Ken Paxton will be Texas’s first sitting attorney general in more than 30 years to face criminal indictment, multiple news outlets reported Saturday.
The three-count indictment – two counts of securities fraud, a first-degree felony, and a third-degree felony count of failure to register as a securities agent – was returned by a Collin County grand jury earlier this week, but news of the sealed indictment broke Saturday.
Kent A. Schaffer, one of two Houston attorneys appointed by a Republican north Texas judge to serve as special prosecutors in the case, ultimately confirmed the indictment to the New York Times Saturday. The most serious of the three charges, securities fraud, stem from a Texas Rangers investigation into Paxton’s ties with Servergy Inc., a tech company based in the former state representative's hometown of McKinney; Paxton reportedly owns some 10,000 shares in the company.
Earlier this summer, news surfaced that Paxton’s name had been mentioned in a U.S. Securities and Exchange Commission probe of the company, which has been accused of lying to investors. Shaffer told the Times Saturday that Paxton is accused of encouraging investors in 2011 to dump more than $600,000 into the company, all while failing to tell them that he was making a commission on their investment.
“The grand jury elected to indict, and the indictments all speak for themselves,” Schaffer told the Times. The securities fraud charges carry the potential of five years to life in prison.
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Even before voters overwhelmingly voted Paxton into office last November, he’d admitted to violating state securities laws, but he skated by with a simple $1,000 fine; of course, we later learned that the Rick Perry-appointed members of the State Securities Board failed to refer Paxton’s case for prosecution.
Following that slap on the wrist, the left-leaning government watchdog group Texans for Public Justice filed a complaint against Paxton in Travis County, where prosecutors said their hands were tied because any potential criminal activity took place closer to Paxton’s hometown, not in Austin. Travis County prosecutors forwarded their investigation to the Collin County district attorney, a close friend of Paxton’s who eventually recused himself from the case. Houston attorneys Shaffer and Brian Wice were appointed as special prosecutors.
In the meantime, with potential criminal charges looming, Paxton in his first several months as the state’s top lawyer made a name for himself as a conservative crusader on the front lines of the culture wars. Two days after the U.S. Supreme Court handed down a ruling legalizing same-sex marriage across the country, Paxton issued an AG opinion giving county clerks religiously opposed to same-sex couples laughable legal advice: clerks are totally within their rights to deny same-sex couples marriage licenses, he wrote, and if they face litigation (which, of course, they have) Paxton assured the faithful flock that there was an army of pro-bono attorneys waiting to help defend the right to discriminate against gay couples.
That the state’s top lawyer, for the first time in more than three decades, now faces serious criminal charges has got to be some kind of low point in modern Texas politics (on the heels of a sitting governor’s criminal indictment, no less). That this all happened within Paxton's first seven months on the job is, well, stunning.