Paxton raises more than half million dollars for his legal defense
Contributors’ list includes ‘dark money’ group
July 5, 2017
Updated: July 5, 2017 9:56pm
AUSTIN – Attorney General Ken Paxton’s wealthy friends and business contacts shelled out nearly a quarter of a million dollars last year to fuel the embattled Republican’s long-running legal battle to shake off charges of securities fraud.
The contributions included a $10,000 gift from a Washington-area “dark money” group that favors limited government.
Paxton reported receiving $217,700 in gifts to his legal defense fund last year, according to his personal financial statement filed Friday. That’s down from 2015 when the high-profile statewide elected official raised $329,000 for his defense team.
However, the gifts have grown the attorney general’s legal defense fund to $546,700 over two years while Paxton inches closer to a much-anticipated trial in Houston and the 2018 election cycle, in which he is expected to run for another term as the state’s top lawyer.
The contributions show Paxton has friends both in and out of Texas willing to contribute generously to his legal fight, said Brandon Rottinghaus, a political science professor at the University of Houston and expert on executive corruption.
By the numbers
Donations Paxton reported receiving last year for his legal defense fund.
Donations Paxton has reported receiving for his fund over two years.
Out-of-state contributions Paxton has received, including a $50,000 donation out of Arizona.
“These kind of donations from inside and outside the state from mega-donors tend to look like they’re influencing the attorney general as the politics of the indictment naturally flow into the legal questions involved,” said Rottinghaus.
Paxton, who is accused of failing to tell investors he would make a commission off their investments in a North Texas tech company, reported donations from 15 people or couples identified as “clients” and “family friends,” according to state records. The largest contribution, $75,000, came from Carrie Parsons, an executive at Freeman, a business branding firm, and a campaign contributor. The gift from Parsons and her husband, both from Dallas, marks their second donation to the legal defense fund after giving the same amount the year before.
The second largest contribution of $50,000 came from Alfred and Janet Gleason of Green Valley, Ariz. Another $10,000 came from Plano car dealer Ray Huffines and his wife, Ann. Ray’s brother is Sen. Don Huffines, a Dallas Republican. Another $5,000 came from McKinney City Councilman Don Day.
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Paxton also received $10,000 from The Annual Fund Inc., a little-known conservative group, according to the Associated Press. Paxton’s spokesman would not disclose who was involved in the group, saying only that the Annual Fund supports “the cause of limited government. So does Attorney General Paxton,” and that “his conservative record has drawn the attention of many conservative groups and individuals across the country.”
The funds coming from The Annual Fund Inc. are considered “dark money” because their contributors are not disclosed.
Tapping the gift law
More than $61,000 of contributions to the attorney general’s legal defense fund came from out of state, including a $50,000 contribution out of Arizona, a $1,000 donation from Virginia and $150 check from Arkansas.
Half of the givers cut checks worth at least $10,000, according to the filing. Other large contributions came from McKinney, Frisco and Plano.
Paxton is prohibited from using campaign cash to pay his lawyers because the charges against him are unrelated to his tenure in office. Instead, he has tapped the state’s gift law for the last two years, identifying gifts to aid his legal defense as allowable under the “independent relationship exception.”
State law generally bans elected officials from accepting gifts if the official knows the giver is subject to their agency’s authority. Elected officials are allowed to accept a gift from a relative or a longtime friend whose relationship has nothing to do with the officer’s state duties.
The issue was a point of contention at the Texas Ethics Commission which had weighed for months an anonymous request from an employee at the attorney general’s office about when someone could give a gift to an employee who works for the agency. The commission narrowly rejected a draft opinion last year that would have given Paxton legal cover to solicit gifts for his legal defense fund, but the commission did not bar him from using the gift law.
Due back in court July 27
Questions over Paxton’s relationship with his gift givers became an issue last year amid revelations that Paxton accepted $100,000 from James Webb in 2015, although Webb’s company was under investigation by his office for Medicaid fraud. The attorney general’s office signed off on a $3.5 million settlement of a whistle blower lawsuit against the company, co-signing with the U.S. Justice Department. Paxton’s office said the attorney general was not involved in the case, although an official with the Justice Department said his office was involved in the investigation.
Paxton was charged in 2015 with two counts of first-degree felony securities fraud for failing to disclose to investors he would make a commission off their investment in Servergy. He also faces one lesser count of failing to register with the state as an investment adviser.
He and his legal team are due back in a Houston criminal court on July 27 as the judge mulls Paxton’s trial date. The judge will also decide whether to delay the trial while a team of three special prosecutors from Houston wrangles with the Collin County Commissioners Court over $205,000 in back pay the county refuses to pay.
Paxton’s long-running legal battle has included multiple appeals in failed efforts to convince the court to throw out the criminal charges against him. However, a federal judge threw out similar civil charges brought against him by the U.S. Securities and Exchange Commission earlier this year.