LSP Memo: Ken Paxton’s Long Record of Corruption and Obstruction

Since 2014 when it was revealed that then State Sen. Ken Paxton violated state securities law by failing to register as an investment advisor, the Lone Star Project has chronicled Paxton’s crimes and taken action to expose his corruption.
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Since 2014 when it was revealed that then State Sen. Ken Paxton violated state securities law by failing to register as an investment advisor, the Lone Star Project has chronicled Paxton’s crimes and taken action to expose his corruption – including providing documents to a Collin County Grand Jury investigating Paxton’s involvement in a shady land deal.

Some members of the Texas press have not covered Ken Paxton until recently, so I am providing below a summary of previous Lone Star Project reports.

Most notable about the Paxton story is that even a criminal indictment has not tempered his improper actions. He has successfully used political cover from Greg Abbott and partisan State courts to survive and, until recently, thrive. Paxton is a Co-Chair of an attorneys for Trump coalition. Greg Abbott has enabled Paxton with financial and other support to his campaign, helping keep him in office and tamp down Republican concerns about Paxton’s unethical and illegal actions.

Bribery Scandal the Latest Episode of Paxton Corruption
Over the weekend, the Austin American-Statesman reported that seven senior staff members at the Attorney General’s office filed a whistleblowers report stating that Paxton had abused his office, committed bribery and other potential criminal offenses.

As the public and the press learn more about these latest allegations, I want to share our library of research and reports laying out Paxton’s unethical, corrupt approach to politics dating back to his time as a State Representative. You can visit the Lone Star Project “Paxton Files” here to see every report published on Paxton.

Below, we provide a summary of major past Paxton improper or illegal actions.

Paxton’s Criminal Indictment
The ongoing felony criminal indictment of AG Ken Paxton revolves around his failure to abide by Texas securities law by failing to register as an investment advisor and committing securities fraud. The allegations first became public during the 2014 Republican runoff election for Attorney General when the Texas Tribune found that Paxton violated state securities law and was reprimanded and fined by the Texas State Securities Commission. Months after the Tribune report, the Lone Star Project learned that then-Speaker of the House, Joe Straus, may have been urging the Travis County District Attorney to move quickly on an investigation into Paxton in a last minute attempt to replace Paxton on the November ballot. Straus and his top allies were unsuccessful, and Greg Abbott, Dan Patrick and other top Republicans remained silent.

In summer of 2014, the non-partisan watchdog group Texans for Public Justice filed a criminal complaint against Paxton with the Travis County District Attorney. As the evidence mounted that Paxton committed a felony, the Lone Star Project reported that Paxton had voted for the criminal statute that he violated. As election day neared, the Travis County DA announced that any investigation into Paxton would happen after the election. Following election day, and after Paxton was sworn in as AG, the Texas State Securities Board reviewed documents that implicated Paxton for securities fraud, even finding that Paxton and his business partner altered state disclosure forms. This revelation helped confirm that Paxton had indeed violated state law.

In Spring 2015, the Lone Star Project submitted research and documents to the Collin Co. Grand Jury investigating Paxton detailing a series of questionable property transactions in Collin County involving Paxton. The submission presented facts about a potential use of insider information by Paxton and his associates that could rise to the level of criminal activity.

In August of 2015, the Collin Co. Grand Jury indicted Paxton on three felony counts for securities fraud and other crimes. Paxton was booked and released on bond. Paxton continues to be out on bond to this day. Under a year after being indicted for violation of state securities law, the federal Securities and Exchange Commission filed a separate complaint in district court alleging that Paxton had engaged in federal securities fraud as well.

The legal fees for the ongoing criminal case has cost Paxton hundreds of thousands of dollars. In 2016, Lone Star Project detailed Paxton taking over $300,000 in gifts from political allies to fund his criminal defense efforts. The Dallas Morning News reported that in 2015, Paxton had accepted $100,000 for his criminal defense fund from a CEO who was under investigation by the State of Texas for fraud. This finding prompted the Kaufman County District Attorney to begin an investigation into the $100,000 gift to Paxton and whether Paxton had violated state limits on gifts to public officials.

Despite being under felony indictment for all but seven months as Attorney General, Paxton and his legal team continue to use every legal maneuver to delay to avoid trial, judgement and a possible prison sentence. In fact, Lone Star Project research found in 2018 that Paxton’s approach to distract from his ongoing legal issues was working. As of Summer 2018, only 11% of news stories mentioning Paxton since 2017 had mentioned Paxton’s criminal indictment.

Paxton’s misuse of office for personal and political gain
While attention has focused on Ken Paxton’s ongoing criminal indictment, Paxton’s ethical lapses go well beyond violating a state securities law that he voted for as a member of the Texas State House. Lone Star Project research has detailed an extensive history of Paxton using the Texas Legislature to personally profit and avoid criminal responsibility.

Following the election of Paxton’s wife, Angela Paxton, to the Texas Senate, the Lone Star Project obtained emails through Texas Public Information requests between the office of Senator Angela Paxton and senior staff of Ken Paxton’s Attorney General’s office coordinating legislation to change Texas security law. The bill filed by Paxton and reviewed by the Attorney General’s office could have benefited Ken Paxton’s legal efforts to avoid conviction for felony swindling charges pending against him. As Lone Star Project disclosed emails between the offices, Dallas Morning News questioned the ethics of the Paxton, saying “We worried that Angela Paxton would be a walking conflict of interest on matters that concerned her husband. Unfortunately, she is proving our worries to be founded.”

While serving himself in the Texas Legislature, Paxton earned a reputation as a politician who has parlayed his public service into private financial gain. As the Houston Chronicle reported, Paxton entered the legislature in 2003 with interests in only two private businesses. Since then, the number has grown to over two dozen. Early in his legislative career, Paxton worked to gain a $10 million contract for a business in which he invested in before entering the legislature. The company bragged about their influential shareholders that included Paxton and another member of the Legislature. Despite the company bragging about influential shareholders, like Paxton, then State Rep. Paxton failed to disclose his interest in the company on required state financial disclosures. This wasn’t the first time that Paxton hid interest in business on required state documents –Paxton even failed to disclose ownership of a Collin Co. professional football team that publicized his interest in the franchise.

And finally, just to wind things up, Paxton has even pilfered a Mont Blanc pen at the Collin County courthouse, not realizing he’d been captured on video making away with the $1,000 writing instrument.

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