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Kent Schaffer

Prosecution responds to Paxton’s motions to quash

They’re pretty harsh.

In a 19-page court filing peppered with disdain — one footnote likens Paxton’s defense to an exchange from the 1978 film Animal House — the prosecutors called the attorney general’s legal arguments this week that the judge overseeing his case abused his discretion a “pre-trial shell game” based on a “quicksand-like foundation.”

“Paxton’s motion is a tale of sound and fury calculated to cast himself as a victim, and not a criminal defendant, in the court of public opinion,” they write. “That Paxton’s motion is not only desperate, but utterly without merit is predictable; that it recklessly and unnecessarily tars both a respected jurist and his spouse without a legal or factual basis to do so is unconscionable.”

[…]

Asking the court to reject what they at one point refer to as a “Grassy Knoll-like conspiracy … far more appropriate as a plot point in an Oliver Stone motion picture,” prosecutors Brian Wice, Kent Schaffer and Nicole DeBorde noted that the three charges against Paxton are the result of a “comprehensive investigation spearheaded by the Texas Rangers.”

His legal arguments, they write, are based on “a stunning lack of any controlling legal authority to support his unsupported and unsupportable claims … [he] wants this Court to quash these indictments based on the cumulation of non-errors, in the face of long-standing authority to the contrary.”

See here for the background. My first thought (actually, my second thought after “How can you allude to an Animal House reference without specifying it?”) was that they must be comparing Paxton’s defense to the Otter Defense, which made me wonder if the prosecutors had inadvertently cast themselves into the roles of Greg Marmalard and Dean Wormer. Thankfully, The Scoop Blog has the goods:

The prosecutors’ motion also takes a clever whack at the defense’s arguments by citing the 1978 film Animal House:

Paxton’s insistence at crafting an alternative narrative, one that avoides any mention of his own criminality, while it re-writes, distorts, or simply ignores the historical facts that inform his claim, calls to mind the following cinematic exchange. OTTER: “We’ll tell Fred you were doing a great job taking care of his car, but you parked it out back last night and this morning… it was gone. We report it stolen to the police. D-Day takes care of the wreck. Your brother’s insurance company buys him a new car.” FLOUNDER: “Will that work?” OTTER: “It’s gotta work better than the truth.”

Tarrant County Judge George Gallagher is presiding over Paxton’s criminal case.

Ouch. They have a copy of the prosecution’s response, and it’s worth a read. Again I’d love to know what the lawyers think. No word as to when the judge may take action. I can’t wait. The Press has more.

Not so fast with those subpoenas

The special prosecutors in the Paxton case respond forcefully to his legal team’s grand jury-related subpoenas.

Best mugshot ever

Special prosecutors in Ken Paxton’s felony securities fraud case are seeking to quash subpoenas his lawyers filed last week seeking information about the grand jury selection process.

Paxton’s legal team last Thursday subpoenaed four Collin County court reporters for information related to the selection and empanelment of the grand jury that indicted the first-term attorney general in July. A fifth subpoena requests information on “a personnel action regarding a deputy clerk” from a human resources employee.

The prosecutors on Tuesday asked presiding Judge George Gallagher of Tarrant County to shoot down the subpoenas.

“Paxton’s applications are an improper, indeed, desperate attempt at obtaining pre-trial discovery, fall far short of meeting the standard of materiality and relevance required by controlling legal authority and constitute an unsupported and unsupportable attempt to conduct the very type of fishing expedition anathema to the criminal justice system,” their motion states.

The motion to quash says Paxton’s attorneys improperly used the subpoenas as weapons for discovery and did not demonstrate that the information sought would be material to his case.

“Absent a claim that members of a identifiable minority group were purposefully excluded from serving on the grand jury, nothing about the random selection and empanelment of this grand jury could ever come close to meeting the threshold mandate of materiality,” the motion states.

See here for the background. The stenographers also filed motions, having to do with the cost of providing full transcripts (they get paid by the word) and what if any of the testimony should be excluded. I can’t tell which side is more likely to be blowing smoke here, but we ought to find out quickly one way or the other.

The hearing is scheduled for Oct. 16 at 1:00 p.m. in the Tarrant County courtroom of Judge George Gallagher. The judge that day could decide whether to quash the subpoenas, or enforce them, which would require court employees to hand over transcripts, audio recordings and other information related to the grand jury selection and empanelment process.

Paxton attorney Bill Mateja said he expects Gallagher will make a decision that day.

“We’re hopeful that he will allow the subpoenas to stand and not quash them,” Mateja told the Chronicle on Thursday. “This is a very common request for the grand jury transcripts.”

Mateja said he does not expect the proceedings to last very long, and has not discussed with Paxton whether he will attend: “It’s fairly routine on very preliminary matters that the clients don’t show.”

Like I said, clearly one side or the other is going to be very disappointed. We’ll know soon enough. Trail Blazers, which has a copy of the prosecution’s motion, has more.

Paxton seeks grand jury information

Ken Paxton’s legal team has filed five subpoenas seeking more information relating to the grand jury that indicted him.

Best mugshot ever

The defense seeks a complete transcript and audio recording related to the selection of the grand jurors who indicted him.

[…]

The transcripts would reveal what, if anything, came up about Paxton and possible criminal charges during the selection process of grand jurors who were drawn from Republican-dominant Collin County.

In Collin County, two grand juries are picked by district judges from a random pool of registered voters to serve six-month terms. Only one grand jury heard evidence in Paxton’s case and issued the indictments. But Paxton’s defense team applied for records on the selection of both grand juries serving in the July to December 2015 term.

The defense is also seeking the transcript and audio recording for the selection of the two grand juries that served in the first six months of this year.

Those grand jurors were contacted at their work and their home about the Paxton investigation. One grand juror also sent a letter to the Travis County district attorney’s office seeking its investigative file on Paxton. That letter came before Collin County District Attorney Greg Willis requested the Texas Rangers open an investigation.

Shortly after that, Willis recused himself from the case. Houston defense attorneys Kent Schaffer, Brian Wice and Nicole DeBorde were appointed as special prosecutors in the case against Paxton.

The defense’s final subpoena application seeks documents from the county’s Human Resources Department “related to a personnel action involving a deputy district clerk.”

The records don’t offer any further details. It’s unclear whether this involves the clerk who mistakenly sent out an email in July listing the grand jurors’ names.

According to the Chron story, special prosecutors Brian Wice and Kent Schaffer intend to file a motion opposing the subpoenas. I don’t know what Team Paxton hopes to accomplish with this – the story says they’re claiming the jury was stacked against Paxton, which seems like a stretch given how many friends in the county he has, but I suppose anything is possible – but I’m not the one being paid the big bucks to keep his sorry heinie out of jail. We’ll see what the judge makes of it.

Paxton the political advisor

Interesting.

Best mugshot ever

The former CEO of the technology firm tied to Texas Attorney General Ken Paxton’s securities fraud indictment told investigators he paid the then-lawmaker to provide information on how to market his product to government agencies, according to a new brief in the case.

The disclosure, filed Wednesday by the special prosecutors appointed to the case, also raises questions about the former CEO’s credibility, noting he gave different accounts of Paxton’s involvement with his firm to the Texas Rangers and the U.S. Securities and Exchange Commission during a federal fraud probe.

State and federal laws require prosecutors to disclose evidence that may be beneficial to a defendant in what is called a “Brady notice,” named for a Supreme Court ruling – Brady v. Maryland – that says criminal suspects are entitled to exculpatory information uncovered by prosecutors.

Wednesday’s filing states that William Mapp, then CEO of the McKinney technology firm Servergy, told the SEC in 2014 that he had handed over $100,000 worth of stock in his company as a commission for Paxton to solicit new investors. At the time, the federal agency was investigating Servergy over allegations it defrauded investors.

Mapp later told investigators with the Texas Rangers that Paxton refused the commission and accepted the stock “in exchange for Paxton being a political adviser to the company and for providing information about upcoming opportunities for Servergy to market their servers to government data centers,” the Brady disclosure states.

The special prosecutors, Kent Schaffer and Brian Wice, declined comment on the filing Wednesday.

“I can’t really say what the impact of the Brady Notice regarding Mr. Mapp is going to be, except to state the obvious – the prosecutors believed that the purported discrepancy in his positions was favorable to the defense or that it was a significant enough change that they were required to let us know, credibility wise,” Dan Cogdell, Paxton’s lead defense attorney wrote in an email Wednesday evening.

“It is interesting to see that some of the State’s theories as to what happened or didn’t happen seem to be evolving fairly quickly over a short period of time,” he wrote.

Nice to know that when defense attorneys get appointed as special prosecutors that they take Brady requirements seriously, isn’t it? As to the effect it may have on this case, who knows? It will likely make William Mapp’s credibility more of an issue now, but it still doesn’t exactly make Paxton look squeaky clean. We also don’t know what else the prosecutors may have up their sleeve. Wait and see what comes out at trial, that’s still the best strategy. The Statesman, the Press, and WFAA have more.

Still working out Paxton prosecution costs

Collin County is still hoping to do this on the cheap.

Best mugshot ever

Collin County officials expect to budget $100,000 to prosecute Attorney General Ken Paxton, but hope to eventually slash that amount by two-thirds.

The county Commissioners Court on Monday evening is expected to discuss how much it will cost to pay the three special prosecutors appointed to try Paxton, who was indicted in July on three felony charges of violating state securities laws.

Judge Keith Self, who sits on the five-member court, said he expects the panel to approve an allocation of $100,000 for the prosecution, but he hopes that amount will be cut to $33,000 once the county begins receiving invoices from the prosecutors.

Last week, the commissioners court unanimously passed a resolution urging Judge George Gallagher, the Tarrant County jurist presiding over Paxton’s case, to cap prosecution costs at the lower figure, citing Collin County’s rules surrounding indigent defense.

On Monday, Self told the Chronicle that Gallagher had responded to the request by noting he could not predict the total final cost of the prosecution.

“He wrote me a very cordial note back and said that he was unable to estimate expenses and time of the trial. So, he was unable to shed any light on the expenses,” said Self, who said while $100,000 will be budgeted, he thinks spending that amount would violate the county’s rules regarding a prosecution of this kind.

“We read the law as being very clear,” said Self. “We’re trying to be cautious with our budgeting.”

[…]

Texas law states that an attorney pro tem who not a state attorney like Willis “shall receive compensation in the same amount and manner as an attorney appointed to represent an indigent person.”

Each county sets its indigent defense fee schedule. Some counties, like Harris and Travis, have no caps but require fees to be “reasonable.” Collin County’s, in contrast, places specific dollar restrictions on indigent defense.

See here for the background. The problem here is in those last two paragraphs. Collin County doesn’t allocate enough money for indigent defense, which in this case leaves them in the lurch for the special prosecutor they had to get since Ken Paxton is everyone’s buddy. One of those buddies is threatening to sue if they wind up spending any more than that $33K. The special prosecutors could take one for the team and agree to work for pittance wages, but they shouldn’t have to, and the judge shouldn’t feel any compunction to let them or to make them. Let this play out as it will, and if Collin County winds up holding the bag, maybe they’ll reconsider their penurious ways with indigent defense. I’m sure they can afford it. Trail Blazers has more.

Paxton hires new attorneys

Let’s see if he can keep them.

Best mugshot ever

Facing a high-profile securities fraud trial that could cost him his job and land him in prison, Attorney General Ken Paxton has enlisted the help of two top defense lawyers known for their forceful personalities and successes in the courtroom.

Paxton on Thursday announced he has hired high-powered Houston lawyer Dan Cogdell and former state and federal prosecutor Terri Moore of Fort Worth to defend him against three felony indictments. Both have extensive trial experience, and are known for their ability to gain the trust and understanding of juries.

“I believe that I have secured a strong and aggressive team of highly competent and respected attorneys,” the first-term attorney general said in a statement. “I am entrusting them to courageously lead this case, fighting for truth and justice.”

[…]

Paxton’s original attorney, former federal judge Joe Kendall, stepped down from the case Aug. 27, the day of his arraignment in a Fort Worth courtroom. State District Judge George Gallagher, the Tarrant County jurist who will preside over any trial, gave Paxton until Sept. 3 to find new legal representation.

Gallagher extended the deadline until Thursday after Paxton initially was unable to secure an attorney.

Special prosecutor Brian Wice, one of a team of three Houston criminal defense attorneys assigned to the case, called Cogdell one of the state’s top lawyers: “Dan’s a great lawyer and a long-time friend, and it’s not a cliché to say he’s an ‘A-list’ lawyer.”

A passionate lawyer who races motorcycles and was once known for wearing cufflinks shaped like buttocks in court, Cogdell’s forceful personality often is on display on and off the job. Early in his career, he shocked himself with a cattle prod in front of a jury to counter an expert witness’ testimony that it could cause a heart attack.

“I was a big frat boy at UT; in hell week, cattle prods are pretty much normal,” Cogdell told the Chronicle in 2004. “But I did have to practice for about four hours. I’m committed to my clients.”

Called “a Texas trial legend” by Best Lawyers in 2014, Cogdell said he preferred to defend his clients rather than settle.

See here for the background. The story goes on to describe Moore, a former First Assistant DA under Craig Watkins in Dallas, as a “pure predator” and “fast, loud, and colorful, going off on harangues about the justice system.” This ought to be a heck of a trial when we finally get to it. It’s not expected to begin for a year, however, so we’ll just have to be patient and be entertained by whatever pretrial motions get filed in the meantime. The Trib and Trail Blazers have more.

Paxton’s first day in court

It was a little weird.

Best mugshot ever

Texas Attorney General Ken Paxton on Thursday pleaded not guilty to violating state securities laws, while also telling the judge presiding over his felony case that he currently does not have an attorney.

Joe Kendall, Paxton’s lead counsel until Thursday morning, appeared in the Tarrant County courtroom with the first-term attorney general, but told the judge about halfway through the proceeding that he would be stepping down. He did not elaborate, saying only that there were issues in the matter that spurred him to do so.

His filed request to the judge to be removed from the case, however, cites unspecified “differences” between Paxton and Kendall’s law firm

“During the course of this representation, differences have arisen that adversely affect the attorney client relationship making further representation untenable,” the request reads.

Paxton told the judge he currently did not have legal representation, and that Dallas lawyer Pete Schulte, who had said he formally had joined the legal team, had not been hired as co-counsel.

“Yes, I’ll be having other counsel,” Paxton told Judge George Gallagher. “I do not right now… I don’t know who exactly will be on the team.”

Brian Wice and Kent Schaffer, two Houston criminal defense attorneys appointed to prosecute the case, said they did not know why Kendall, a former judge, was leaving Paxton’s legal team. In court, they told the judge they had amassed 14,000 pages of evidentiary documents in electronic form and were converting another seven to eight thousand.

Judge Gallagher set a Sept. 30 deadline for Paxton to file a motion to quash or take issue with his three felony indictments, issued by a Collin County grand jury last month. The state will have until Oct. 15 to respond and then the judge will rule. If he sides with Paxton, the prosecutors will be able to re-present their case to the same grand jury that indicted Paxton.

The Trib adds on.

During the hearing, Kendall indicated Paxton had retained Dallas-based lawyer Pete Schulte as counsel, appearing to contradict what the attorney general said about not having a lawyer. Gallagher also confirmed that Schulte had told him that he should be included on communications about the case.

Asked about the discrepancy, Paxton said he meant that he had not yet formally brought Schulte into the case as a lead attorney.

Later that morning, Schulte tweeted that “clarification will be forthcoming today” about who would be representing Paxton. “It’s unfortunate that Joe Kendall created this confusion in court as he was leaving the team,” Schulte said.

Special prosecutors Brian Wice and Kent Schaffer greeted the defense’s changing counsel with skepticism.

Telling the judge they would not raise a formal objection “this time,” Wice pointed out that Paxton was on his “third lawyer in as many months.” He said that he hoped the pattern did not become a stalling tactic.

Speaking to reporters after the hearing, Wice said he had not known Kendall planned to step down. But he added: “Nothing surprises me.”

I will admit, Paxton’s sudden change of attorney surprises and intrigues me. I suppose it’s most likely the case that there’s nothing to it – maybe their personalities didn’t mesh, maybe they couldn’t agree on a strategy, who knows – but it’s impossible to not speculate about more lurid scenarios. All foolishness aside, I’ll be interested to see what his new attorney has to say about the indictments. He’s going to have to do a lot of reading real fast to be able to prepare any motions by that September 30 deadline. Trail Blazers and the DMN Crime Blog have more.

Paxton reindicted

On the same charges, with slightly different wording.

Best mugshot ever

After re-filing indictments against Attorney General Ken Paxton in his securities fraud case, two special prosecutors are pushing back against criticism from Paxton’s attorney, who says the recent action shows that they “botched” the proceedings.

“It is not unusual in any felony case, particularly fraud cases, for prosecutors to ask the grand jury to re-indict so as to provide sufficient notice to the accused as to the nature of the criminal conduct with which he is charged,” Kent Schaffer and Brian Wice, the special prosecutors said in a prepared statement Tuesday evening.

On Tuesday afternoon, the prosecutors re-filed two of the three charges Paxton faces — two counts of first-degree felony securities fraud. The third charge — accusing Paxton of acting as an investment adviser or representative without registering – remained untouched.

[…]

In the charge naming Cook, for instance, prosecutors originally stated Paxton “had not, in fact, personally invested in Servergy.” The new charge states Paxton “had not, and was not investing his own funds” in the company.

Joe Kendall, Paxton’s attorney, criticized the re-indictment, saying it illustrated a process fraught with “troubling issues.”

“They had months to investigate and then rushed to indict,” Kendall said in a statement. “Now, the special prosecutors are back to clean up the botched indictments. It should make every fair-minded person question the process in this case.”

Not so, the prosecutors replied.

“Contrary to the assertion of Mr. Paxton’s criminal defense lawyer that the indictments charging his client with two counts of first-degree felony securities fraud were ‘botched,’ we obtained re-indictments to defuse the boilerplate arguments predictably advanced by the defense that the original indictments lacked specificity or were otherwise ambiguous,” Schaffer and Wice said in their statement.

Philip Hilder, a Houston-based criminal lawyer, said that while re-indictments don’t happen all the time in such cases, they are not rare.

“In this particular case, it’s clear that the prosecutors were trying to get out front and clean up the indictment before the defense had the opportunity to attack the pleadings,” he said after reviewing one of the re-filed charges.

You can see a copy of the indictments – there are two, one for each of the complainants in the first-degree cases, which are the ones from the expanded investigation – in the Chron story. I don’t know how often this kind of “cleanup” happens, but I can say that it happened in the Tom DeLay case. The fact that he was ultimately let off the hook by the Court of Criminal Appeals didn’t have anything to do with that. I’d be interested in hearing what any attorneys have to say about this, but beyond that it seems like a fairly mundane update to this story.

Ken who?

State Republican leaders don’t have much to say about our allegedly felonious Attorney General.

Ken Paxton

Texas’ Republican leaders Sunday continued their radio silence on the indictment of Attorney General Ken Paxton on three felony fraud charges.

Paxton, who was elected as part of a conservative GOP sweep that put Gov. Greg Abbott and Lt. Gov. Dan Patrick into office, will reportedly surrender to authorities Monday in North Texas on felony charges stemming from an alleged investment scheme into the McKinney-based technology company Servergy, as well as his failure to register as an investment advisor representative with the state.

Republicans’ silence comes in stark contrast to the support that followed then-Gov. Rick Perry when he was indicted on felony charges last year. Party leaders were quick to publicly decry those charges as politically motivated and insist Perry would prevail.

Paxton’s indictment could spell trouble for the state’s GOP leadership – generally with voters who may see it as symptomatic of ethics problems in Austin, and even among the conservative grassroots groups that helped elect Paxton but insist that elected officials should be squeaky clean.

Democrats and government-watchdog groups continue to blast the indictment Sunday as high-lighting cronyism among the state GOP leaders. Several called for his resignation.

Neither Abbott nor Patrick, who both championed ethics during the campaign and in the legislative session earlier this year, has commented on Paxton’s predicament.

[…]

The Texas Republican Party did not return calls and emails seeking comment since the news broke Saturday. Other Paxton supporters, including state legislators who count the same conservative groups among their supporters, remained silent over the weekend.

Calls to a spokesman for U.S. Sen. Ted Cruz were not returned Sunday.

But they have not always been so silent. During last year’s campaign, an array of GOP luminaries from Abbott to Cruz, now a presidential contender, were effusive in their praise for Paxton even after he admitted and was punished for violating state securities.

Cruz, a star among Christian conservatives and tea party activists, referred to Paxton as “a good friend” at campaign rallies and cited Paxton’s support of straight-line conservative causes from opposing Obamacare and federal overreach to support of voter ID and more border security.

“You’re a good, strong conservative leader,” Cruz said of Paxton in one speech.

Paxton, in return, ran heavily on Cruz’s support, a key proof of his conservative bona fides that some political observers said helped him clinch a victory in the GOP primaries against Rep. Dan Branch, a favorite among establishment Republicans.

Privately, some Austin insiders said the issue was Paxton’s to address. Since it did not involve allegations of wrongdoing in his role as a state official, and because the case involved private business dealings, they said state business was not involved.

No doubt, this is going to cause heartburn for some people, from Cruz to Abbott to Dan Patrick and on down. That will be one of the fun parts about this saga. It’s not like no one could have seen this coming – Dan Branch and Sam Houston both made an issue of it in the elections last year. There were enough voters who cared more about Paxton’s stances on social issues than his integrity or capability, and so here we are. Still, let’s not forget how much better we could have done in this department.

Paxton’s Democratic opponent from 2014, attorney Sam Houston, said when the November election rolled around there was a cloud of controversy hanging over the Republican nominee. By then, Paxton had already easily defeated state Rep. Dan Branch, R-Dallas, who had made Paxton’s alleged ethical lapses the centerpiece of his primary runoff.

“Dan Branch and I both talked about a pattern in the election. So I don’t think this is anything surprising or new,” Houston said. “I hate to say I told you so because that doesn’t make me feel better, but we were saying that it was likely that once he was elected that he could be indicted and sure enough, it’s happened. It’s just been even more counts than I even thought would happen.”

[…]

As word of the indictment spread, it was Tea Party activists who were the most willing to speak out about it. Writing for Empower Texans, an influential conservative group, its general counsel Tony McDonald questioned whether the investigations of Paxton had ties to the leadership of House Speaker Joe Straus.

Saying House leaders’ “motives are obvious,” McDonald wrote hours before word of the indictment spread: “Paxton rose to statewide prominence when he challenged Straus for the speakership in 2011. Further, the three are still stinging from Paxton’s defeat of their ally and Straus’s boyhood friend, Dan Branch, in the 2014 primary for Attorney General.”

Those voters who have sided with Paxton through the controversy, [SMU poli sci prof Cal] Jillson said, need to “blink hard twice and ask themselves what they were thinking.”

Some conservatives are taking a less defensive approach to Paxton’s legal troubles, though. North Texas Tea Party activist Mike Openshaw wrote on Facebook that Paxton should “step aside” if the reports about his indictment were true.

“Texas conservatives need to maintain a higher standard,” Openshaw wrote. “We aren’t Democrats.”

Yeah, we Democrats knew he was a crook a long time ago. Welcome to the table, but I’m not holding my breath waiting for your colleagues to come along with you. They’re all doing their best to pretend nothing has happened.

“Judge [George] Gallagher has specifically instructed both parties to refrain from public comment on this matter, and we are honoring the judge’s instructions,” Paxton attorney Joe Kendall, a former federal judge, said in a statement.

It was a far cry from the full-throated and indignant denials of other Texas leaders who have — on not entirely rare occasions — found themselves indicted. And it indicated that the state’s top law enforcement official is facing months, if not years, of his office and his stature being diminished under the weight of criminal charges.

“His situation is darkened,” said Republican political consultant Bill Miller.

The difficulties of Paxton’s defense are already stacking up: The investigation was run by the Texas Rangers; a hometown Collin County grand jury indicted him; and the charges spring from his questionable involvement in troubled financial deals, Miller said.

Paxton is accused of encouraging investors in 2011 to put more than $600,000 into a McKinney-based technology company, Servergy Inc. He is charged with failing to disclose to investors that he was making a commission on their investment. And he is alleged to have misrepresented himself as an investor in the company.

In the wake of the allegations has come a deafening silence from Republican colleagues.

“That’s the loudest noise in the room,” Miller said.

“The Democrats will yell for his resignation, and the Republicans will be silent,” he said. “However it’s resolved, he’s seriously wounded.”

They may have to say something now that Paxton has turned himself in for booking and a spectacularly ugly mugshot – seriously, where was Rick Perry’s stylist when Paxton needed him? The state Republican Party did issue a a perfunctorily snotty statement reminding us that even someone like Ken Paxton is innocent until proven guilty (and not subsequently cut loose by the Court of Criminal Appeals). Here’s one reason why at least some Republicans may not be out there standing by him: At least one, Rep. Byron Cook, is a complainant. Awkward! Several other Republicans lost money in a deal involving Paxton as well, though I don’t know if that one is part of the charges against him. Point being, as this is about money and not politics, the lines could get just a little blurry. Settle in and enjoy the ride going forward. Newsdesk, BOR, Hair Balls, Paradise in Hell, Texas Leftist, Trail Blazers, the Lone Star Project, the Observer, the full-of-ennui Burkablog, the Trib, and the Current have more.

UPDATE: Here’s the Republican Party of Texas’ statement on Paxton’s indictment. I did mention that they put out a statement in my writeup above, but there’s a pull quote from a story earlier in the cycle when they hadn’t yet put a statement out, so I’m putting this here for clarity.

Paxton indicted

It just got real, y’all.

Ken Paxton

Texas Attorney General Ken Paxton has been indicted on three charges in Collin County, according to KXAS-TV NBC 5, The Dallas Morning News’ media partner.

The grand jury’s indictments were issued on Tuesday, then immediately sealed. Paxton was indicted on two counts of first-degree securities fraud and one-count of third-degree failure to register. Sources tell KXAS’s Scott Gordon they will be unsealed Monday.

According to WFAA-TV, a Tarrant County judge has been appointed to the case.

[…]

“We went into this knowing that the Texas Rangers would uncover whatever evidence was there and if there was a sufficient amount that we would present it to a grand jury, so that’s what we did,” Kent Schaffer, one of the special prosecutors assigned to the case told The New York Times. “The grand jury elected to indict, and the indictments all speak for themselves.”

The Trib fills in some details.

Kent Schaffer, one of two special prosecutors who took the Paxton case to the grand jury, told The New York Times that the indictments include three felony counts — two alleging first-degree securities fraud and another alleging a third-degree charge that he failed to register as a securities agent.

Schaffer said Paxton is accused of encouraging others to invest more than $600,000 in a company called Servergy Inc. without telling them he was making a commission and misrepresenting himself as a fellow investor. The grand jury also charged him with failing to register with state securities regulators for soliciting clients for Mowery Capital Management in return for fees.

[…]

State officials do not have to step down from office if they are indicted, but convicted felons cannot serve.

[…]

Another potential problem for Paxton is the cost of defending himself. If he were charged for something he did as a state officeholder or as a candidate, his campaign funds could be used to pay the lawyers who defend him. In the case of charges that stem from his private or personal business activities, his campaign funds are out of bounds, according to experts in state ethics laws. Paxton would have to pay for his defense out of personal funds or find some way to set up a separate defense fund that could solicit contributions on his behalf.

I doubt he’ll have too much trouble raising money to defend himself, but we’ll see how things look on Monday when the indictment is unsealed. Not too many people want to hop on board a ship that’s going down. I also doubt that Paxton will step down any time soon, as it’s much harder to raise the kind of dough he’s going to need to defend himself as a private citizen than as a statewide officeholder, but there will be plenty of calls for him to do so. Here’s the official statement from Texans for Public Justice, whose complaint last year got this ball rolling:

“The only acceptable response to today’s indictment of Attorney General Ken Paxton is his resignation. The state’s highest law enforcement officer must be held to the highest standards of conduct. Ken Paxton’s behavior disqualifies him from serving as Texas’ top cop.”

You’d think so, wouldn’t you? The real question, as Nonsequiteuse asked a month ago, is at what point will Greg Abbott begin to consider Ken Paxton a problem? How long is he going to be happy to work alongside an indicted felon? These are serious charges, and Paxton has already admitted to one of them. Up to you, Governor. Thanks to Scott Braddock for being the first to call my attention to this. The Lone Star Project, Newsdesk, and Hair Balls have more.

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.

L’affaire Paxton gets larger

Oh, yeah.

Ken Paxton

When Attorney General Ken Paxton publicly admitted that he violated a state securities law last year, the State Securities Board was obligated by law to gather evidence against him and immediately refer it to prosecutors who could seek criminal charges.

But prosecutors in Travis and Collin counties said the securities regulators did not refer Paxton’s case to them, an apparent violation of requirements set by state law, the American-Statesman has confirmed.

In May 2014, when Paxton was a state senator running for attorney general in the Republican primary runoff, he accepted a reprimand and $1,000 fine from the State Securities Board, whose five members were appointed by former Gov. Rick Perry.

In that proceeding, Paxton admitted to soliciting clients for a Texas investment firm without registering as an investment adviser representative — a violation that can be prosecuted as a third-degree felony under the State Securities Act — and without disclosing that he would receive 30 percent of management fees.

But despite state law that required Securities Board Commissioner John Morgan to “at once” refer evidence of a criminal violation to the appropriate prosecutors — a standard that has been in place since 1957 — there is no evidence that securities regulators did so in the Paxton matter.

Robert Elder, a State Securities Board spokesman, said the agency would not comment.

In Collin County, where Paxton lived while soliciting investment clients three times between 2004 and 2012 as an unregistered adviser, prosecutors received no information about Paxton’s activities from the board, said Bill Dobiyanski, first assistant district attorney.

In addition, the Travis County Public Integrity Unit — which prosecutes corruption by public officials — did not hear from securities regulators about Paxton’s admission of violating securities law, said Gregg Cox, director of special prosecutions for the Travis County district attorney’s office, which includes the Public Integrity Unit.

[…]

Allegations that the State Securities Board hadn’t followed the law were raised last week in a strongly worded letter sent to Wice and Schaffer by the director of the left-leaning Progress Texas PAC.

In a July 8 letter, Glenn Smith suggested that Gov. Greg Abbott, who was still attorney general at the time, also didn’t follow requirements set out in the Texas Securities Act.

“On the surface, those failures raise suspicions of widespread conspiracy among several agencies and officials aimed at minimizing the criminal exposure of Mr. Paxton,” wrote Smith in the letter, which he provided to the Statesman.

Cait Meisenheimer, an Abbott spokeswoman, declined to comment on Smith’s letter. Wice also declined to comment on the letter, and Schaffer could not be reached for comment.

In his complaint, Smith specifically names Texas Securities Commissioner John Morgan and Collin County District Attorney Willis.

“With something like this, which is a clear confession of a felony by Sen. Paxton, the sort of silence and inactivity of public officials was very suspicious to me from the beginning,” Smith said. “They were compelled to act and failed to act, and this deserves attention.”

See here, here, and here for the background on the State Securities Board stuff, and see the original Statesman story for a copy of the letter. It’s always the coverup that gets you, isn’t it? The State Securities Board, full of Rick Perry appointees, should have followed the law and done its duty. Attorney General Greg Abbott should have followed the law and done his duty. Collin County DA Greg Willis should have done his duty a lot more quickly and without having to be pushed into it. That’s hindsight for you. Now I really can’t wait till the special prosecutors start laying out their case to the grand jury.

Paxton grand juror names accidentally released

Oops.

Ken Paxton

A list of Collin County grand jurors was mistakenly released by an employee with the Collin County District Clerk’s Office.

The release violates a June 25 order by District Judge Chris Oldner that deemed the names and personal information of grand jurors in the current term to be confidential.

Grand jury proceedings are secret, but the names of those serving in this term are of particular interest because they will be hearing evidence, possibly as early as this month, alleging securities law violations by Texas Attorney General Ken Paxton.

Brian Wice, who was appointed along with Kent Schaffer as a special prosecutor in the Paxton case, said Thursday they were made aware of the release.

They issued a statement, saying: “While certainly unfortunate and inopportune, we trust that whatever harm the inadvertent disclosure of the grand jurors’ names and addresses might have caused was mitigated by Judge Oldner’s immediate and thoughtful response.

“Because both the state and Mr. Paxton are entitled to an investigation informed by fairness and confidentiality, we hope that whomever had access to the grand jurors’ personal information — especially members of the media — will respect their privacy during the pendency of their investigation.”

Messages left for Oldner and the District Clerk’s Office were not returned.

Radio station KRLD-AM reported Thursday that the grand juror names were mistakenly sent by an employee with the clerk’s office to 93 email recipients. A second, frantic email demanded all the unintended recipients “please immediately delete the previous email sent in error,” according to the news story.

Apparently, there was a mix-up with a previous grand jury. The Chron story fills in a few blanks.

In sealing the names, Judge Oldner cited previous instances were Collin County grand jurors were contacted with information regarding cases they were hearing. Oldner’s order states this information “was received outside the grand jury process and in violation of the laws of the state of Texas.”

The Houston Chronicle did receive the names of the grand jurors empaneled for the term that ended in June. After [Collin County DA Greg] Willis’ inaction, those members confirmed to the Chronicle that they had asked the Travis County District Attorney’s office for Paxton’s file to undertake their own probe.

“Collin County appears to be the venue where this evidence needs to be heard,” the grand jury vice foreman’s letter to Travis County read. “Therefore, we are requesting the documents be sent to us as soon as possible.

So in the end this is likely no big deal and no damage done. But man, does it ever seem like everything associated with Ken Paxton is cursed. Makes you wonder if one of his ancestors got in a feud with the Sianis family or something. What could possibly happen next?

Paxton could be in real trouble

Whoa.

Ken Paxton

The criminal investigation against Texas Attorney General Ken Paxton has taken a more serious turn, with special prosecutors now planning to present a first-degree felony securities fraud case against him to a Collin County grand jury, News 8 has learned.

Special prosecutor Kent Schaffer told News 8 Wednesday afternoon that the Texas Rangers uncovered new evidence during the investigation that led to the securities fraud allegations against the sitting attorney general.

“The Rangers went out to investigate one thing, and they came back with information on something else,” Schaffer told News 8. “It’s turned into something different than when they started.”

Schaffer, a Houston criminal defense attorney, said the securities fraud allegations involve amounts well in excess of $100,000. He declined to comment specifics of the fraud allegations.

A first-degree felony conviction is punishable by up to life in prison.

Ponder that for a moment – “punishable by up to life in prison”. Not that I expect any such outcome, but how often do you hear that sort of thing said about an incumbent elected official? Again, this may very well turn out to be nothing, or at least something a lot less than that. But still.

Schaffer said he and the other special prosecutor will begin presenting their case to a Collin County grand jury within the next few weeks. He said he anticipates eight to nine witnesses will appear before the grand jury.

“We believe that there’s sufficient evidence to present to a grand jury,” Schaffer said.

Schaffer said he also anticipates presenting a case involving failing to register, which is a third-degree felony.

The investigation had started with allegations that Paxton violated the law when he failed to register as an investment advisor with the state.

News 8 also learned Wednesday that Paxton had hired a former federal district judge.

“I met with General Paxton and he had retained me to look into the matter,” said Joe Kendall, who practices in Dallas. “I am honored that he did. He’s a good man.”

Kendall told News 8 that he met with Paxton “very recently” in Dallas and confirmed that he was hired within the past two days.

“I’m going to be helping look into the matter,” Kendall said, declining to comment further.

See here, here, and here for the background. The Chron story dredges up a quote from Paxton’s longtime flak Anthony Holm in which he says that “at least three other entities have thoroughly reviewed these matters and each chose not to proceed”. One of them was the Travis County DA’s office, which concluded it didn’t have jurisdiction. One was the Dallas County DA’s office, which didn’t say why it declined to move forward. I’m not sure who the third was, but this sure is beginning to sound like whistling past the graveyard.

Perhaps that’s why Paxton was so aggressive in his response.

“This appears to be a politically motivated effort to ruin the career of a longtime public servant,” Paxton spokesman Anthony Holm said in a statement that also accused the two attorneys of building their case in the press. “These attacks on Ken Paxton appear to have become a political hit-job in the media, perhaps having the effect of inappropriately influencing the grand jury.”

[…]

Holm said Thursday that neither Schaffer nor Wice have “significant prosecutorial experience,” adding that it appears only one case has been prosecuted between the two of them. Neither Schaffer nor Wice has worked as a prosecutor, but both have extensive backgrounds in criminal defense. Wice was on the team that defended former House Majority Leader Tom DeLay, R-Texas, against corruption and money laundering charges.

“Not only do they appear inexperienced as prosecutors, they are from Houston,” Holm said. “Meanwhile thousands of experienced prosecutors and former prosecutors are in the Dallas area.”

Wow. One wonders who it is that authored this “hit job” on Paxton, given that (as a commenter on this Trib story noted) he’s been “indicted in one of the most Republican counties – Collin County – by a special prosecutor appointed by a Republican judge who is a friend of Paxton, in an investigation that was led by the Texas Rangers, which is part of the state government, which is led by all Republicans”. I know he’s just playing to the cheap seats, but you’d think he could at least let us know who he thinks is persecuting him. As for the dig on the special prosecutors, I’m pretty sure that Schaffer and Wice know their way around a criminal courtroom, regardless of what table they’re sitting at. When was the last time Paxton himself was in a courtroom? If this were the runup to a sporting event, we’d say that he just provided some bulletin board material for his opponents. I don’t know if this would be motivational to Schaffer and Wice, but they’re human beings, too. I know I’d focus a little harder after being insulted like that.

Anyway. In case anyone is wondering, if at some point Paxton resigns, the Governor appoints a replacement, who must be confirmed by a two-thirds vote of the Senate. That could get interesting, but we’re way ahead of ourselves. I can’t wait till the grand jury proceedings begin. A statement from Texans for Public Justice is beneath the fold, and Burka, PDiddie, Campos, Juanite, the Current, and the Trib have more.

UPDATE: Well, this sure answers my questions about Schaffer and Wice.

Reached for comment late Thursday, Schaffer said Holm “never denies the criminal conduct.”

“I noticed that in Mr. Holm’s obligatory statement there was not one time that he said that Mr. Paxton did not do the things that we are looking at,” said Schaffer. “I found (that) very concerning.”

Wice and Schaffer issued a lengthy statement criticizing Holm’s remarks as “the usual sound bites, culled from the play book of any public official whose conduct places them in the cross-hairs of a grand jury investigation.

“Tellingly, Mr. Paxton feels that a Dallas address or a career spent as a prosecutor somehow trumps our over seven decades of trial and appellate experience as two of Texas’s most respected criminal lawyers,” the statement reads. “We were brought in from Houston to ensure that an investigation that could have easily been driven by partisan politics and political agendas would not.”

It adds, “The facts, which Mr. Paxton would rather ignore than acknowledge, are, as Churchill said, stubborn things. And that’s exactly what we will provide the grand jury with: the facts. Our investigation will continue to be informed by what our oaths as special prosecutors commands: to do justice. And sound bites and personal attacks won’t change that.”

It. Is. On. Get that popcorn popping.

(more…)

More complaints against Paxton

From the Lone Star Project, spotted on the Quorum Report with the original press release forwarded to my inbox:

Ken Paxton

Lone Star Project research has compiled significant information regarding the involvement of Texas Attorney General Ken Paxton in a series of questionable property transactions in Collin County. Some of the information gathered by the Lone Star Project has already been made public in press reports, while other information has not yet been reported on at all.

In reviewing the information gathered by Lone Star Project research, I realized that the actions of Attorney General Paxton may have gone beyond activities that warrant only political criticism. In fact, the information points to the potential use of insider information and actions by Ken Paxton and his associates that could rise to the level of criminal activity.

In light of this, the Lone Star Project submitted a detailed complaint to the U.S. Attorney in the Eastern District of Texas, which has jurisdiction over Collin County, last month. We also submitted the complaint to the Grand Jury in Collin County which is currently conducting a criminal inquiry into Ken Paxton’s violations of Texas securities laws.

Given that the ongoing investigation into Ken Paxton’s violations of state securities law, we believe his close involvement in questionable land transactions in Collin County also warrant the review of law enforcement officials.

Background:
Last year, the Dallas Morning News reported on a land deal involving Ken Paxton and his business partners involving the purchase of property in the City of McKinney for $700,000. The property was quickly flipped for a selling price of $1 million. The News report details the creation of an appraisal district and zoning change which raised the value of the property before the subsequent sale of the land by Paxton’s company. While Paxton denied knowing about the new zoning designation, associates within Paxton’s business lobbied local officials to obtain the change.

The letters sent by the Lone Star Project to the U.S. Attorney and the Collin County Grand Jury includes additional facts on the land transactions and raise new questions regarding Ken Paxton’s involvement. The information focuses on four specific areas:

  • Even following the 2014 Dallas Morning News story, key questions remain unanswered about the extent to which Paxton and his associates used insider knowledge and political connections to profit from the development of the McKinney Property.
  • A land swap with the City of McKinney in which a narrow strip of property owned by Paxton’s company was traded for a separate property on a nearby street corner – the trade that appears to be of significant benefit of Paxton. The same day of the trade, Paxton’s company flipped the newly acquired property to a private entity for an undisclosed amount.
  • In addition to profiting from the resale of the property acquired by the trade, it appears that a title company connected to Paxton provided the title insurance for the two transactions.
  • Paxton and his associates continue to hold property in Collin County that may also result in a significant profit when it is eventually sold.

Documents Attached:
Letter to the Collin County Grand Jury
Letter to the US Attorney
Background Document

I did blog about that DMN story from last May, but I only noted Paxton’s refusal to release his tax returns during the campaign, since caring about such things was apparently so 2010. Perhaps this is why he was so secretive about it. I can’t find any news coverage of this, so draw your own conclusions about how big a deal it is.

The news release touches on the ongoing investigation in Collin County, whose deadline date is as yet uncertain. Yesterday we got an update on where this stands.

Special prosecutors assigned to investigate Ken Paxton’s alleged violations of state securities laws said this week that they plan to take their case to a Collin County grand jury next month.

The confirmation comes just weeks after a judge expanded the probe to include possible fraud allegations involving the first-term attorney general.

“We are going to the grand jury,” special prosecutor Kent Schaffer told the Chronicle on Wednesday. The process will begin in July when the new grand jury is chosen, and Schaffer said he expects it to take more than the typical three-month period juries sit in Texas.

That puts any possible resolution of the inquiry into at least the October/November time frame. At least we know it’s moving along, which is more than we could have said earlier this year. Trail Blazers has more.

When might Paxton be prosecuted?

Attorney Ty Clevenger thinks the clock may be running out on the grand jury in Collin County.

Ken Paxton

As best I can determine, the limitations deadline for charging Texas Attorney General Ken Paxton with state securities violations is June 14, 2015. If so, that means the grand jury must indict Mr. Paxton at its meeting tomorrow or at its next meeting on Tuesday, June 9, 2015, or he cannot be prosecuted for those alleged violations.

[…]

According to transcripts of administrative hearings that were conducted during the week of March 9, 2015, Mr. Mowery asked his clients to backdate numerous documents, including one that was backdated to June 14, 2012. (I’m probably not supposed to have the transcript, but here it is anyway; and here are the state’s closing brief and Mowery’s closing brief). According to pages 285 and 287 of that transcript, the document was backdated to make it appear that Mr. Mowery informed Henry Allen and his wife (whose first name is not listed) about the referral fee arrangement with Mr. Paxton.

In reality, the Allens did not learn about Mr. Paxton’s kickback referral fee until April of 2014, when Mr. Mowery asked them to sign the backdated document. I have not seen the document itself because I do not have the hearing exhibits, but two sources have independently told me that June 14, 2012 appears to be the last time Mr. Paxton solicited clients for Mr. Mowery. Add three years to that date, and your limitations deadline is June 14, 2015.

Meanwhile, a source tells me that special prosecutors Brian Wice and Kent Schaffer have promised to present the case to the grand jury before its term expires on June 16, 2015. Even so, I do not understand why the special prosecutors would wait until so near the limitations deadline to present the case. Granted, I don’t know what they know, but this case appears to be pretty straightforward. Mr. Paxton either solicited clients or he did not, and either he was registered as a securities representative or he was not.

The Travis County DA’s office had already investigated the case before Mr. Wice, Mr. Schaffer and the Texas Rangers were assigned, and Mr. Paxton had already signed a sworn statement and an agreed order with the State Securities Board accepting a $1,000 fine because he solicited clients in 2012 without being registered. In other words, it appears that our attorney general has already admitted under oath that he committed a felony.

So how many more details do Mr. Wice and Mr. Schaffer need to gather before they can present the case to the grand jury? I realize they may not be ready to go to trial, but an indictment does not require a trial because it is not a conviction. The prosecutors only need to convince grand jurors that it is more likely than not that Mr. Paxton committed a crime. The trial comes later (if it comes at all).

I sure hope that means they’re getting close to doing something. In the meantime, the two special prosecutors may have more room to investigate:

In late April, Judge Scott Becker appointed Houston criminal defense attorneys Brian Wice and Kent Schaffer as special prosecutors to assist in the “investigation and, if warranted, the prosecution of Ken Paxton for the securities law complaints currently under investigation by the Texas Rangers.”

In an amended order issued May 20, however, it was expanded to “any and all offenses arising out of Ken Paxton’s alleged violations of the Texas Securities Act.”

“I requested the scope of our investigation be expanded because of things that were uncovered in the course of the investigation,” Schaffer told the Chronicle Thursday. “We wanted to make sure the scope of our investigation was not limited by the original order. We were simply going where the evidence took us.”

Very interesting, wouldn’t you say? The Trib suggests that the expansion of scope could also mean an extension on the statute of limitations. You can expect that to come up in a motion to dismiss some day, if we get that far. Be that as it may, I can’t wait to see what happens next. And just think, if Paxton does get indicted, no one will be able to blame it on those dirty hippies in Travis County. Link via the Dallas Morning Views blog.

Meet your Paxton prosecutors

Technically, they’re district attorneys pro tem, for those of you keeping score at home.

Ken Paxton

Two Houston attorneys have been appointed to replace Collin County District Attorney Greg Willis in any potential prosecution of his friend and business partner Attorney General Ken Paxton. The Texas Rangers are looking into whether Paxton should be criminally prosecuted for violating state securities law.

Kent Schaffer and Brian Wice will serve as criminal district attorneys pro tem, according to an order signed Tuesday by Scott Becker, a judge in Collin County district court. The order leaves open the possibility of “further additional appointments.”

[…]

While neither Schaffer nor Wice have worked as prosecutors, both have extensive criminal defense backgrounds. Wice recently worked on the defense team of NFL Star Adrian Peterson with attorney Rusty Hardin and is the legal analyst for KPRC-TV in Houston. He is most known as the appellate attorney for former House Majority Leader Tom DeLay.

Shaffer has represented high-profile politicians and business leaders including R. Allen Stanford, former Congressman Craig Washington and handled legal affairs for athletes and celebrities including Farrah Fawcett.

See here for the background. It’s interesting to name two lawyers who have never worked as prosecutors for this, but they are certainly well qualified to handle the procedure. One might surmise that if they wind up going forward with charges against Paxton, their case will be pretty darned solid. I look forward to seeing what happens next.