- Texas Attorney General Ken Paxton was booked on three felony counts last summer.
The U.S. Securities and Exchange Commission’s fraud lawsuit against Paxton, filed in April, echoes the criminal charges against the state’s top lawyer: that Paxton duped investors into dumping money into a probably bogus north Texas tech firm without disclosing that he was being compensated for his recruiting efforts.
Along the way, those in Paxton’s corner have basically circled around one central theory, politics, which his lawyers reiterated in a court filing this week.
It's an unusual theory, especially when you consider that Paxton’s criminal case ended up in his home turf, the GOP enclave of Collin County. It was a Republican judge who appointed two special prosecutors (one of whom helped overturn former House Majority Leader Tom DeLay’s conspiracy and money-laundering convictions) to spearhead the case alongside an investigation by the Texas Rangers. When a Collin County grand jury indicted him, Paxton, in legal filings, called the Republican judge who oversaw it “vindictive” and practically accused him of criminal misconduct in his handling of the case. Almost every judge on each appeals court that refused to toss the charges against him is a Republican.
Still, a federal judge dismissed the SEC case against Paxton this fall, but the feds quickly re-filed the case with bolstered, more detailed allegations. And in a court filing this week in that federal civil case, Paxton's attorneys return to the 'this is just about politics' defense theory by zeroing in on one person: Corsicana Republican State Rep. Byron Cook.
The charges against Paxton, both in state and federal court, allege that he misled Cook and another investor in regards to North Texas tech company Servergy Inc., claiming Paxton convinced Cook and another businessman to invest hundreds of thousands of dollars in Servergy without disclosing that he himself was being paid by the company to do so. (The SEC has also accused Servergy of lying to its investors; falsely claiming its data servers had already been sold to huge companies like Amazon and Freescale, when that wasn't true; and of lying about the very servers it was hawking, falsely claiming they required 80 percent less cooling, energy and space than others on the market.)
Cook has been an irritant to the hard-right wing of the Texas Republican party since at least the 2009 legislative session, when he helped Democrats and other moderate Republicans keep anti-abortion, anti-immigrant, and anti-union bills from hitting the House floor. By 2011, Paxton (then a state representative), was the Tea Party-backed pick to replace middle-of-the-road Republican State Rep. Joe Straus as House Speaker. Largely because of moderate Republicans like Cook, Paxton lost that battle. When Paxton then ran for Attorney General in 2014, Cook backed his more moderate opponent in the GOP primary.
“It’s not a coincidence that the chief witness against me in these charges is a political adversary of mine," Paxton said in a video to vowing to fight the charges against him earlier this year. "Some folks are still upset that their moderate candidate didn’t win.”
This week, Paxton's legal team hinted at the intra-party rift by honing in on Cook, asking for a judge to force the SEC to turn over notes from their interviews with him. In their filing, Paxton's lawyers allege that Cook may be changing his story as the case evolves – for political reasons, of course. “Mr. Cook is a member of the Texas legislature and is reported to have supported Mr. Paxton’s opponent in the Republican primary for the Attorney General nomination," they write.
There's actually an even deeper rabbit hole to go down here. Paxton's hard-right supporters have taken this theory a step further, pointing to Joel Hochberg, the other investor that prosecutors say dumped money into Servergy at Paxton's prodding. What's the deal with Hochberg? According to uber-conservative groups like Empower Texans, he's clearly part of the conspiracy against Paxton because he created the 1990s video game “Battletoads,” which was produced by Tradewest, which is a video game company Cook co-founded. (Seriously.)
Regardless of what happens in Paxton's federal case, he's run out of tries to get his criminal charges dismissed in state court, meaning he'll likely go to trial sometime next year. Depending on how much his lawyers lean on the intra-party squabbling (and Battletoads) defense, it could turn into a real weird, fascinating show.