits into the allegation the SEC is making,” Mazzant said, “and that troubles the court.”

The judge did not rule immediately at the end of the 90-minute hearing inside a Sherman courtroom. He said he instead plans to issue a decision in 30 days.

[…]

Largely at issue Friday was whether Paxton committed securities fraud by simply leaving out information in his dealing with investors, not necessarily making misleading statements. Paxton lawyer Matthew Martens argued that the attorney general’s actions did not amount to fraud, leaning heavily on the argument that every court that has previously looked at the issue has rejected the SEC’s argument. Meanwhile, SEC lawyer Matthew Gulde asked Mazzant to look more broadly at Paxton’s actions as a “pattern of conduct” in which he acted as a “secret broker” and had at least two duties to tell investors he was being compensated.

“It doesn’t matter what we call it,” Gulde said. “It is a secret quid pro quo that needs to be disclosed.”

They sparred less extensively over another charge in the case involving Paxton’s failure to register as a securities broker. Paxton’s side argued that his action did not meet any definition of the term, while SEC lawyers countered that they were downplaying how active of a role Paxton had in recruiting investors. “Mr. Paxton is not someone who’s walking into this blindly,” Gulde said.

Mazzant often appeared more sympathetic to Paxton’s arguments, suggesting that Gulde was reaching to find case law to support the SEC’s case — at least with the current facts alleged. “I don’t know how we get there,” Mazzant said at one point.

See here and here for the background. The state charges against Paxton are higher stakes, because the SEC case is a civil one, for which only a fine could be levied. Getting the charges tossed, if that is what happens, would still be a pretty big win for Paxton, as at the very least it lends credibility to his whole “I’m being persecuted” schtick. He needs his supporters to keep the faith, and his underwriters to keep those checks coming. He’s already beaten the Bar Association grievances, so this would give him two in a row. The third one is way bigger than the other two, though. We should know where he stands in a month. The Chron has more.

Paxton’s day in SEC court

That’s a slightly misleading headline, but you get the point.

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Best mugshot ever

Lawyers for Texas Attorney General Ken Paxton will argue Friday morning in a Sherman courtroom that the federal civil fraud case against him should be dismissed, their latest effort to unwind the legal troubles that have dogged Paxton for more than a year.

[…]

In the SEC case, Paxton’s lawyers have argued the allegations represent a “dramatic overreach and lack any basis in law.” The SEC lawsuit, they also say, does not claim he made any false or misleading statements to potential investors in Servergy, a technology startup at the center of both cases.

“Mr. Paxton should not be left to labor under a cloud of suspicion while enduring years of costly discovery to refute claims that are meritless on their face,” Paxton’s lawyers wrote in their June motion to dismiss the SEC lawsuit.

They will get the chance to press that argument at 9 a.m. Friday in federal district court in Sherman before U.S. District Judge Amos Mazzant III. Paxton’s team is being led by Matthew Martens, a former top lawyer for the SEC.

James Spindler, a law professor at the University of Texas at Austin, said he would not be surprised if the court dismisses at least some of the charges before trial. He said SEC lawyers “have their work cut out for them” in specifically proving the charges of fraud, which he called “factually dense inquiries” in the context of a case like this one.

“Overall, it seems a little questionable,” said Spindler, an expert in securities regulation. “It depends really on what the facts are, and they haven’t disclosed a lot of the facts of the case yet.”

See here for the background. Let’s wait and see what the government’s case is before we make any guesses about his odds of success.

In the meantime, this also happened.

The state’s highest criminal court Wednesday morning dismissed all three appeals filed on Texas Attorney General Ken Paxton’s behalf, saying his lawyers neglected to include everything needed on the petitions.

The Court of Criminal Appeals gave Paxton 10 days to add what was missing — a copy of the concurring opinion from the Dallas-based 5th Court of Appeals, which in June rejected Paxton’s request to dismiss criminal charges related to private business deals from 2011 and 2012.

Defense lawyers corrected the mistake a little more than two hours after the court issued the unsigned order, which was opposed by Judges Barbara Hervey and Michael Keasler.

“We inadvertently left off attaching to our petition a copy of the concurring opinion from the court of appeals. We have cured the oversight and have refiled,” Paxton lawyer Philip Hilder said.

The error isn’t expected to significantly delay the handling of Paxton’s appeal.

[…]

A trial on the SEC’s accusations has been tentatively set for Sept. 11, 2017, and is expected to last about two weeks.

Lawyers have said a trial on Paxton’s criminal charges, if upheld by the Court of Criminal Appeals, could take place in the spring of 2017.

An oops, but not a big deal. The schedule information at the end of the story is more interesting. If Paxton isn’t successful in getting charges against him dropped, next year is going to be very busy for him. Judge Mazzant is not expected to rule today, so it will be awhile before we know this part of Paxton’s fate.

Paxton rejects settlement talks with SEC

Not a surprise.

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Best mugshot ever

Attorney General Ken Paxton, facing charges he duped investors in a North Texas startup, is refusing to engage in settlement talks with the U.S Securities and Exchange Commission – and could be the last holdout in the case if it goes to trial.

William Mapp, the founder and CEO of the company for which Paxton is accused of illegally selling securities, is open to negotiating a legal settlement with the SEC, according to court records.

“From Mr. Paxton’s standpoint, there’s nothing to settle and that’s a big difference between our position and Mr. Mapp’s position,” said Bill Mateja, Paxton’s lawyer. “We expect to be exonerated. We want our day in court and we believe we will be exonerated.”

Paxton, who indicated to the court this month he would refuse to negotiate, would be the lone defendant left to fight charges from the SEC should Mapp agree to a settlement.

[…]

The parties are due in a Sherman federal district court Friday to give oral arguments on whether the SEC charges should be dismissed.

Unless the case is dismissed or Mapp signs a settlement deal, Paxton and Mapp will be tried together, likely in the fall of 2017.

Charges filed by the SEC in April also named former Servergy director Caleb White and Servergy. Both have settled with the SEC.

White paid $66,000 he received in commissions and returned 20,000 shares of stock to the company. Servergy paid a $200,000 penalty.

See here, here, and here for the background. Whatever the merits of the SEC case against him, Paxton cannot afford to settle this case. He’s bet everything on getting off the hook on the state charges, and settling with the SEC would send a very mixed signal to the vocal supporters who have been loudly insisting he’s being railroaded. Politically, losing this case is a better outcome for him than a slap-on-the-wrist settlement, because it’s in keeping with the narrative of him being a fighter that’s being persecuted. The best outcome, of course, is for the charges to be dismissed. We’ll see how it goes.

State Bar dismisses other complaint against Paxton

No matter what else happens, our ethically challenged Attorney General can say he beat at least one rap against him.

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Best mugshot ever

Attorney General Ken Paxton telling county clerks they do not have to issue marriage licenses to same-sex couples is not a sign of “professional misconduct,” according to the State Bar of Texas.

The organization last week dismissed a complaint filed against the embattled top prosecutor by more than 200 Texas attorneys, who argued that he “violated his own official oath of office” by issuing a written opinion stating that clerks and public officials could ignore the U.S. Supreme Court’s ruling legalizing same-sex marriage if it conflicts with their religious beliefs.

In an Aug. 3 notice obtained by The Texas Tribune, the State Bar said, “The Chief Disciplinary Counsel has determined that there is no just cause to believe that [Paxton] has committed professional misconduct.”

[…]

Steve Fischer, a former director of the State Bar of Texas and one of the attorneys who filed the complaint, said that while he didn’t get the result he wanted, there is “no further interest to continue the grievance.”

“We sort of made our point that he can’t tell clerks to disobey a Supreme Court’s ruling,” he said. “It’s the law of the land. He’s entitled to his own personal opinion, but he should draw a line.”

See here for the background. This may not have risen to the level of misconduct, but it was hardly exemplary conduct either, especially from the Attorney General. I don’t think a mild slap on the wrist of some kind would have been out of place, but whatever. Everyone who wants to get married in Texas can do so, and the matter hardly raises any eyebrow any more. Whatever happened with this complaint, Paxton lost the real fight, with barely a whimper. I’ll take that.

Meanwhile, in other Paxton-trouble news, the special prosecutors have filed their response to his petition to the Court of Criminal Appeals to have the felony charges against him dismissed.

Defense lawyers raised issues that cannot be appealed before trial or were correctly decided when the Dallas-based 5th Court of Appeals upheld criminal charges accusing Paxton of securities fraud and failing to register with state securities regulators, prosecutors told the Court of Criminal Appeals.

“The Court of Criminal Appeals grants less than 4 percent of all petitions for discretionary review filed by criminal defendants. Our reply makes it clear that Mr. Paxton’s petition is not one of them,” prosecutor Brian Wice said.

The prosecutors also argued that Paxton, who filed his appeal Aug. 1, waited too long to challenge the two felony fraud charges, requiring that portion of his appeal to be automatically dismissed.

You can see the state’s reply here. They rebutted each of the defense’s specific claims in addition to asserting that the defense filing was too late, but the legalese was too thick for me to make it all the way through without my eyes glazing over. Suffice it to say, the prosecution begged to differ.

And finally, Paxton is asking the SEC for more time in his fraud case on their docket.

Contemplating an aggressive round of depositions, Texas Attorney General Ken Paxton has asked for an additional 3½ months to question potential witnesses about allegations that Paxton defrauded investors in private business deals five years ago.

The additional time, if granted by U.S. District Judge Amos Mazzant III, would delay until at least September 2017 a civil trial on fraud allegations made by federal regulators.

In a recent court filing, Paxton’s lawyers told the judge they will need more time to question as many as 46 potential witnesses, including state Rep. Byron Cook, R-Corsicana, and his wife, Kay.

[…]

Another reason to grant a delay, lawyers told Mazzant, is that Paxton could face a criminal trial as early as spring 2017 on state felony fraud charges related to his actions on behalf of Servergy.

“Mr. Paxton respectfully submits that, as a matter of fairness, the trial of his criminal matter should occur prior to the trial of this matter,” his lawyers said.

Paxton’s lawyers also informed Mazzant that they are not interested in reaching an out-of-court settlement with the SEC. Neither side has requested or made a settlement offer, they added.

SEC lawyers told Mazzant they expect to finish their depositions — which would include questioning Paxton and his wife, Angela — by Feb. 6. Paxton’s lawyers pressed for a May 26 deadline on depositions.

See here and here for the background. Paxton has also filed a motion to dismiss the SEC charges against him, which still awaits the judge’s ruling. You have to admit, defending himself from a myriad of charges relating to his bad behavior is a full-time job, so Paxton has a compelling case for delay here. We’ll see if the judge grants it.

Paxton moves to dismiss SEC charges against him

We’ll see if he has any more luck with this than he has had with the state charges.

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Best mugshot ever

Lawyers for Texas Attorney General Ken Paxton have asked a federal court to dismiss the federal securities fraud charges against him.

[…]

Paxton’s lawyers in the federal case filed a motion Thursday seeking to dismiss the charges, arguing that the SEC has failed to show that Paxton lied to investors and arguing that the investors did not lose any money.

“In short, the SEC’s claims against Mr. Paxton are a dramatic overreach and lack any basis in law,” says the motion filed in the Eastern District of Texas. “Mr. Paxton should not be left to labor under a cloud of suspicion while enduring years of costly discovery to refute claims that are meritless on their face.”

Paxton reiterated Thursday his belief that he is innocent. “I did not violate the federal securities laws, and I intend to defend myself vigorously against these allegations,” Paxton said in a statement.

See here and here for the background. A copy of the Paxton motion is here. These are civil charges, meaning the worst Paxton will face if he loses is a fine, but also meaning that the standard of proof against him is less cumbersome. History suggests the odds are against him, but we know he was never going to do anything other than fight to the finish. He needs his image to be that of the poor persecuted True Conservative, and that is not compatible with making a deal. No indication at this time what the timeframe for this might be, so who knows how long this could take. The Chron and Trail Blazers have more.

This week in Ken Paxton Dishonesty

What else has he been lying about?

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Best mugshot ever

Ken Paxton told federal investigators a tech CEO gave him $100,000 worth of stock five years ago, but he never disclosed the shares as either a gift or income, an issue ethics experts agreed could spell more trouble for the attorney general already facing state and federal fraud charges.

According to federal fraud charges filed against Paxton last month, the embattled first-term Republican AG told investigators from the U.S. Securities and Exchange Commission that in 2011 he was given 100,000 shares of stock in the North Texas tech startup Servergy by the firm’s then-CEO Bill Mapp.

While Paxton said he intended to invest in the company and pay for the shares, Mapp allegedly wouldn’t accept, telling him during a meeting at a McKinney Dairy Queen that “God doesn’t want me to take your money,” according to the SEC charges.

“Consequently, Paxton claims, he later accepted the shares as a gift,” the charges added. Yet Paxton, who was a state representative at the time, never disclosed the stock as a gift on annual personal financial statements elected officials are required to file with the state.

Federal investigators doubt the shares were given as a gift, instead alleging Mapp handed over the stock to Paxton as a “sales commission” for convincing other people to invest in his company.

[…]

State law says elected officials who receive a gift worth more than $250 must disclose it on the “gifts” section of their annual personal financial statements. On his 2011 statement, Paxton for the first time disclosed that he held 10,000 or more shares in Servergy.

He did not also list the shares in the “gifts” section.

Several ethics experts said if an elected official receives stock as a gift, they must disclose the shares in both the “gifts” and “stock” sections on the personal financial statement. The gift section, unlike the stock section, requires the official to divulge the name of the donor.

The only exceptions to this disclosure rule, according to state law, are for gifts that come from a relative by blood or marriage within two degrees, political contributions or lobbyist expenditures.

“It specifically requires that a gift be reported if it is in excess of $250,” said Tim Sorrells, a private practice attorney who served as the general counsel of the Texas Ethics Commission for a dozen years. Renea Hicks, an Austin attorney who specializes in ethics issues, added, “If it was a gift, it seems obvious to me it would have to be listed in the gifts section.”

Paxton did not list the stock under the “gifts” section of his personal financial statement that year or in any year since.

See here and here for some background. This, again, is why Paxton is writing legally meaningless threat letters to Target about bathrooms. It’s all to keep his core supporters focused on the things they like, and not on these unpleasant little allegations about Paxton’s utter lack of moral character. A scoundrel’s gotta do what a scoundrel’s gotta do.

One more thing:

The Texas Ethics Commission can fine someone who breaks disclosure laws $5,000 or three times the amount at issue. Criminal charges for perjury or making false statements would also be possible, said former assistant attorney general Fred Lewis. Failing to file a personal financial statement correctly in accordance with state law is a Class B misdemeanor.

Progress Texas? Texans for Public Justice? This is your cue.

Paxton’s pity party

Oh, boo hoo hoo.

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Best mugshot ever

Attorney General Ken Paxton has blasted his indictments and other legal problems – including a previously undisclosed IRS investigation and frozen accounts – as a political witch-hunt fueled by fellow conservatives and the media.

At a Tarrant County tea party meeting Saturday that also featured Glenn Beck and U.S. Rep. Louie Gohmert, R-Tyler, Paxton asked the crowd to imagine a trusted neighbor who gets a new job and then is plagued by all kinds of problems – including having his accounts frozen and being subject to an IRS audit.

“He’s got some of his bank accounts have been shut down. Some of his retirement accounts are being shut down,” said Paxton. “You find out the guy is being investigated by the Travis County DA, and then the Dallas County DA, and then the Collin County DA. And then you find out the person is being investigated by the SEC.”

He then added, “You have to ask yourself, ‘Is there a character problem here? This person has been no trouble for 35 years and then, suddenly, they’re having all this trouble.’ Well that’s, in that sense, what’s happened to me. I have no speeding ticket in my life. Never been audited by the IRS. Never been investigated by—never, no bar grievances with the state bar. I get sworn into office and everything I just mentioned happened.”

[…]

Also on Saturday, Paxton said that one of his biggest challenges in state government has been Republican disunity.

“Since been running for AG, you may have noticed I’ve been under a little bit of a political attack. You might have noticed the media doesn’t cover me very well, says a few unflattering things,” he said. “The reality is when you go down to Austin and you’re going to stick to your conservative principles, there are people in our own party often times that find that too enlightening.”

Poor, poor baby. There’s audio at the link if you can stomach it. It may well be that Ken Paxton was a complete choirboy for the first forty-something years of his life, and then he got corrupted by his years in Austin. We know Paxton has made a tidy little fortune since first being elected, it’s hardly a stretch to imagine. And isn’t that “power corrupts” narrative something that teabaggers love to believe?

Anyway. Turns out Paxton is not being audited, just hyperbolic. That link has video of the speech, if you’re even more morbid. It may well be that Texas voters will tolerate a scoundrel or two – or at least, it may well be that the current Republican voting majority will tolerate a Republican scoundrel – but a whiner? There’s also the inconvenient fact that our scoundrels have for the most part not gotten themselves convicted. Someone who gets accused and gets off is an underdog who beat the system. Someone who gets convicted (if it sticks, anyway), is just another crook. That story has not yet been written about Ken Paxton.

More on Paxton’s SEC troubles

The short answer is, he’s gonna lose.

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Best mugshot ever

Texas Attorney General Ken Paxton may have some history on his side, but as of this week the numbers appear to be against him.

Paxton, who is trying to become the latest in a long line of Texas officials to beat prominent allegations, unwittingly entered treacherous waters Monday when the federal Securities and Exchange Commission announced it had sued him for allegedly committing securities fraud, the same charge he is facing in a state district court.

Over the past two years, the SEC has won 95.9 percent of the cases not related to insider trading that it has taken to a federal courtroom, according to a new study from Stanford University’s Rock Center for Corporate Governance.

“If we were in Vegas making book, the odds would be that the attorney general is going to lose,” said Joseph Grundfest, a senior faculty member at the center and a former SEC commissioner.

Part of the reason for those odds is that the SEC does not make formal accusations until giving defendants a chance to argue in writing and in person why a case should not be filed – a process Paxton almost certainly exhausted before the commission moved forward, experts said.

The attorney general’s challenge is heightened by the fact that two of his co-defendants already have agreed to large financial settlements.

[…]

Although it has taken place more quietly, the SEC investigation has been going on for at least [as] long [as the state criminal investigation]. Its existence first was reported by the Associated Press in early last July.

Paul Coggins, a former federal prosecutor who now leads the white-collar criminal defense practice for the Dallas-based Locke Lord law firm, said the SEC process dictates that the agency long ago had to notify Paxton of its intent to file a lawsuit and offer him an opportunity to submit a brief and to argue in person that nothing should be filed.

The federal complaint filed Monday quotes Paxton defending himself, statements that may have been taken from a brief or from testimony.

During the SEC’s investigative process, two of Paxton’s co-defendants agreed to settle their cases by paying a combined $266,000, according to the federal government. Those settlements, by Servergy and former firm official Caleb White, were signed in mid-March, court records show.

White, who was accused of the same crime as Paxton but received one-fifth of the shares in the company, paid the SEC $66,000, suggesting Paxton could be on the hook for at least that much.

That could be a problem for Paxton, who already is spending heavily on a five-person defense team and faces legal barriers to raising money through donations.

In cases that were not settled, a 2015 analysis by the Wall Street Journal found, the SEC won 69 percent of cases litigated in federal courts from October 2010 through March 2015.

Grundfest, the Stanford professor, said the SEC’s win rate has improved recently. He also pointed out that the newspaper’s analysis included insider trading cases, which are much harder for the commission to win.

In insider trading cases, the agency loses about half the time. In cases unrelated to insider trading, the SEC almost always wins, the professor said.

See here for the background. As the story notes, this could be a precursor to federal criminal charges being filed. Even if that doesn’t happen, he’s going to lose this lawsuit. I feel a song coming on:

One way or another, this is not going to end well for Ken Paxton. If he deserved any sympathy, I’d feel it for him, but he doesn’t.

SEC files charges against Paxton

Bam!

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Best mugshot ever

Texas Attorney General Ken Paxton has been charged in federal court with allegedly misleading investors in a technology company.

The U.S. Securities and Exchange Commission filed the charges Monday in a Sherman-based court. They are similar to the allegations Paxton faces in a pending indictment handed up by a Collin County grand jury last year.

Paxton is named in the SEC’s complaint along with William Mapp, the founder and former CEO of Servergy Inc. Paxton is accused of raising hundreds of thousands of dollars for Servergy without disclosing he was making a commission. The case stems from when Paxton was a member of the Texas House — before he was elected attorney general in 2014.

“People recruiting investors have a legal obligation to disclose any compensation they are receiving to promote a stock, and we allege that Paxton and White concealed the compensation they were receiving for touting Servergy’s product,” Shamoil T. Shipchandler, director of the SEC’s Fort Worth regional office, said in a news release on the complaint.

See here for more on the Paxton/Mapp/Servergy relationship, and see here for a copy of the complaint, which as the Chron notes is a civil lawsuit, which may result in a fine for Paxton if he loses. The bit from the complaint that directly relates to Paxton begins on page 17. Here’s a key quote from that section, which is paragraph 78:

Among the people Paxton recruited were his friends, business associates, law firm clients, and members of an investment group to which he belonged. Despite a duty to do so, Paxton knowingly or recklessly failed to inform the individuals he recruited that he was being compensated to promote Servergy to investors.

Basically, this is saying that Paxton lied to his friends, colleagues (including Rep. Byron Cook), clients, and coworkers by exhorting them to invest in Servergy without telling them that he would get a kickback if they did. What a guy, right? We are very early in this story and there is sure to be much more to come, so stay tuned. One thing we can say, though, is that Paxton’s fellow Republicans really don’t want to talk about him.

Top leaders including Gov. Greg Abbott and Lt. Gov. Dan Patrick have been mostly silent on the issue, giving Paxton the benefit of the doubt and allowing the legal battle to play out with the AG still in power.

What’s more, the people who were instrumental in his election don’t care about the charges against him. They support him because his conservative credentials are in line with the grassroots activists that now dominate the GOP.

In the past, donors like Bob Perry, Fred Meyer and Louis Beecherl had tremendous influence because their money could make or break candidates for public office.

Today, grassroots candidates who aim to shake up the establishment don’t need money from old-line political donors. They are boosted by folks like Midland oilman Tim Dunn and the billionaire Wilks brothers out of Cisco.

So candidates like Paxton have not only support at the ballot box from activists, but also a fundraising base to hold potential opponents at bay.

Fine by me. I’ll say again, I hope he’s on the ballot in 2018 as a convict. It would sum up the state of the state’s Republican party perfectly. Trail Blazers, TPM, the Lone Star Project, the Current, Newsdesk, PDiddie, and the Press have more.

Former Servergy CEO sues over Paxton-related costs

What a tangled web.

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Best mugshot ever

The former CEO of the technology startup named in Ken Paxton’s indictments is suing the company he founded for costs associated with the attorney general’s criminal investigation and ongoing legal battle.

William Mapp III, the founder and ex-CEO of McKinney tech firm Servergy Inc., says he “incurred and continues to incur attorney’s fees and expenses and may in the future incur other liabilities” from “grand jury proceedings and criminal indictment of Texas Attorney General Ken Paxton.”

Mapp also claims to have shouldered costs associated with an ongoing U.S. Securities and Exchange investigation into whether the company defrauded investors when he was CEO. Mapp is asking for more than $150,000, plus damages from Servergy for expenses he already has incurred and anticipates as Paxton’s court battle continues.

“It is routine for corporations to agree to advance and reimburse current and former officers and directors for legal fees in such circumstances, and Servergy is obligated through its bylaws to do so in this case,” said Kirby J. Smith, Mapp’s attorney. “Servergy has so far failed or refused to do so, leading to Mr. Mapp’s conclusion he had no choice but to file this lawsuit to obtain payments overdue to him.”

[…]

The SEC began investigating Servergy in 2013, and after the company failed to produce information demanded in multiple subpoenas, it sued in December 2014, to compel the production of records in an investigation of “possible misstatements and omissions related to Servergy’s purported business relationships and technology.”

At the same time, a group of investors, including House State Affairs Committee Chairman Byron Cook, R-Corsicana, also sued the company for access to Servergy’s books and records. Both suits ultimately were dropped after the documents were produced, but Mapp’s lawsuit suggests the SEC investigation is ongoing.

“Mapp has incurred and continues to incur attorneys’ fees and expenses and may in the future incur other liabilities in connection with the investigation of Servergy by the Securities and Exchange Commission,” the lawsuit reads. “Mapp has retained the law firm of Greenberg Traurig to aid in his defense of the SEC investigation.”

See here, here, and here for more on Servergy and William Mapp, who testified during the grand jury proceedings but has some potential credibility issues. His lawsuit was filed in Nevada, as that is where Servergy is incorporated, though its corporate office is here. I have no idea what if any effect this will have on the criminal case against Paxton – the possibility that the SEC is still investigating Servergy is intriguing but not necessarily relevant – I just thought it was worth noting.

Paxton girding for indictment

So are we, Kenny. So are we.

Ken Paxton

A Collin County grand jury is expected to weigh evidence brought by two temporary district attorneys assigned to the case. Paxton’s advisers are furiously preparing for a criminal indictment.

The looming showdown has the camps bickering. Anthony Holm, a spokesman for Paxton, contends the AG should not face criminal prosecution.

“As we’ve said for 14 months now, there was no criminal action because there was no crime,” Holm said. “This was solely a civil event with a $1,000 civil penalty.”

Holm took aim at the special prosecutors assigned to the case, calling Houston lawyers Kent Schaffer and Brian Wice lawyers “whose careers are built on defending the sort of child molesters and Mexican drug cartel leaders that Attorney General Paxton was elected to prosecute.”

Holm also accused a local lawyer who provided information about Paxton to a previous grand jury of having a vendetta.

“The Collin County situation is a drastic departure from objectivity, legal precedent or common sense, and it’s time for people to understand a respected public official is the target of a political vendetta,” Holm said. “This witch hunt must end.”

In a written statement, Schaffer and Wice fired back, saying their investigation was “neither a political vendetta nor a witch hunt.”

“The PR shell game Mr. Paxton’s hired gun employs once again seeks to change the conversation from his client’s conduct to personal attacks on us,” they wrote. “He knows full well that we were appointed by a Republican judge in one of the most conservative counties in Texas to conduct a full, fair and impartial investigation, and that is exactly what we intend to do.”

As the story notes, Paxton admitted to breaking the law to avoid a campaign issue. In his mind, that means the matter was settled, even though it had not yet come to the attention of any prosecutor. Now as we know a complaint has been filed and a special prosecutor appointed with a grand jury waiting in the wings, but Team Paxton wants everyone to believe that it’s all ancient history. It doesn’t work like that, I’m afraid. At least, not for normal people.

But prosecutors now say that at the least, there’s evidence that Paxton violated securities law by not registering with the securities board, a third-degree felony. And Schaffer has said he’ll ask for a first-degree felony indictment, though he won’t elaborate on the charge.

The prosecutors could submit evidence of the securities law violation that Paxton admitted to as a slam dunk case. But at least one legal expert says few people are criminally prosecuted for such offenses.

The state securities board did not refer the case for criminal prosecution.

“It’s technically a violation, but you don’t often see that type of violation charged criminally,” said Dallas lawyer Jeff Ansley, a former Assistant U.S. Attorney for the Northern District of Texas and a former Enforcement Attorney for the U.S. Securities and Exchange Commission. “That’s very rare.”

So the key question remains: What’s the evidence of a first-degree felony?

I assure you, we are all on pins and needles waiting to find out. One hopes that these two career defense attorneys will not pursue excessive charges on flimsy evidence – you know, the sort of thing they are critical of other prosecutors for – so we’ll see what goods they have.

That Paxton is in legal trouble can be attributed in part to the efforts of a watchdog group, and the determination of a local lawyer.

The public integrity unit within the Travis County district attorney’s office said it lacked jurisdiction and forwarded information to Dallas and Collin counties for lack of jurisdiction. Dallas County District Attorney Susan Hawk didn’t touch the case either, saying she was not aware of any alleged crimes being committed in the county.

That left Collin County, where Paxton’s friend and business partner, Greg Willis, is district attorney.

After receiving a complaint from Texans for Public Justice, Willis stepped aside and said that “appropriate investigation agencies, including the Texas Rangers,” should handle the allegations against Paxton.

“As soon as we saw what he signed with the State Securities Board, it was obvious that he was admitting to felony conduct,” said Craig McDonald, executive director for Texans for Public Justice. “If Greg Willis hadn’t stepped aside, this thing would have died.”

Meanwhile, Dallas lawyer and blogger Ty Clevenger took the extraordinary step of sending information about Paxton to members of a Collin County grand jury, including three from the same church. He said he also dropped off information to a grand jury member’s home. He got their names from Collin County officials by asking; in Dallas, Hawk declined to release the grand jury’s names.

The grand jury that will hear the Paxton evidence from the special prosecutors is not the same as the one Clevenger sought out. One should always be a little wary of crusaders, no matter how enticing their claims are, but again, one hopes that the evidence will back up whatever comes out. There’s been a lot of trash talk from Team Paxton, which is either bravado or whistling past the graveyard. That grand jury is now in, and it’s put up or shut up time. The Observer suggests what may be coming.

William Mapp, the disgraced founder of Servergy, Inc., was identified at the courthouse by WFAA reporter Tanya Eiserer. Servergy, based in McKinney, claimed to produce energy-efficient servers for corporate clients. The company made extraordinary claims about its core product, the Cleantech-1000, claiming it consumed “80% less power, cooling, and space in comparison to other servers currently available.” But there was a problem: The federal Securities and Exchange Commission (SEC) alleges that Servergy’s claims about its product were false. And the company, the SEC says, produced fraudulent pre-orders from tech companies like Amazon and Freescale to sell itself to investors.

Servergy raised some $26 million from selling stock between 2009 and 2013, as detailed by information released by the SEC. And it profited from grants from the McKinney Economic Development Corporation (MEDC), a local fund that reinvests money collected by local sales taxes. Servergy continued to receive money from MEDC even after a formal SEC investigation began in 2013. Servergy is also connected to a wide variety of other improprieties and shady activities.

Paxton was a prominent Servergy shareholder, owning at least 10,000 shares. But while other investors simply lost their shirts, Paxton’s role in the Servergy case has generated lingering interest from authorities. In 2014, Paxton’s name was included in a list of search terms used by the SEC to subpoena the company, along with several other prominent figures in McKinney. Mapp’s presence at the courthouse today suggests that Servergy’s case is connected to evidence special prosecutors are presenting against Paxton.

That would be a significant escalation in the case against the state’s AG. A large part of the public defense laid out by Paxton’s spokesman Anthony Holm revolves around the assertion that Paxton’s original violation of securities law, regarding his legal clients, was a simple mistake and civil matter that he corrected when it was brought to his attention. The Servergy episode is a whole different kettle of fish, and while it remains to be seen what the prosecutors have against Paxton in connection to this particular episode, it should be a source of significant concern in the AG’s office.

See here for the background. All I can say is “oh please, oh please, oh please”. We’ll see what happens.

Paxton involved in another scam

When it rains, it pours.

Ken Paxton

The name of Attorney General Ken Paxton, facing potential indictment by special prosecutors in Collin County for first-degree felony securities fraud, has surfaced in a federal probe of a company in which he is an investor.

The investigation, first reported late Tuesday by the Associated Press, centers on whether McKinney-based Servergy defrauded investors with false claims about the sales of its data servers and their technological capabilities. According to court filings by the U.S. Securities and Exchange Commission, the company is suspected of “potential misstatements” about having preorders for the servers from the online retailer Amazon and the semiconductor giant Freescale — and in assertions that the product needed up to 80 percent less cooling, energy, and space compared to other servers on the market.

Paxton’s email address appears with about 70 other contacts in one list of search terms in a subpoena of Servergy from the SEC. His name is also included in an October 2014 letter from Servergy to the SEC describing the search terms used to produce the documents the company turned over in response to a subpoena.

According to Paxton’s 2014 personal financial statement filed with the Texas Ethics Commission, he owns at least 10,000 shares in the company. The SEC filings do not indicate it is seeking documents involving Paxton or the scores of other investors and additional parties.

You can see the original AP story here. At this point, it’s hard to say what if anything this may amount to, and what if any role Paxton may have played beyond duped investor. He’s been duped before, and there’s no reason to believe he’s learned from the experience. So we’ll see. This has already been a bad year for Ken Paxton. It has the potential to get a whole lot worse.

TPJ refiles complaint against Paxton

We’ll see if they have any better luck this time.

Ken Paxton

Texans for Public Justice on Monday re-filed its criminal complaint against Attorney General Ken Paxton with local prosecutors in Dallas and Collin Counties, arguing the latter should recuse himself because of conflict of interest concerns.

“Mr. Paxton’s conduct demands a thorough and independent investigation,” Craig McDonald, executive director of Texans for Public Justice, wrote to Collin County District Attorney Greg Willis.

“We further believe that as a friend and business associate of Mr. Paxton that you should recuse yourself from this matter. To ensure independent and impartial judgment, you should forward our complaint to the proper judicial authority to appoint an independent special prosecutor to investigate Mr. Paxton’s conduct.”

[…]

McDonald has accused Collin County of “stonewalling” his group’s efforts because of Willis’ long-time friendship and business relationship with the new attorney general. The two men have known each other for more than 30 years and have invested in at least four different ventures together.

The conflict of interest problems McDonald cites in his letter also have concerned lawmakers considering a proposal to move the Public Integrity Unit outside of Travis County. Sen. Kel Seliger, R-Amarillo, on Friday also called for Willis to recuse himself, and said the concerns the Paxton case raises illustrate the pitfalls of handing public corruption cases to hometown prosecutors who inevitably have deep ties with local politicians.

See here for the background. A copy of the letter sent to Collin County DA Greg Willis is here, a copy of the letter sent to Dallas County DA Susan Hawk is here, and a copy of the complaint sent to Collin County is here. I can’t wait to see what if any response they get. What recourse TPJ may have if no action is taken is not clear to me.

Paxton evades prosecution

In Travis County, anyway.

Ken Paxton

New Attorney General Ken Paxton, who in 2014 was found to have violated the Texas Securities Act, will not be prosecuted by the state’s office that investigates public corruption, officials said Thursday.

Paxton, a former state senator from McKinney, violated the Securities Act by soliciting investment clients without being registered, as required by law, according to a disciplinary order last year from the State Securities Board. Under the order, Paxton was “reprimanded” and fined $1,000. But Thursday’s announcement signals that the case may be closed.

“Our investigation did not find any additional criminal activity over which our office has venue, so we are concluding Travis County’s involvement in this matter,” said Travis County District Attorney Rosemary Lehmberg, whose office includes the state’s public integrity unit.

[…]

Lehmberg’s office said it had forwarded a portion of its investigation to prosecutors in Collin and Dallas counties, which could investigate the securities board’s findings further.

See here for the background. In addition to possible action in Collin and/or Dallas Counties, there’s also still the SEC complaint, the state bar grievance, and the lawsuit to get his records from the State Securities Board out there. Paxton may have dodged one bullet, but he shouldn’t feel lucky just yet. Trail Blazers and the Statesman have more.

TPJ files criminal complaint against Ken Paxton

From the inbox:

TPJ Calls for Formal Investigation of AG Candidate Ken Paxton – Criminal Complaint Filed With Travis County DA’s Office

TPJ has filed a criminal complaint with the Travis County District Attorney against State Senator and Attorney General candidate Ken Paxton. The complaint, filed on July 18, seeks a formal investigation into allegations that Paxton committed one or more felonies when, over several years, he failed to register as an investment adviser representative of Mowery Capital Management as the state securities law requires. Paxton previously admitted to state regulators that he solicited clients and was compensated for his services when he was not a registered agent. Paxton also admitted hiding the income he received on his state personal financial disclosures.

Here’s the letter they sent to DA Rosemary Lehmberg and Public Integrity Unit lead prosecutor Gregg Cox. It’s pretty straightforward so I’ll reproduce it here:

Dear Ms. Lehmberg and Mr. Cox,

I believe that Mr. Kenneth Warren Paxton, Jr. has committed one or more criminal felony offenses related to his activities as an investment advisor representative for Mowery Capital Management, LLC (MCM). I encourage your offices to investigate and, if warranted, appropriately prosecute Mr. Paxton for his felony criminal conduct.

The public record appears to be unambiguously clear that Mr. Paxton violated provisions of the Texas Securities Act in 2004, 2005 and 2012 by failing to register as an investment adviser representative of Mowery Capital Management as the law requires.

As widely reported in the media, on April 30, 2014, by sworn acknowledgement, Mr. Paxton admitted to conduct that violated the Texas Securities Act. His sworn acknowledgement resulted in Disciplinary Order No. IC14-CAF-03 entered against him on May 2, 2014 by Texas Securities Commissioner John Morgan.

By agreeing to the Disciplinary Order Mr. Paxton has acknowledged that he solicited clients for MCM and was compensated by MCM for each client he delivered. Mr. Paxton also acknowledged that he was not registered with the Texas Securities Board as a representative of MCM during 2004, 2005 and 2012 when he actively solicited clients and potential investors.

The Texas Securities Act prohibits a person from acting as an investment adviser representative for an investment firm in Texas unless the person is registered as a representative for that particular firm. The Texas Securities Act provides that any person who renders services as an investment advisor representative without being registered as required by
the Act is guilty of a felony of the third degree.

I therefore request that you fully investigate this matter and prosecute any violations if justified by the law and the facts.

Respectfully,

Craig McDonald
Director, Texans for Public Justice

See here and here for the background. That disciplinary order was little more than a slap on the wrist, unless this develops into something. There’s also an SEC complaint pending against Paxton. That’s an awful lot of baggage for a candidate to carry, and one imagines it will have to take a toll on him. I figure at least a few Dan Branch supporters are going to avoid voting for Paxton in November, though how many that may be is anyone’s guess. The one thing about all this that worries me is that once the Democratic District Attorney from Democratic Travis County gets involved, Paxton and his supporters can claim it’s all about partisan politics and that he’s the real victim here. He’s already traveling down that road. If there’s one thing that can overcome revulsion against an ethically-compromised candidate, it’s tribal identity. Still, the facts here are quite plain – Paxton signed legal documents stipulating to what he did – and for sure someone was going to file a complaint. Now we wait and see what Lehmberg and her staff make of it. The Statesman has more.