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Indicted, impeached, under FBI investigation: What problems does Texas AG Ken Paxton face?

Texas Attorney General Ken Paxton faces an upcoming impeachment trial, FBI investigation, criminal securities fraud indictments, as well as a state bar disciplinary and whistleblower lawsuits that could result in his removal from office, disbarment or imprisonment.

AUSTIN — Texas Attorney General Ken Paxton, who was impeached in May, is also facing multiple fraud indictments, a whistleblower lawsuit, an FBI investigation and a state bar disciplinary case.

Altogether, the potential political and legal repercussions of his myriad troubles are high.

The impeachment trial, which kicks off on Sept. 5, will determine whether Paxton is removed from office for alleged corruption. The Texas Senate could also vote on whether to ban him from holding a state office ever again.

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Allegations in the 20 articles of impeachment include that Paxton was bribed by Nate Paul, an Austin real estate developer and campaign donor; abused his power to help Paul; lied on state ethics forms regarding his finances; intentionally delayed 8-year-old securities fraud indictments from going to trial; and is generally unfit for office.

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The maximum penalty Paxton faces if convicted in two criminal securities fraud cases is 99 years in prison — for each charge.

The whistleblower lawsuit could cost Texas taxpayers, or Paxton himself, millions.

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The FBI is investigating Paxton based on the corruption allegations underlying the impeachment articles and whistleblower lawsuit. While federal authorities have not charged him with any crimes, a grand jury is reportedly hearing about Paul and Paxton’s ties from witnesses close to the attorney general.

Finally, a legal ethics lawsuit filed over his role in challenging the 2020 presidential election results could result in his disbarment.

Paxton denies all wrongdoing.

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Each of these cases is ongoing. After years under a cloud of legal and political scandal, Paxton will soon find out whether he gets to keep his elected office, his license to practice law — and even his freedom.

Here is a brief look at the different troubles the suspended attorney general faces.

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Impeachment

The Texas House voted to impeach Paxton on May 27. The vote was not close: 121 of the 149 House members, including a majority of its 89 Republicans, backed impeachment.

Paxton was immediately suspended from performing his official duties without pay.

On Sept. 5, the Texas Senate will hold a trial to determine whether he should be removed from office based on these alleged offenses. Two-thirds of the 31 senators present are needed to convict; the Senate will vote separately on each article of impeachment and only one conviction is needed to approve his removal.

Sen. Angela Paxton, R-McKinney, the attorney general’s wife, will be barred from voting.

If convicted, the senators can also vote on whether to prohibit Paxton from ever again holding state public office. There are no criminal penalties for Paxton, like prison time, if convicted by the Senate but the proceedings promise to delve into sensitive issues, including allegations that Paxton had an extramarital affair.

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Whistleblower lawsuit

Paxton’s request for $3.3 million in state money to settle the whistleblower lawsuit that started the impeachment process.

In late 2020, eight high-ranking employees in Paxton’s agency told the FBI they believed the attorney general was abusing his office to help Paul. All of them eventually resigned or were fired. Four subsequently sued Paxton’s agency alleging retaliation.

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In February, Paxton’s agency confirmed it had reached a settlement with the whistleblowers and asked lawmakers to set aside funds for it. State budget writers, and the House Speaker, balked, saying it was a bad use of taxpayer money.

The next month, investigators hired by a House ethics committee began probing the funding request and the whistleblowers’ accusations.

Lawmakers refused to fund the settlement, so the lawsuit against the Office of the Attorney General is still pending. Any developments are unlikely until after the impeachment trial.

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Under state law, the agency — not Paxton himself — is the defendant in the whistleblower case. This means the state, and therefore taxpayers, typically pays for any settlements in such cases. Lawmakers’ refusal to do so is unique and illustrates the anger they felt in being asked to fund Paxton’s request.

Paxton could choose to pay the $3.3 million himself but has avoided answering whether he would.

FBI investigation

The FBI is investigating the whistleblower corruption allegations against Paxton, though there are scant details into exactly what they’re probing or whether authorities plan to bring charges.

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Paxton’s lawyer recently confirmed that the investigation is ongoing and noted that the outcome will affect the attorney general’s long-delayed state securities fraud cases. If Paxton is arrested by the FBI, they explained, they would be more likely to settle the fraud cases so as to focus on the potentially more serious federal charges.

In June, Paul was indicted on several federal financial crimes. None of them appeared to relate to the corruption allegations against Paxton. But Paxton’s lawyer said he believed federal authorities would attempt to make a deal with the businessman in order to get him to flip on Paxton.

On Aug. 10, the Austin American-Statesman reported a grand jury in San Antonio was looking into Paul and Paxton’s relationship, and that witnesses close to the attorney general had been called to testify.

Allegations of fraud

In 2015, a Collin County grand jury indicted Paxton of three felonies related to crimes allegedly committed during his time as a state representative.

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He is accused of getting friends and other elected officials to invest in Servergy Inc., a McKinney technology company, without disclosing that he had received stock from its CEO. He is also accused of funneling clients to a friend’s investment firm without being properly registered with the state.

Paxton is charged with two first-degree felonies, which carry penalties of 10 to 99 years in prison, and one third-degree felony, which carries a penalty of two to 10 years in prison, plus fines.

Paxton has not yet gone to trial as various issues delayed the cases, including arguments over whether to hold the trials in Collin or Harris County and how much the prosecutors should be paid.

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One of the articles of impeachment accuses Paxton of intentionally delaying the trials, “which deprived the electorate of its opportunity to make an informed decision when voting for attorney general.” However, the Senate will hold this article in abeyance and take up the other allegations first.

This month, Paxton appeared in a Houston courtroom for the first time in years in the cases. Acknowledging the impeachment trial outcome will affect his criminal cases, the judge set the next hearing for October.

Meanwhile, Paxton has been roped into a securities fraud lawsuit filed by the man who handles his blind trust against the two men who accused him of fraud. He has been designated a “responsible third party” in that case and been deposed twice, but his depositions remain under seal.

Disciplinary lawsuit

Finally, a disciplinary committee of the State Bar of Texas sued Paxton over his legal attempts to challenge the results of the 2020 presidential election. This lawsuit is also on hold until after his impeachment trial.

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If found guilty of bringing a “dishonest” legal challenge to President Joe Biden’s election wins in four swing states, Paxton could face disbarment or a suspension of his law license in Texas.

Brent Webster, Paxton’s second-in-command at the agency, faces a similar lawsuit.