Texas AG Closes Controversial Investigation Amid Bribery Accusations

In this June 22, 2017 file photo, Texas Attorney General Ken Paxton speaks at a news conference in Dallas. (AP Photo/Tony Gutierrez)

AUSTIN, Texas (CN) — Embattled Texas Attorney General Ken Paxton abruptly closed an investigation Friday into the FBI and Texas Rangers on behalf of a campaign donor that resulted in Paxton’s senior staff publicly accusing him of corruption last week.

Paxton — a Republican — announced the closure hours after Travis County District Attorney Margaret Moore called him out, stating in a one-page letter that “newly surfaced information raises serious concerns about the integrity of your investigation and the propriety of your conducting it.”

Moore had confirmed Thursday that Paxton personally approached her office with campaign donor and Austin real estate investor Nate Paul and Paul’s attorney to complain about the FBI and Rangers investigating Paul. Moore’s office then referred the complaint back to Paxton’s office on June 10.

“[W]e concluded that ours was not the appropriate office to either address the matters raised in the complaint or to conduct an investigation into them,” Moore wrote Friday. “My office has closed this file and will take no further action. Furthermore, I have instructed my employees to have no further contact with you or your office regarding this matter.”

Federal Election Commission records indicate Paul has been a frequent donor to Republican candidates since 2018, including U.S. Representatives Chip Roy and Michael McCaul, U.S. Senator John Cornyn and the WinRed political action committee.

Seven of Paxton’s senior staff asked federal officials on Oct. 1 to investigate him for possible bribery and abuse of office charges after Paxton appointed Houston attorney Brandon Cammack as special prosecutor to handle the Paul investigation. Paxton’s staffers mutinied after Cammack had a Travis County grand jury issue subpoenas targeting Paul’s creditors last month.

Deputy Attorney General J. Mark Penley — one of the seven senior staffers — filed a motion to quash the subpoenas on Oct. 2, which was granted within hours.

“He is not properly authorized to act as a special prosecutor, and … has no authority to appear before the grand jury or issue grand jury subpoenas,” Penley’s motion to quash stated.

Paxton has steadfastly denied any wrongdoing and refused to resign, claiming he hired Cammack because his staff “impeded the investigation.” Paxton said Wednesday that the decision to ultimately prosecute rests with Moore’s office and that his office has investigation authority only.

“Despite the effort by rogue employees and their false allegations I will continue to seek justice in Texas and will not be resigning,” Paxton said on Oct. 5.

Texas Republican leaders have remained largely quiet about the allegations against Paxton, with Governor Greg Abbott and Lieutenant Governor Dan Patrick refusing to comment until an investigation is complete. 

Congressman Roy said on Oct. 5 that Paxton must resign “for the good of the people of Texas and the extraordinary public servants” in the attorney general’s office. Roy served as Paxton’s initial first assistant until he was asked to resign in 2015. He was later elected to Congress in 2018.

Doubts over Paxton’s ethics have dogged him for over five years. A Collin County grand jury charged Paxton in August 2015 with two first-degree felony counts of securities fraud and a third-degree felony count of failing to register with the Texas State Securities Board from his time in the Texas House.

Prosecutors claim Paxton urged investors to invest $600,000 in technology firm Servergy without disclosing he would earn a commission and misrepresented he was investing in the McKinney-based company.

Paxton faces up to 99 years in state prison if convicted. The criminal case has been stuck in pretrial for over five years as the case has been moved to Harris County and back while Paxton has launched several attempts at having the judge removed.

In the meantime, the case did not prevent Paxton from serving his entire first term as attorney general. He narrowly won reelection in 2018 with 50.6% of the vote over Democrat Justin Nelson.

Paxton has repeatedly denied the criminal charges against him, blaming his political opponents for retaliating against him for opposing policies by then-President Barack Obama.

The U.S. Securities and Exchange Commission filed a similar civil lawsuit against Paxton in April 2016 in federal court in Dallas over the Servergy matter. A federal judge dismissed that lawsuit six months later, finding Paxton “did not have a legal obligation to disclose his financial arrangements” to the firm’s investors.

One year later, a Dallas-area district attorney launched an ethics probe into Paxton accepting a $100,000 gift for his legal defense fund from James Webb, leader of a company that was being investigated for Medicaid fraud.

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