Paxton's securities fraud trial set for 2024. How his impeachment trial could tip outcome

Through a stream of investigations, lawsuits and criminal charges, Ken Paxton, since becoming Texas’ attorney general eight years ago, largely avoided the unflattering position he found himself in Thursday morning: a defendant in a courtroom.

Paxton, who has been suspended from office pending a Senate impeachment trial next month, stepped into a 17th-floor Houston courtroom to address the oldest legal matter among those that have clouded his three terms as the state’s lead attorney.

Demanding action after years of delays, Harris County state Judge Andrea Beall established a timeline to finally resolve a securities fraud case for which Paxton was indicted in 2015, the year he took office.

Beall, a Democrat in her first year on the bench, told lawyers to be prepared for trial in February 2024. But Paxton’s lawyer said a trial might not happen, suggesting for the first time that if Paxton is removed from office through impeachment that he then might resolve the securities charges through a plea agreement.

“If Ken prevails (in the impeachment), we’ll go forward. If Ken loses, that’s a kill shot to his political career, so it opens the door to a resolution,” his lawyer, Dan Cogdell, told reporters outside the courtroom.

Paxton kept a low profile at the morning hearing, quietly arriving at the courthouse through a nonpublic entrance and taking a seat in the courtroom in an area typically held for the public. Although Beall required his attendance, Paxton had no meaningful role in the hearing. The proceeding ended after 20 minutes, and Paxton left without speaking with reporters.

Paxton, if removed from office through impeachment, risks his livelihood in the securities case if he goes to trial. A conviction on a felony would trigger the revocation of his license to practice law in Texas. Paxton, 60, has been licensed since 1991. Yet, if he prevails in the impeachment trial and returns to office, Paxton would not need a law license to continue as attorney general. As such, Cogdell said he then would be inclined to take the securities case to trial.

The three felony counts Paxton is facing are for failing to register as a securities adviser, and for defrauding investors in a Dallas-area tech startup by not disclosing that he was being paid by the company, Servergy, to recruit them.

Yet the image of Paxton as a defendant in a courtroom likely carries little political importance among diehard Texas Republicans who have steadfastly stuck by him through his scandals. Last year, while facing many of the same ethical and criminal allegations that dog him today, Paxton swatted away a GOP primary challenge from several household names, including Land Commissioner George P. Bush, whom Paxton easily defeated in a runoff.

More: Woman with whom Texas AG Ken Paxton allegedly had an affair identified by AG's lawyers

In late June, Defend Texas Liberty, a political action committee backed by West Texas oil tycoons Tim Dunn and Farris Wilks, offered their unwavering support to Paxton through a controversial political contribution. The billionaires donated $3 million to Lt. Gov. Dan Patrick, a Republican who will preside over Paxton’s impeachment trial in a role similar to that of a judge.

"Honestly, with this going on with him, not only in this case but his upcoming impeachment trial, to just the negative media attention on him the last few years, it just has not resonated with those party loyalists," said Renee Cross, the University of Houston Hobby School of Public Affairs' senior executive director. "I don't see this hearing making a difference."

More important to those voters, Cross said, are political ideologies that Paxton has acted on, including key issues such as abortion rights, that continue to endear him to Republican voters.

"We have heard of various political leaders being referred to as Teflon whether it was Bill Clinton or Donald Trump," she said. "I would say that Ken Paxton is probably King Teflon."

The securities case is but a slice of the criminal or ethical matters Paxton is facing. Others include the impeachment, for which Paxton is accused of accepting bribes to intervene in legal matters involving campaign donor and Austin real estate developer Nate Paul. The attorney general’s office is also a defendant in a wrongful termination lawsuit from former aides who say Paxton fired them in violation of whistleblower protections after they reported his alleged criminal conduct to federal authorities. A federal investigation into those matters, launched in 2020, will soon hit the three-year mark.

Cogdell on Thursday confirmed that the federal probe is active, even after prosecutors in Washington this year took it over from local prosecutors in San Antonio.

"I believe that case will go nowhere, because I'm familiar with the facts," Cogdell told reporters.

Paxton’s court appearance came on the same day another top Republican, former President Donald Trump, prepared to travel to Washington to plead not guilty to federal charges that he tried to steal the 2020 election. Paxton, a Trump ally whom the former president endorsed for reelection last year, involved himself in Trump’s effort through a lawsuit he filed that challenged the presidential election results in four battleground states.

Paxton’s lawsuit triggered a lawsuit against him from the Texas State Bar, which wants to discipline Paxton for making what it says are dishonest claims about uncovering voter fraud. That case is on hold in a Dallas-based appeals court until after Paxton’s impeachment trial.

That Senate trial is set for Sept. 5, and the political implications for Paxton could not be higher.

After considering testimony over two to three weeks, Texas senators will decide whether to remove and ban Paxton from office based on evidence that House impeachment managers say will show that the attorney general misused his legal authority to help Paul.

The allegations include that in 2020 Paxton issued a legal opinion to delay a foreclosure sale on Paul’s properties, and that he intervened in a lawsuit to give Paul the upper hand over a nonprofit. Over the objections of lawyers in the attorney general's office, Paxton also stands accused of impermissibly hiring a special prosecutor to investigate federal authorities after the FBI raided Paul’s home and business in 2019.

In exchange, House managers say, Paul funded a Paxton home remodel and gave a job to a woman with whom Paxton was having an extramarital relationship.

Paxton has offered a general denial of the claims. A motion from his lawyers seeks to prevent him from testifying at trial.

Support from 21 of the 30 voting senators is required to convict Paxton on any of the 16 impeachment articles he faces. Paxton’s wife, Sen. Angela Paxton, R-McKinney, will not get to vote. Four articles related to the securities case will not be presented at the trial and will be revisited at a later date.

The trial is viewed by some Republicans as a test in political loyalty to Ken Paxton, a former Texas representative and senator with friendly ties to several current senators, and to Patrick, who will be under a microscope as he makes rulings that could influence the impeachment trial outcome.

Brian Wice, a prosecutor in the securities case, said he believes the impeachment trial will be fair. He noted that in late May, when the House overwhelmingly recommended impeachment on a 121-23 vote, that five state representatives in Paxton’s home county voted in favor of impeachment.

“I’m confident, as is everyone in this great state, that the Senate will do the right thing for the right reason at the right time,” Wice said.

Meanwhile, as the impeachment trial plays out, the securities case will again sit idle.

The securities case has had many delays since 2015, including Hurricane Harvey and the coronavirus pandemic as well as a dispute over a $300-an-hour fee schedule for the special prosecutors. Another delay involved a fight over where the case would be tried: Collin County, a Republican stronghold that Paxton calls home, or in Houston.

Last month, the Court of Criminal Appeals ruled against Paxton and set the case in Houston.

Beall, a former child homicide prosecutor, scheduled a hearing for Oct. 6 to resolve the lawyer pay dispute through an ex-parte request, without input from Paxton’s lawyers. On that same day, she’ll consider a motion from Paxton to dismiss the case on the grounds that he did not receive a speedy trial.

In Houston, which leans slightly Democratic, prospective jurors are more likely to be wary of Paxton. The University of Houston recently polled Houston residents who responded that they view Paxton most unfavorably among multiple state and federal elected officials, with 60% of respondents saying their view of him is "very unfavorable."

But Jon Taylor, chair of the political science department at the University of Texas at San Antonio, said a potential trial would do little to decrease enthusiasm for Paxton among his base.

"He has some serious true believers behind him, not just in Texas but nationally, who believe he is a paragon of conservative values," he said. "They are not going to give up on him or go quietly."

This article originally appeared on Austin American-Statesman: Texas AG Ken Paxton's securities fraud trial set for 2024