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Texas Attorney General Booked and Released

McKINNEY, Texas (CN) - Texas Attorney General Ken Paxton was booked at a Dallas-area jail Monday as an indictment was unsealed accusing him of felony securities charges that could send him to prison for life.

Paxton, 53, of McKinney, turned himself in Monday at the Collin County jail .

He is accused of fraudulently selling more than $100,000 in Servergy stock to two investors in July 2011 without disclosing that he would be paid commissions on it. He also failed to disclose that he had already been given 100,000 shares in the company and that he had not invested in the company himself, according to the indictment. Paxton was a member of the State House at the time. He later became a state senator, and was elected attorney general last year.

He faces two first-degree felony counts of securities fraud and a third-degree felony count of failing to register with the state securities board. A first-degree felony carries a sentence of 5 to 99 years or life in state prison; a third-degree felony is punishable by two to 10 years in state prison.

Paxton was allowed to pose for a mug shot without a white towel around his neck and shoulders, which is required for booking shots in Collin County. Officials told the Dallas Morning News that Tarrant County Judge George Gallagher ordered Sheriff Terry Box not to use a towel in Paxton's photo. Paxton was released on $35,000 bail.

Paxton's attorney said the attorney general could not comment because of a gag order. Attorney Joe Kendall, of Dallas, later issued a statement saying Paxton would plead not guilty and would demand a jury trial.

"He is looking forward to the opportunity to tell his side of the story in the courtroom of Tarrant County Judge George Gallagher, who was appointed to the case after Judge Chris Oldner's recusal on July 29," Kendall said. "Judge Gallagher has given instructions to make no further public comments or publicly speculate on events. Attorney General Paxton and I intend to comply with Judge Gallagher's instructions. In the meantime, the Attorney General is returning to Austin to focus on his work on behalf of the citizens of Texas."

Protesters waited for Paxton's arrival, demanding his resignation. Several dozen people demonstrated on the front steps, holding signs saying, "Axe Paxton," "Crook," "Did the Crime, Do the Time" and "Proven Conservative Hypocrite."

Paxton's troubles began when the Texas State Securities Board fined him $1,000 last year after he admitted he had solicited clients for a friend's investment firm, Mowery Capital Management, while he was a state senator, without being registered as an investment adviser. Paxton paid the fine and was reprimanded.

The new charges came from a Texas Rangers investigation that began after the slap on the hand from the Securities Board.

"The Rangers went out to investigate one thing, and they came back with information on something else," Schaffer said in early July. "It's turned into something different than when they started."

The new allegations sparked a public war of words between the prosecutors and Paxton, who called Schaffer and special prosecutor Brian Wice "inexperienced" and "politically motivated." He also complained that they are from Houston, though there are plenty of attorneys closer to Austin, the state capital.

"This appears to be a politically motivated effort to ruin the career of a longtime public servant," Paxton spokesman Anthony Holm said on July 2. "These attacks on Ken Paxton appear to have become a political hit job in the media, perhaps having the effect of inappropriately influencing the grand jury."

Schaffer denied that politics played a role in the indictment, saying Saturday he has "nothing personal" against Paxton based on his political views.

"Even if you found fault with Brian Wice or myself, how do you find it with the Texas Rangers?" Schaffer asked. "These are the most honest, straightforward, incorruptible police officers you're ever going to find. They don't have political motivations, and they certainly wouldn't have any against the sitting attorney general."

Paxton's Republican allies tepidly came to his defense Monday. Republican Party of Texas spokesman Aaron Whitehead said there is a reason why Texans have "warily observed" news of the indictment.

"Some of the outrageous events surrounding this sloppy process certainly do not typify the level of quality that Texans expect from our judicial system," Whitehead said in a statement. "Since being overwhelmingly elected by the voters of Texas, General Paxton has helped lock up child predators, investigated the odious acts of Planned Parenthood, relentlessly pushed back against an overreaching federal government, and we expect him to fight these allegations with that same zeal."

Governor Greg Abbott, Paxton's predecessor as attorney general, said "everyone is entitled to due process" under the law.

"As a former judge, I recognize this is the first step in a lengthy process and will respect that process as it moves forward," the governor said in a statement.

The Collin County Republican Party warned against a "rush to judgment," saying that a previous case involving a politician was "a politically motivated witch hunt."

"With this in mind, and believing that we have a fair and just judicial system, we anticipate that the process in the courts will fully in time illuminate the facts and reveal the truth," the party said in a statement. "We remind our readers that Ken Paxton has, for over a decade as Collin County state representative and state senator, and now as Texas attorney general, stood strong for conservative principles of limited government, rule of law, private property, free enterprise, freedom of religion, and enhanced liberty and opportunity for all Texans."

Paxton's critics repeated their calls for his resignation.

Matt Angle, founder of the Democratic political action committee Lone Star Project, said the attorney general's office "is already vacant" due to the charges.

"Ken Paxton isn't fighting for his political life, he's fighting to avoid spending life behind bars," Angle told The Morning News. "He won't have time to do anything else."

Texas Democratic Party Chairman Gilberto Hinojosa said Paxton is "an admitted lawbreaker." He urged Paxton to "finally act responsibly" and resign.

"Now he needs to spare Texas the embarrassment of a drawn out legal fight in the public eye, take responsibility, and accept the consequences," Hinojosa said. "It is time for Republican Attorney General Ken Paxton to resign. It is time to restore the public trust."

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