Ken Paxton

Are Big Donors Abandoning Attorney General Ken Paxton?


Ken Paxton mugshot
Ken Paxton’s mug shot after being indicted by a grand jury on three felony counts of securities fraud.  Collin County

Texas Attorney General Ken Paxton’s prodigious political fundraising plummeted after his criminal indictments in the summer of 2015. This could suggest that some donors are quietly rethinking their support of the embroiled attorney general, even as top GOP leaders have refrained from commenting on the plight of Paxton — a headliner at the Texas GOP Convention that opens in Dallas in May.

Political fundraising fluctuates throughout campaign seasons. So it helps to compare Paxton’s money to that of predecessor Greg Abbott — who amassed an unrivaled $21 million war chest over three terms as attorney general. From the launch of Paxton’s attorney general campaign in August 2013 to his indictments on securities fraud charges two years later, Paxton took in $8.3 million. This exceeded the $6.2 million Abbott raised in the comparable period surrounding his 2010 attorney general campaign. After his indictments, however, Paxton raised less than $250,000 in the last five months of 2015 — a fraction of the $1.9 million haul Abbott collected in the same months of 2011.

I have a particular interest in all of this. My employer, Texans for Public Justice, filed a complaint in 2014 urging the Travis County DA to determine if Paxton committed a crime by soliciting investment clients without a license. After special prosecutors investigated, a Collin County grand jury indicted Paxton in July 2015. The attorney general has pleaded not guilty to a felony count of not registering as an investment advisor and to charges that he fraudulently failed to tell investors that he was paid to promote stock in a tech company.

The campaign finance reports Paxton filed early this year offer the first insights into which Paxton supporters are standing by their embattled man and which could be experiencing post-indictment buyer’s remorse. So far, Paxton has reported that just four of his top 28 funders have written him post-indictment checks. While some of the lapsed donors undoubtedly still support Paxton, others could be reconsidering their support.

Ken Paxton's top donors, pre- and post-indictment.
Ken Paxton’s top donors, pre- and post-indictment.

Paxton has not reported post-indictment checks from his No. 1 donor, Empower Texans PAC, or from Midland oilman and Empower founder Tim Dunn. Yet the attorney general has not been abandoned by Empower, which promotes a tea party agenda by attacking such relatively moderate Republicans as House Speaker Joe Straus. In fact, Dunn wrote an op-ed last fall denouncing the attorney general’s indictments as political payback for Paxton’s unsuccessful challenge of Straus’ speakership in 2011. Dunn traced key criminal charges against Paxton to the complaints of one of Straus’ GOP lieutenants: state Representative Byron Cook. Cook and another investor claim that Paxton fraudulently induced them to invest in Servergy Inc. without disclosing that the tech firm had paid Paxton to promote its stock.

Paxton retains pockets of support, most notably among oil-patch conservatives. Meanwhile, many pragmatic business interests known to bankroll both Straus and Paxton have so far refrained from giving Paxton post-indictment checks. Prominent examples include Texans for Lawsuit Reform, developer Trammell Crow, tax firm Ryan LLC, HillCo Partners lobby firm, beer distributor John Nau, Border Health PAC, engineering impresario James Dannenbaum and Farmers Insurance. Most did not respond to messages soliciting their views of Paxton. An exception is HillCo lobbyist Neal “Buddy” Jones. “Ken Paxton is my friend and the reason I haven’t given to him [lately] is he just hasn’t asked,” Jones said. “When he does I’ll help him.”

The legal profession is a core constituency that has bankrolled a bipartisan succession of Texas attorneys general. Yet while such top defense firms as Vinson & Elkins, Andrews Kurth, Gardere Wynne, Bracewell & Giuliani, and Norton Rose Fulbright all funded Paxton’s election campaign, they have yet to give him a penny since his legal troubles began. By comparison, then-Attorney General Abbott collected checks from most of these major law firms in the last five months of 2011.

Ken Paxton's top donors by interest.
Ken Paxton’s top donors by interest.

The sole law firm to give money to Paxton since last August is the Dallas-based Winstead firm. The $10,000 that Winstead’s PAC gave Paxton in late 2015 is notable. Paxton’s chief rival in the attorney general’s race was longtime Winstead partner and then-state Representative Dan Branch. When the Texas Tribune reported during the 2014 campaign that the Texas State Securities Board fined Paxton for failing to register as an investment advisor, Branch denounced his opponent as morally unfit. “The Republican Party of Texas cannot promote a lawbreaker as our standard bearer to replace Greg Abbott,” Branch thundered in a campaign release. Yet Paxton roundly defeated Branch in a primary runoff one month later.

Through a spokesperson, Branch declined to comment for this article. Winstead PAC treasurer Glen Pryor did not return calls about the firm’s support of the indicted attorney general. The Office of the Attorney General referred questions about Paxton’s fundraising to his campaign, which did not respond to requests for comment.

Ken Paxton's post-indictment donor data.
Ken Paxton’s post-indictment donor data.

Few Texas attorneys seem to want to discuss political support for the state’s top legal official. Representatives of the State Bar of Texas, the Texas District and County Attorneys Association and the Texas Association of Defense Counsel all declined comment. These sources would not even tackle theoretical questions about how legal training on the presumption of innocence might affect the willingness of lawyers to bankroll indicted politicians.

One less-circumspect lawyer suggested that attorneys ultimately are partisan animals. “Attorneys do say ‘He’s innocent until proven guilty,’ but that’s done in a very ad hoc way,” said Keith Hampton, a Democrat and founder of the Austin Criminal Defense Lawyers Association who ran an unsuccessful campaign for the Texas Court of Criminal Appeals in 2012. “In Austin, if the [indicted] person is a Democrat we think [prosecutors] are jacking him around. But Republicans in Collin County see things very differently,” Hampton said. “In the end, the best barometer of where even defense lawyers are going to come down is their partisan stance.”

Despite fundraising challenges, the Paxton campaign ended 2015 with $2.5 million in the bank. Texas law prohibits Paxton from tapping that money to pay his defense attorneys (because his alleged crimes did not relate to his official actions).

Piling onto Paxton’s crushing legal costs, the Securities and Exchange Commission filed a lawsuit against him in April. Mirroring the criminal charges, the federal lawsuit seeks to fine Paxton for alleged securities fraud and to recover “any ill-gotten gains.” Paxton attorney Bill Mateja said in a written statement that his client looks forward to “establishing his innocence in both the civil and criminal matters.” Paxton has filed pretrial appeals in his criminal case. His next campaign report is due in July.