What ties Nate Paul to Texas AG Ken Paxton? A timeline from campaign donation to impeachment

The Texas House impeached Attorney General Ken Paxton on May 27, though he had been facing allegations of abuse of office since 2020 when former aides complained to the FBI that Paxton had been improperly helping a campaign donor. That donor, Austin real estate developer Nate Paul, in an unrelated case has been indicted on eight federal financial crimes stemming from 2017 and 2018.

But even before allegations arose against Paxton, he had been indicted in 2015 on three felony counts related to securities fraud. The case stemmed from Paxton recommending buying shares in Servergy Inc. without disclosing that the Texas company was paying him to promote its stock. According to court documents, he raised $840,000 for the private company in less than a month, and in exchange, received 100,000 shares worth $1 each in the business.

Paxton has never gone to trial on his securities case after years of appeals by his attorneys regarding location, judges and other rulings.

Voters elected Paxton as attorney general in November 2014, and reelected him in 2018 and 2022.

The American-Statesman has covered the allegations against Paxton outlined in his articles of impeachment years before the House made its decision and is closely following the federal charges Paul is facing. Here's a look at that coverage and how it all ties together:

Mitte Foundation sues Nate Paul; Austin real estate mogul makes $25,000 campaign donation to Ken Paxton

Paxton won reelection to a second term in 2018. His campaign received $25,000 from Paul, the president and CEO of Austin-based real estate investment firm World Class Capital Group.

Paul's company has owned multiple Austin shopping centers, 3M's Northwest Austin campus and former Carmelo’s Italian Restaurant downtown as well as owning over 100 properties in other cities across the country. Founded in 2007, World Class Capital Group was valued by Forbes at $1.2 billion in 2016.

The same year, the Mitte Foundation, a Central Texas nonprofit that supports educational and community organizations and is a limited partner in entities Paul controlled, filed a suit against him and his company seeking access to books and records over allegations it was kept in the dark regarding financial information.

Nate Paul's World Class Capital Group raided by FBI in 2019

On Aug. 14, 2019, the FBI raided World Class Capital Group's downtown Austin offices.

The same year, lenders moved to foreclose on a combined $258 million in what they have contended were overdue loans made to more than two dozen Texas-based real estate entities controlled by Paul and his company.

While no charges were filed, the raid spurred action from Paul and Paxton the following year.

Nate Paul files complaint after raid, Ken Paxton hires outside lawyer billed to Texas taxpayers in 2020

After filing Chapter 11 bankruptcy filings on several properties his company owned, including the 3M campus in Austin, Paul filed a complaint alleging investigators used false statements on affidavits and employees were "detained and intimidated" by agents in their 2019 search.

The Texas attorney general's office got involved after Paxton sought a meeting with then-Travis County District Attorney Margaret Moore in May 2020. Aides to Paxton would later disclose that a month earlier, Paul “sought guidance on the protocol for reporting a complaint” about the FBI's search and was told by Paxton to file it with the Travis County district attorney’s office. That office then forwarded the case to Paxton.

Paxton then hired Houston defense lawyer Brandon Cammack to examine Paul's allegations after attorneys within his department found them to be without merit. Cammack billed the state for $14,000 for his first month of investigations.

Ken Paxton aides accuse Texas AG of bribery, abuse of office

On Oct. 3, 2020, the Statesman reported that several senior Paxton aides filed a criminal complaint against the attorney general that they say stem from his dealings with Paul. They asked federal agents to investigate their boss for potential crimes that include bribery, abuse of office and improper influence.

Paxton then fired the aides who did not resign, labeling them "rogue employees" and claiming their accusations were false. Four of them later filed a whistleblower lawsuit for wrongful termination.

The whistleblowers allegations included:

• Paxton improperly intervened in a dispute over open records to help Paul gain access to investigative documents related to the searches of Paul's home and businesses, the lawsuit claims. Paxton had never before gotten personally involved in his agency's decisions involving the state's open records laws, the filing says, adding that Paxton's actions "threatened to interfere with and obstruct the FBI."

• Paxton, overriding a decision by his agency's Charitable Trust Division, directed the attorney general's office to intervene in a Mitte Foundation lawsuit against Paul. "It was odd," the whistleblowers wrote, "considering that (Paxton) had never done so before or even shown any interest in a charity case."

• Paxton pressed to have a written opinion published at 2 a.m. on a Sunday stating that COVID-19 safety rules required foreclosure sales to be suspended. That rushed opinion, contrary to Paxton's opposition to every other government restriction on pandemic gatherings, allowed Paul to delay a foreclosure sale for at least one of his properties two days later, the lawsuit alleges.

• The whistleblowers also accused Paxton of "personally orchestrating" an attorney general's office investigation into Paul's claims of an improper search. When two agency executives found Paul's claims to be without merit, "Paxton took over" and ensured that an outside counsel would be hired to resume the investigation, the lawsuit says. Paxton went outside normal procedures to hire as outside counsel "someone he could direct and control: Brandon Cammack, a five-year lawyer with no law-enforcement or investigative experience," the filing says.

Ken Paxton settles whistleblower case, House Speaker Dade Phelan refuses to use public funds in 2023

Paxton settled the suit to the tune of $3.3 million in February. House Speaker Dade Phelan voiced opposition to the use of public funds to cover that cost.

“Mr. Paxton is going to have to come to the Texas House,” Phelan said at the time. “He's going to have to appear before the appropriations committee and make a case to that committee as to why that is a proper use of taxpayer dollars, and then he's going to have to sell it to 76 members of the Texas House. That is his job, not mine.”

Fast forward to May, Paxton called for Phelan's removal as House speaker after video showed him slurring his speech while presiding over the House.

Just days later, a House committee would unanimously recommend that Paxton be impeached, mentioning the attorney general's ties to Paul in their charges against him.

Nate Paul found guilty of contempt of court in Mitte Foundation case

Also this year, Paul was found guilty on eight counts of contempt of court and three counts of perjury for lying in court about certain transfers of money that were greater than a spending limit a judge had set in a fraud case involving the Mitte Foundation.

Paul was sentenced to 10 days in jail in March by state District Judge Jan Soifer, but his case has been appealed to the state Supreme Court, keeping Paul free for the time being.

Ken Paxton's impeachment and ties to Nate Paul

Ken Paxton is facing 20 articles of impeachment from a House committee that recommended his impeachment in May. Among those charges were allegations that Paxton misused his office to help Paul.

The articles allege Paul paid to renovate Paxton's Austin home and hired a woman with whom Paxton was having an extramarital affair. Paxton, a three-term Republican, is married to state Sen. Angela Paxton.

Paxton was also accused of assisting Paul in a legal dispute against a local nonprofit and of trying to stall a foreclosure sale on Paul-owned properties.

Paxton was impeached by the House by a 121-23 vote with overwhelming Republican support. He now faces a trial in the Senate that is expected to take place later this summer.

Nate Paul arrested for financial crimes not tied to Ken Paxton

Less than two weeks after Paxton's impeachment, Paul was arrested on Thursday and is facing eight charges tied to financial crimes that are unrelated to a separate federal investigation into Paxton. That investigation appears to be active and ongoing.

What we know: Austin developer, Ken Paxton associate Nate Paul charged with eight federal financial crimes

Federal investigators said Paul made false statements to an array of financial institutions about his total liabilities and money in the bank, influencing mortgage lenders' decisions. The investigators intend to seek forfeitures totaling $172 million based on the alleged false statements.

This article originally appeared on Austin American-Statesman: Ken Paxton and Nate Paul: From a campaign donation to impeachment