Texas AG Paxton Still On Course For Trial On Securities Fraud Case

Texas Attorney General Ken Paxton is still set to see his day in trial court over the nearly nine-year-long securities fraud case against him after Harris County District Judge Andrea Beall denied a motion to dismiss the charges against Paxton.

Beall took up a motion filed last week by Paxton’s legal team that argued the case should be thrown out due to delays obstructing the attorney general’s constitutional right to a speedy trial during a Friday pretrial conference.

Paxton was present in the Houston courtroom. Other than acknowledging that one of his defense attorneys was correct when answering one of Beall’s questions by nodding his head, he sat without speaking throughout the hearing.

Houston Criminal Defense Attorney Jed Silverman will take over for special prosecutor Kent Schaffer, who told Beall he was stepping away from the case. Special prosecutor Brian Wice appointed Silverman.

When speaking with reporters after the hearing, Wice said the disagreement over the ultimate resolution to this case was likely the basis of Schafffer’s request to withdraw from representation.

According to Wice, Schaffer believed the pretrial intervention or an informal agreement between the accused and the state not involving a guilty plea or formal acceptance of responsibility, including possible jail time, was appropriate. Wice did not.

“I don’t believe, given the facts and circumstances of this case and this defendant, that pretrial intervention was a fair justice or appropriate disposition,” Wice said.

“All they (defense attorneys) had to do was contest the operative facts and the indictment, and without an acknowledgment of guilt, to me, that was worse than a slap on the wrist,” he added.

Defense Attorney Dan Cogdell confirmed there were discussions regarding a pretrial intervention. He said if offered, he would not have rejected it as it would’ve resolved the case with dismissal and saved the attorney general the time and expenses of going to trial.

He denied any ongoing plea negotiations for the attorney general, “He (Paxton) has never entertained the idea of pleading guilty to anything, never will entertain the idea of pleading guilty because he is not guilty,” Cogdell said to reporters.

Beall set another pretrial hearing for Wednesday, March 20. Despite Silverman’s appointment, she made it clear that the court had every intention to proceed to trial on Monday, April 15 — as previously decided on by both sides.

Paxton’s defense attorneys objected to Silverman’s appointment during Friday’s hearing. Cogdell said that they may have decisions to make regarding whether or not Silverman is the right guy or if he was appointed correctly.

The case has dragged on for several reasons, including Paxton’s impeachment proceedings, the debate regarding its location and, more recently, disagreements over prosecutorial pay — a topic at the center of Friday’s proceedings.

Cogdell referred to the dispute over the special prosecutors’ pay as a “food fight for fees” and faulted the prosecutors for causing the delays related to their fee schedule. Wice countered Cogdell’s statements, saying the disagreement started when Paxton challenged the prosecutors’ pay in 2015.

Wice added Paxton appeared to be “living his best life” in response to the defense attorneys’ statements that the case’s pending legal status had caused the attorney general to face anxiety, worry and financial and employment difficulties.

Last month, the Texas Court of Criminal Appeals declined to intervene in the ongoing dispute about Wice and Schaffer’s pay. This came after Beall ruled at a November hearing last year that the prosecutors should be compensated the $300 hourly rate they initially requested in 2015.

In a written order, Beall stated she would not issue new payment orders in accordance with the Collin County fee schedule because the $2,000 cap it sets for all pretrial work done in noncapital cases would be “wholly unreasonable” given the amount of investigation, evidentiary review and complexity of the case.

Wice and Schaffer then requested that the state’s highest criminal court intervene to force Collin County officials to approve the back pay for the prosecutors — who have been working on the case without compensation since 2016.

The matter is now in the hands of the First Court of Appeals, as the defense attorneys requested that the Houston-based court overturn Beall’s prior ruling while the case was pending in the appellate court in January.

The attorney general has pleaded not guilty to two first-degree felony securities fraud charges and one third-degree felony charge he faces. The attorney general was indicted for allegedly soliciting investors in a McKinney-based technology company, Servergy Inc., without disclosing that the company was paying him to promote its stock and for failing to register with state securities regulators.

Paxton could face fines and time in prison if convicted. During an October hearing last year, Beall determined that the attorney general’s trial would start roughly two months from now. However, with matters that could be discussed during the upcoming March hearing, this could be subject to change.

There are still additional legal challenges ahead for Paxton. In Travis County, a lawsuit brought forth by several of the attorney general’s former top deputies alleges that Paxton used his office to assist real estate developer and top donor Nate Paul.

Although he was acquitted during his Senate impeachment trial, largely centered around these claims, the whistleblower’s lawsuit is still in court proceedings. Paxton also faces a challenge on the federal level for alleged falsified statements to the U.S. Supreme Court about Texas having evidence of widespread election fraud during the 2020 presidential election.