Texas Attorney General Ken Paxton is scheduled to appear before a Houston judge on Thursday — eight years after he was indicted for securities fraud, and ahead of a looming Texas Senate impeachment trial.
Here's everything you need to know about the allegations levied against Paxton.
What criminal activity has Paxton been accused of?
In this particular case, which is being heard in a Harris County district court, Paxton is accused of defrauding investors in a tech startup called Server Inc., based in McKinney. The company gave Paxton 100,000 shares of stock for recruiting investors in 2011, and Paxton was promised to be paid 30% of the asset management fees collected.
However, Paxton is accused of not disclosing any of this to the investors when he was soliciting them. That to Paxton's indictment by a Collin County grand jury in 2015. He faces two counts of securities fraud and one count of failing to register with state securities regulators. The charges carry a punishment of up to 99 years in prison.
Paxton is also under an unrelated federal investigation over alleged abuse of office. He has denied wrongdoing in all cases.
Why has Paxton been under indictment for so long?
Paxton was indicted in the summer of 2015, right after being elected for the first time, and the case still has not gone to trial. There are multiple reasons for the delays — among them, a disagreement over payments to those prosecuting the case and a push by Paxton’s lawyers to dismiss the charges. But the main reason has to do with the venue for the trial. Prosecutors wanted to take the trial out of Collin County, where Paxton lives, claiming that it's impossible to have a fair trial there. They were successful in 2017 — the trial was moved to Houston — but then Paxton's attorneys were able to have the case sent back to Collin County in May of 2021. Finally, last month, the Texas Court of Criminal Appeals ruled that the trial must take place Houston.
Does the securities fraud case relate to the attorney general's impeachment?
Paxton was impeached by the Texas House of Representatives in May. There are 20 articles of impeachment against him, and three of the articles have to do with the securities fraud case. Two are obstruction of justice — Paxton is accused of protracted delays to thwart the judicial process. A third article is related to false statements in official records. The indictment said Paxton made false statements to the Texas State Securities Board.
Paxton called his impeachment "illegal." What's his legal argument?
Paxton's attorneys say 19 of the 20 articles of impeachment have to do with allegations that happened before the Republican was most recently reelected. That's an important distinction here: most recently reelected. They claim the impeachment violates a legal rule called the "prior term doctrine" — under the Texas Constitution, a public official cannot be removed from office for acts committed before the person's election.
The indicted attorney general's lawyers say the doctrine refers to the official's most recent reelection — not the first time an official is elected. That would mean any alleged misconduct that occurred before the last time he was sworn in to office — Jan. 10, 2023 — can not be held against him.
Todd Curry, an associate professor of political science at the University of Texas at El Paso, said Paxton’s lawyers are using this strategy to defend their client even when it seems to be a long shot.
“The thing about the ‘prior term’ is that it’s very Texas-centric — this isn’t something we would talk about on the national level,” Curry told The Texas Newsroom Wednesday. “But the problem with that is that it’s so rarely used and has been so rarely used that there actually exists legal precedent on both sides of how it might be applied.”
Lt. Gov. Dan Patrick, as presiding officer of the Senate court of impeachment, will have to decide whether or not to grant that motion.
The Senate trial is expected to start on Sept. 5. Paxton has vowed not to show up or testify. It's yet to be seen if Patrick ends up applying some pressure and forcing him to testify in front of the senators, and in front of the state of Texas.
