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Stinging Indictment

The scandal isn’t Ken Paxton’s alleged crimes. It’s that he was elected in the first place.

By October 2015Comments

Illustration by Thomas Fuchs

On the surface, at least, 2014 was a very good year for Republicans in Texas. At the beginning of the cycle, Democrats had hoped the state might be turning blue. But on election night, Republicans quashed that daydream so thoroughly that their success seemed almost punitive. Once again, the GOP ran the table. The party elected a new governor, lieutenant governor, comptroller, attorney general, agriculture commissioner, and land commissioner—all by at least a 19-point margin.

Yet despite Republicans’ electoral success, all is not well in the party or the state it has dominated for two decades and counting. At some point in the future, if historians are trying to figure out when Texas Republicans began to squander what could have been a permanent majority, they may point to 2014 as a watershed year—the moment when the party’s internal rot became evident. The problems with the Texas GOP today perhaps aren’t as glaring as the ones Texas Democrats faced in 1972, a result of the stock-fraud scandal known as Sharpstown. In March, two lawmakers, including House speaker Gus Mutscher, were found guilty of conspiracy. Later that year, voters ousted the incumbent governor and lieutenant governor, Preston Smith and Ben Barnes; they also replaced much of the Legislature. It would take twenty more years for the century of Democratic political hegemony to end, but the downfall had begun.

Since last year’s general election, the apparent strength of the Republican party of Texas has increasingly struck me as a trick of the eyes, enabled by the torpor of the state’s Democratic party and complacency among the voters themselves. And while the bloat and corruption of the GOP may not have reached Sharpstown levels, the effects on our state’s politics, policy, and public discourse are palpable, corrosive, and consequential.

Our new attorney general, Ken Paxton, is a clear symptom. As most readers probably know, he was indicted in late July for three felonies under state securities law. That’s not good, of course. But the indictment isn’t the most troubling part of the story. What’s troubling is that Paxton was elected at all.

Even before his legal troubles became public, his credentials for high office were underwhelming. In 2002 Paxton, a lawyer from McKinney specializing in wills, trusts, and investments, won a seat in the Texas House. Voters in Collin County would reelect him four times, though Paxton failed to author any significant legislation, chair any major committees, or even take an influential role in any important policy debates. Not until 2010, in fact, did he evince any notable political ambition. That year, Paxton announced that he would try to unseat Joe Straus as speaker of the Texas House. A formal challenge never materialized; Paxton took himself out of contention at the beginning of the 2011 session, citing a lack of support. But by positing the challenge, Paxton had won esteem among the growing tea party subset of the electorate. He shored up his credentials in 2012 by endorsing Ted Cruz over David Dewhurst in their bitter fight for the party’s U.S. Senate nomination. Hitching himself to Cruz’s rising star is perhaps Paxton’s singular political accomplishment. The people—or at least the several hundred thousand GOP primary voters who matter most these days—rewarded him for it. In 2012 he won a seat in the Texas Senate. Then, in March 2014, buoyed by repeated praise from Cruz, Paxton placed first in a three-way Republican primary for attorney general and began preparing for a runoff against his former House colleague Dan Branch.

By then, however, Paxton’s transgressions were becoming public. During the campaign, in response to a civil complaint, Paxton addressed a long-standing paperwork delinquency. Some of his clients in McKinney had needed investment advice as well as legal services. So, on several occasions, Paxton had referred his clients to Mowery Capital Management, also in Mc­Kinney. The owner of that firm, Fritz Mowery, was a friend of Paxton’s, and the two had an arrangement: Paxton would receive 30 percent of the asset-management fees from any clients he solicited on Mowery’s behalf. Per state law, anyone who solicits clients on behalf of an investment adviser is required to register with the Texas State Securities Board. Paxton did so in 2003 and again in 2013. However, in 2004, 2005, and 2012, when he also solicited clients, he did not register. Paxton admitted as much. On May 2, several weeks before the primary runoff, he was reprimanded and fined by the Texas State Securities Board. Though the issue was widely reported, Paxton easily defeated Branch in the runoff and proceeded to coast to victory in the general election despite barely bothering to campaign.

But Paxton’s administrative penalty drew the attention of Texans for Public Justice, a left-leaning watchdog group, which noted that Paxton had effectively admitted to committing a third-degree felony and filed a criminal complaint with Austin prosecutors. The matter was eventually referred to Collin County, where, in April of this year, the district attorney’s office requested that the Texas Rangers begin an investigation into Paxton’s investment work and a judge appointed two special prosecutors to oversee the case.

The result was the indictment, which was made public in August and includes three counts. There’s the third-degree felony charge concerning Paxton’s admitted failure to register. The other two charges are more serious, alleging securities fraud, which is a first-degree felony. According to the special prosecutors, Paxton encouraged two people (one of them state representative Byron Cook) to make significant investments in the McKinney-based tech company Servergy, in part by giving them the impression that he too had invested. In reality, Paxton was being compensated by the company, which is currently under investigation by the federal Securities and Exchange Commission for allegedly lying to investors. Each first-degree felony could send Paxton to prison for 5 to 99 years.

Since the beginning of the saga, Paxton has maintained that his failure to register was an innocent oversight and that it should be treated as such. “We have paid an administrative fine of one thousand dollars,” said his spokesman, Anthony Holm, in May 2014, after the disciplinary order was issued. “We are pleased this matter has been resolved.” A few days later Holm dismissed the news that a similar civil complaint had been filed with the federal SEC: “This is clearly a political hit job.” In July Holm bristled at Texans for Public Justice’s criminal complaint: “Now, roughly one hundred days prior to the general election, a Democrat front group admitted that they are trying to make this matter something bigger than it was.” In August he scoffed at the news that another group, the Texas Coalition on Lawyer Accountability, had filed a complaint with the state bar: “Frankly, it’s a bit silly.”

After the investigation began, in April of this year, Holm was less amused. “This appears to be a politically motivated effort to ruin the career of a longtime public servant,” he said this summer, adding that the special prosecutors, Houston lawyers Kent Schaffer and Brian Wice, were determined to try the case in the media. “These dominoes are falling,” he said in an interview with an Amarillo TV station, “and the victim is Ken Paxton.” (It’s worth noting that Holm would leave Paxton’s team in late July.)

Some may feel it’s a bit of a stretch to cast Paxton as the victim. He is a Republican, in a state where Republicans hold all the political power, and he was indicted in his hometown, in Collin County, which is not exactly a liberal enclave. Undeterred, though, Paxton has essentially argued that he is merely a goof rather than a crook. That may, in fact, be true. Paxton has always attributed his legal missteps to innocent error. He didn’t know it was against the law. He’s corrected the forms now. But corruption and incompetence are not mutually exclusive, and besides, legally speaking, Paxton’s motives don’t make a difference.

So for him to cry victim is fairly undignified. It’s also entirely predictable, considering the circumstances under which Paxton achieved high office in the first place. He became attorney general by becoming the Republican nominee. And he became the nominee by casting himself as the most conservative candidate in the Republican primary. He cited no real evidence to support this assertion because he didn’t have to. His connection to Cruz was apparently all he needed; his thin record and dubious qualifications were of comparatively little import to the sliver of the electorate that turned out for the runoff. Paxton isn’t the first Republican to use this playbook—he wasn’t even the only person to use it successfully in 2014—and he won’t be the last.

In the aftermath of the indictment, there have been calls for Paxton’s resignation. It’s easy to understand why. As attorney general—the state’s top law enforcement official—Paxton heads one of the most important and vital agencies in Texas. It wouldn’t be surprising if Paxton steps down by the midpoint of his term: Greg Abbott, who spent twelve years as attorney general prior to becoming governor, would surely like to appoint a replacement, and the attorney general might see a chance to offer his resignation as part of a plea deal.

But the people of Texas have no real recourse here, nor do we necessarily deserve one. Republican voters could have taken the trouble to educate themselves about the basic characters of the candidates on offer; again, several of Paxton’s transgressions were known before the election. If Texans, especially Republicans, don’t want an alleged felon for attorney general, they should keep that in mind next time before they nominate and elect one. Meanwhile, Democrats may be enjoying some schadenfreude at Paxton’s expense, but they too are partly responsible for his election. If Democrats competed effectively in statewide races, if Republicans had any fear that nominating someone like Paxton might lose them a general election, then we might have avoided this embarrassment. As for the Texans who don’t vote—well, their own behavior tells us that their preferences don’t matter.

As it stands, there’s nothing that would force Paxton to step down. A Texas officeholder can continue to serve under indictment, and Paxton wouldn’t be the first attorney general to do so. Jim Mattox was elected attorney general in 1982, indicted in 1983, acquitted in 1985, and comfortably reelected in 1986, by voters who appreciated his instinct for combat. Why would things be different for Paxton? He is the product of a one-party political system that’s demonstrably troubled and that many Texans don’t seem especially motivated to change. It’s a truism that people get the officials they deserve. And Texas attorney general Ken Paxton is an indictment of us all.

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  • Aslan

    When you only have a one-party system as Texas effectively does, corruption is rampant. Texas is now like a banana republic where the powerful flaunt the law.

  • Kris Weibel

    Thank you for great piece. I have said a gazillion times; Texas YOU. OWN. THIS. You did not bother to educate yourselves on the candidates nor their character. Did you think that by electing a felon, that would change the felon? No, you were not thinking. Period. Yes, the democrats that stayed home, YOU. OWN. THIS. AS. WELL.

  • Indiana Pearl

    Well done, Ms. Grieder. I dislike one-party rule irrespective of which party is in control. It leads to corruption and incompetence because there are no checks and balances. Texas deserves better than an alleged felon or a goof.

    Why is the Democratic Party so moribund? That would be a good story for another day.

    • Erica Grieder

      Funny you should mention it; I’m planning to take a look at Texas Democrats this week on the blog. and thank you!

      • Indiana Pearl

        I’m in!

      • gordo

        Only need one eye for that endeavor, I’m afraid.

        • Indiana Pearl

          We can do better . . .

    • Jed

      maybe because they’re in the minority?

      blaming the losers for the result in a majoritarian system makes as much sense as blaming jesus for his own crucifixion.

      • Indiana Pearl

        Nope. There are structural and organizational issues that exacerbate the problem. Don’t blame the victims.

        Before redistricting, my US congression rep lived in my neighborhood. After redistricting the rep who “represents” me lives in Dallas.

        • Jed

          “There are structural and organizational issues that exacerbate the problem.”

          which of us is doing the victim blaming here?

          gerrymandering doesn’t affect statewide races.
          us congressional elections are not handled by the state party.

          the problem is there are more republicans in texas than democrats. full stop.

          how energetic would *you* be if you saw that your opponent could get criminals elected without even campaigning?

          • Indiana Pearl

            Of course gerrymandering rules state races!!!!!!! What planet are you on…?

            I disagree that there are more Republicans, only that they have more power. Corruption rules.

          • Jed

            not stateWIDE races. like paxton’s.

            corruption certainly does rule. but i believe polls also bear out the relative numbers of republicans v. democrats?

          • Indiana Pearl

            Straight ticket voting . . . when Joe Cowboy pulls that “R” lever, that’s all she wrote.

          • don76550

            You sure thought that was a great idea when the straight voting went for democrats. Hipocracy anyone?

        • John Johnson

          It’s always someone else’s fault with you. “The referees were bought off, they played with deflated balls, their bats were corked, he was putting something in the ball, he’s on roids, our QB had the flu, it was her time of the month, they have better practice facilities.” No one respects a whiner. Jed is right. Dem’s are a minority. You may think there are many more Dem’s in the state than Repub’s, but you ain’t squat until you take the time to vote.

          • Jed

            both are true.

            republicans are cheaters.

            and there are more of them.

          • Indiana Pearl

            “You, you, you . ..”

            Lame. I don’t do football metaphors.

            I’ve voted every single time since I moved here. Voter suppression and gerrymandering keeps those pesky black and brown people from having access to the polls.

            Educate yourself about the realities of democracy in Texas. It’s a mess . . .

          • John Johnson

            Well then, pick metaphors that work for you. You weren’t here when Ben Barnes journey to the throne got derailed here in Texas. He could have been the Dem version of King Perry. The Dem’s blew it. All the moaning and groaning you are doing right now, the other side was doing back in the ’60’s and early 70’s….and for the same reasons. You just don’t get it. Politics stink. Remember how you used to get on an airplane or walk into a bar, and when you got home you smelled just like all the smokers, even though you never took a puff? That’s politics. You get all the way home and don’t smell a thing…but the next morning, after breathing some fresh air for a few hours, you walk into your closet and want to puke. Everything in there next to you jacket smells like a twisted up Marlboro butt. While you were running with the smokers and toke’ers, you were oblivious to it. The Professor understands, but won’t admit it; you are just too biased to think rationally. I commend Jed on his dissection here. He hit the nail on the head.

          • Indiana Pearl

            Better metaphor wrt going to a bar with smokers . . . but, my friend, they all smell up your hair and clothes, not just one party or the other.

            While we’re on the subject of “irrational,” I would gently suggest that your hatred of Obama falls into that category.

          • John Johnson

            I did not single out one group as bad and the other good. The taint encompasses all. With regards to Obama, my disdain is anything but irrational. He is the worst. Appointing Sharpton as an emissary is s prime example. One of dozens.

          • don76550

            On the other hand, Obama could sodomize a 3 year old to death and you would still be his cheerleader, just like all other extremist liberal democrats.

          • don76550

            By “voter supression” you mean opposition to voter fraud, the only way you can win.

    • don76550

      Moribund? Perhaps because in Texas you are viewed of the party of perversion, excessive taxation, pedophillia, loss of freedom, gun confiscation, marxism, hatred of America, racism, infanticide, hatred of our bill of rights just to name a few of the reasons real Americans loathe your malignant party. I think anyone who votes for a democrat is guilty of treason.

      • Indiana Pearl

        “Pedophilia”? You mean like Josh Dugger and Denny Hastert?

  • Ogie Wilson

    There is no better example of the bloat and corruption on the Texas GOP today than Se. Connie Burton today announcing she is having a candidate for Republican senate candidates in Senate District 24 – in Temple, over 150 miles from the district she is supposed to be serving. What is she up to? Obviously some mischief of some kind since people here don’t even know who she is. One of my young Republican operative friends told me that when Senator Cruz made the speech complimenting Paxton, he also said some very mice things about Rep. Branch. But the Paxton campaign had been tipped off to have a camera crew at the speech and the Branch people were not. These are the kind of games that the Cruz crowd plays. Burton is playing some sort of game here and since she is Ted Cruz’s number one gal in Texas, you can be assured that games will also be played in Senate District 24.

    • don76550

      I know who she is. I was proud to contribute to her campaign. She is head and shoulders over the left wing baby killer she replaced. I live in SD 24. I welcome her thoughts, even though I will be supporting CJ Grisham in the firse go around. I will definately consider any recommendations she has for which RINO to vote against.

  • Angelo_Frank

    Gerrymandered districts, restrictive voter I.D. laws and the lowest voter turnout in the nation often have inauspicious consequences.

  • Mark P. Yablon

    Speaking of hit jobs….

  • My Texas Legislative District before the last redistricting included three counties which bordered my home county and one county which bordered two of those three. The house district now snakes along the Texas Louisiana border somewhere between 100 and two hundred miles in length and just a few miles wide in some areas.

    • Indiana Pearl

      Exactly my experience! Is this representative democracy? Texas was cited for its egregious irregularities in redistricting.

      Now the corporate wing of the Supremes is set to completely overturn the VRA. Be afraid. Be very afraid.

      • don76550

        Sure is a good thing democrats never did that when they were in control, huh! I am sure you would not stoop to hypocracy.

        • enp1955

          Gerrymandering is bad whoever does it – Republicans or Democrats. The technique is designed to limit the democratic process, period. Don’t point to, “the other side does it” as an excuse for this abhorrent practice.

          • don76550

            Don’t whine about things you are guilty of.

          • enp1955

            Don, I’ve never gerrymandered anything in my life. I’ve never knowingly supported anyone who did. I never would support anyone that did. And I’ve always spoken against it regardless of party affiliation.

            Don’t assume.

          • don76550

            When has your party NOT gerrymandered districts when they were in power? How about NEVER. For you to be speaking a true statement you would have had to vote 3rd party in every election. I know that is not true. Don’t assume your smoke screen is credible.

          • enp1955

            Which is my party?

    • John Johnson

      We have county lines. We should use them as guidelines in forming voting districts as well.

  • don76550

    Erica I would consider your diatribe if Paxton ever get convicted of anything. Until then you are nothing but a propagandist attacking him because you disagree with him politically. When is the last time you wanted Hillary, the head of the Clinton crime family, to step down.

    • Indiana Pearl

      Don is the guy who said, when he disagreed with me a couple of months ago, “Shouldn’t you be running barefoot through the jungle with a bone in your nose?”

      Ignore him.

    • John Johnson

      Don, I am not your enemy. If you have been here since this blog started, you know this is true. If you defend Paxton, you lose all credibility. If you are his life-long friend, I understand this; if you are simply a gung-ho TP supporter who is blind to the truth, I feel sorry for you. Paxton, at best, was a do-nothing in the legislature. Tell me about all his qualifications. Tell me about all his accomplishments. Tell me why you deem all these charges dropped on him to be lame. I really want to know.

      • don76550

        I am not so much a Paxton supporter as a believer in obtaining a conviction before demanding his head.

  • Kenny Easwaran

    “As for the Texans who don’t vote—well, their own behavior tells us that their preferences don’t matter.”

    Well, no – so much of the election law in this state is designed to get Texans not to vote. I’m not talking about Voter ID laws (though they don’t help) – I’m talking about the fact that I, someone who reads political blogs every day, just found out yesterday that we have 7 constitutional amendments to vote on in less than two months! And despite an hour or so of effort last night and today, I still haven’t found out if there are any state or local offices that I’m voting for at the same time. And for the constitutional amendments, I don’t have any idea what the arguments for or against them are, because the state doesn’t solicit those or send them out.

    If you make it hard to find out what’s going on in an election, of course people aren’t going to take the time to get educated and vote!

  • wessexmom

    Excellent and cohesive piece, Ms. Grieder (though you should have mentioned Sharpstown later in the piece. 1972 is ancient history, after all). I think you’re starting to see the light. Perhaps it won’t be long before you’re able to see Ted Cruz for what he really is–a doughy piece of hot air who couldn’t care less about governing on ANY level. Papa Cruz threw Molotov cocktails in Havana; Junior drops stink bombs on the Senate floor and more recently, on the mall. He’s about as “brilliant” as the shards of a broken mirror.

    • John Johnson

      I like Ted Cruz…I don’t love him – I like him; not all of him; part of him. I like the part that stands up and calls a liar, a liar. I like the part that wants to defund Planned Parenthood ( the video conversations made me sick); I like the fact that no one wants to debate or interview him because he has a mind and tongue like a Wilkinson sword’s blade. I like the fact he is smart enough to realize that there is something that Trump is saying that has attracted followers (just imagine how many more if he were using softer words that had been simply chewed on for a bit before they were spit out), and “adjust” accordingly while others are scratching their heads and wondering “What do I do now?” I want change…pure, unadulterated change. We were promised that seven years ago, but promised changes were forgotten, and new agendas took their place soon after inaguration. Let the loud guys speak. Let’s listen to something different. I’m tired of the pantywaists and the go-along-to-get-along’ers. They have shown themselves to be impotent…they can’t deliver…the big popular, good looking, stud horses that can’t get the job done. Put ‘um on the street. Turn them into political analysists like Huckaby became. Send Cornyn back to Texas to collect debts like Perry is about to be doing. Can’t you smell the stench? You may be able to close your eyes and hear Cruz, but you can’t smell him. That means something to me.

      • Indiana Pearl

        If you want more abortion and out-of-wedlock births, cancel funding for Planned Parenthood.

  • Indiana Pearl