Meet Fritz Mowery, the man who helped get AG Ken Paxton into trouble.
Ken Paxton
Fritz Mowery was on a mission.
Last April, he tried to convince investment clients to sign backdated forms saying they knew Ken Paxton had received money for referring clients.
In a hearing in March, Mowery said he did it, “because it became an issue with Ken Paxton.”
Paxton, who was sworn in as Texas Attorney General earlier this year, acknowledged in May 2014 that he solicited clients for Mowery without being registered with the state securities board to do that. He described it as an administrative error and paid a fine.
“Mr. Paxton’s deal just seems to be, ‘If I say I’m sorry, everything ought to be OK and it ought to be forgotten,'” said John Sloan, who represented a couple that sued Paxton and Mowery after losing hundreds of thousands of dollars in failed real estate deals. “The problem is the law [passed when] he was in the legislature [that] makes the conduct that he was engaging in a felony.”
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A five-day administrative hearing this past March revealed details about the dealings between the two men. Regulators are seeking to revoke Mowery’s securities license and they allege that he engaged in pattern of misconduct that included misrepresentations, acting in his own self-interest over his clients’, and failing to disclose crucial information to clients.
Testimony showed the two men had been working together as far back 2004, the same year that Mowery founded Mowery Capital Associates.
Paxton was paid 30 percent of management fees for referrals that he made to Mowery.
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But the testimony shows the lengths to which Mowery was going to get clients to sign the backdated disclosures last spring.
In one case, a disclosure was dated as having been signed in 2005. In reality, it wasn’t signed until 2014.
Read the whole thing, it’s quite illuminating. Mowery’s defenders and Paxton’s campaign flack insist that this is all just a big misunderstanding, an innocent mistake that anyone can make, and so on. I think there’s only so many times you can ask people who had no idea that Ken Paxton was getting a kickback when he steered them to Fritz Mowery to sign a backdated form saying that they had been informed up front about the Paxton/Mowery relationship before one is forced to conclude that the behavior was habitual and not accidental. That will presumably be one of the things that the grand jury convening in August will consider, along with whatever evidence of other alleged wrongdoing that the special prosecutors say they have found. As I’ve said, I can’t wait to see how that goes.
In the meantime, you may be wondering about Paxton’s legal bills.
Attorney General Ken Paxton, dogged by a cloud of legal uncertainty since taking office in January, is not using taxpayer dollars to pay his lawyers, according to aides, who left it less clear whether he plans to tap his campaign account.
The question of how he has been footing his legal bills flared up Thursday with the disclosure of campaign finances that showed he spent almost $20,000 on legal services during the first half of the year. A Paxton spokesman indicated the expenses did not have to do with the ongoing fallout from his self-admitted violation of state securities law last year.
A special prosecutor overseeing the latest chapter in the saga has said he plans to ask a Collin County grand jury to indict Paxton on a charge of first-degree felony securities fraud. The grand jury is expected to meet in the next few weeks, and Paxton has hired high-powered Dallas attorney Joe Kendall to represent him.
Before Paxton brought Kendall on board, the attorney general was being represented by Matt Orwig and Bob Webster, two Dallas lawyers whose firms did not show up on Paxton’s most recent campaign finance report. Asked Thursday evening about the legal services listed on the disclosure, Paxton spokesman Anthony Holm said in a statement, “My belief is that none of those are related to the events in Collin County.”
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State law prohibits elected officials from using campaign contributions for personal purposes. One exception, however, is when an elected official is defending a civil or criminal action brought against them in his or her “status as a candidate or officeholder.” Holm has long suggested Paxton is only facing the legal drama because he is a top-ranking elected official, while prosecutors have argued Paxton’s political stature has nothing to do with their work.
The Texas Ethics Commission issued an advisory opinion in 1995 that shed some light on how it interprets the so-called “personal use” exception. A district judge had asked the commission whether he could use campaign contributions to pay for his defense against a lawsuit stemming from his time as an attorney before he joined the court. The commission concluded that judge was in the clear as long as he had determined “in good faith that a groundless lawsuit has been filed against him solely because of his status as a judge.”
Defending oneself against felony charges can be quite expensive, as Rick Perry can attest. It will be very interesting to see if Paxton is allowed to tap into his campaign account for this, or it he’ll have to fundraise separately.