HOUSTON (CN) — A Texas judge on Friday rejected state Attorney General Ken Paxton’s motion to dismiss his securities fraud indictments, setting the stage for his long-anticipated trial.
Serving his third term as the Lone Star State’s chief law enforcement officer, Paxton, 61, moved on Feb. 6 to dismiss his indictments on two first-degree felony charges of securities fraud and a third-degree felony charge of failing to register with state securities regulators.
If convicted, Paxton faces up to 99 years in prison.
Paxton is accused of fraudulently selling stock of the software company Servergy Inc. to two investors in July 2011 without disclosing that he would be paid commissions.
Paxton also did not disclose that he himself had not invested in the now-defunct firm — though he touted it as a great company.
A Republican and staunch supporter of former President Donald Trump, Paxton claimed the eight-year delay since he was indicted by a Collin County grand jury in August 2015 — shortly after he first took office as AG — had violated his Sixth Amendment right to a speedy trial.
Wearing a dark blue suit with stripes of the tiny words “not guilty” stitched in white thread, Paxton attorney Dan Cogdell blamed special prosecutors Brian Wice and Kent Schaffer for delaying the case by disputing the pay rate they are receiving for their legal work.
“That is what this food fight has been all about," Cogdell told Harris County 185th District Court Judge Andrea Beall, a Democrat. "Never in my 42 years of practicing law have I seen a case paused by a fee dispute."
Based on a pay rate of $300 per hour, the Collin County Commissioners Court — the elected executive board of the North Texas county where Paxton was indicted — approved paying a first bill of $242,000 submitted by the special prosecutors for pretrial work in January 2016. At the time, that legal team included Wice, Schaffer and Nicole DeBorde Hochglaube, a third special prosecutor who has since withdrawn from the case.
The commissioners court balked at paying their second bill of $199,000 in January 2017. Since then, the issue has been tied up in appeals courts.
At Friday’s hearing, Cogdell implied Wice and Schaffer were being greedy.
“Now they want hundreds of thousands more,” Cogdell said. “Nowhere in history has a special prosecutor been paid that much. Wice drives a Mercedes with vanity plates.”
Beall admonished him to “stick to the facts." Cogdell then concluded his remarks, saying he has for years known Wice, a well-known Houston criminal defense attorney, and considers him a friend.
“There is no statutory right to interim fees,” Cogdell said. “And this should not be tolerated based on a food fight for fees to delay a case for five years.”
Wice countered that it was Paxton himself who started the fees dispute when he filed a motion challenging them in December 2015.
In Friday’s hearing, Wice also called Collin County’s dispute over the special prosecutors’ fees a “Machiavellian ploy to derail this trial.”
Collin County, whose seat McKinney is 30 miles north of Dallas, is Paxton’s home turf. He owns a home there, and a portion of the county was part of his district when he served in the Texas House of Representatives (2003 to 2013) and Texas Senate (2013 to 2015) before he was elected state attorney general.
Wice also blamed the delays on a venue dispute and on two Harris County District Court judges who were assigned to the case before Beall.
Paxton wanted the trial to be held in Collin County and haggled for years in court proceedings to get it moved there.
Ultimately, Wice and the other special prosecutors convinced appellate courts that it should be in Harris County, as they all live and work in the county seat of Houston.
At the end of Friday’s hour-long hearing, Beall denied Paxton’s motion. She noted that the case had been delayed by Paxton’s impeachment trial in the Texas Senate last September.
Schaffer, one of the special prosecutors, then announced that he is stepping down from the case and being replaced by Jed Silverman, a veteran Harris County criminal defense attorney.
Beall gave Silverman a warning: "You understand I can't guarantee you payment."
Cogdell argued that Wice, the lead special prosecutor, had no authority to appoint Silverman to the case — an issue Beall agreed to take up at a final pretrial hearing on March 20.
Wice told reporters after the hearing that Schaffer decided to leave the prosecution team because he had wanted to offer Paxton pretrial diversion, which would have allowed the attorney general to avoid pleading guilty and to have the charges dropped if he complied with the terms of the diversion and stayed out of trouble.
Wice said he’s eager for the trial, which is set to start April 15, because he wants to show that “no is above the law” — not even Paxton, the state’s chief prosecutor.
Addressing the media following the hearing, Cogdell expressed confidence that Paxton will be acquitted.
“He’s never considered pleading guilty,” Cogdell said. “He’s ready for trial."
"This thing has been pending for eight years," Cogdell added. "They want to dance. Put on your shoes, and let’s dance.”
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