Texas AG Ken Paxton is shielding details about his real estate buying spree from the state

From The Texas Newsroom:

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Texas Attorney General Ken Paxton has purchased millions of dollars’ worth of properties in recent years. So why is he keeping them secret?

Paxton and his blind trust have been on a real estate buying spree since 2021, more than doubling his holdings by purchasing land and homes from Hawaii to Florida.

But of the 10 properties the attorney general or his blind trust currently own, just one was listed on his most recent official financial statement. That’s even fewer than last year, when The Texas Newsroom first reported that Paxton did not disclose all of his properties to state ethics regulators.

Experts said Paxton appeared to be violating state ethics rules. Elected officials are required to report all properties they own to the Texas Ethics Commission. But at the time, the attorney general said he was not breaking the law and called it “some made-up issue.”

Paxton’s spokespeople did not answer questions about why he’s choosing to disclose even less about his properties this year. One former ethics regulator says the attorney general’s financial disclosures — or lack thereof — appear to be ripe for investigation.

“This is actually a very important document because of the possibility for improper influence of an office holder,” said Jim Clancy, the former chairman of the Texas Ethics Commission. If a public servant’s spending suddenly spikes, he said, “it raises a question about the possibility of improper influence of an office holder who only has one reported source of income.”

State ethics commissioners are taking a look at financial disclosure requirements as part of a larger periodic review of agency rules. They could take up the issue at their meeting this month.

A Republican in his third term, Paxton is no stranger to controversy.

The FBI is investigating him for alleged corruption, and he continues to face a legal ethics lawsuit for his role in challenging the 2020 presidential election results. Paxton beat an attempt to impeach him last year and recently cut a deal with state prosecutors to avoid being tried for felony fraud. He agreed, instead, to perform community service, take legal ethics courses and pay restitution to his alleged victims.

Ten properties. Five states. Millions of dollars.

Once a year, public officials are required to file a report with the Texas Ethics Commission that details how they make and spend their money. This form, called the personal financial statement, is meant to give the public a window into a politician’s wealth and expose any potential self-dealing or conflicts of interest.

If you look at Paxton’s most recent financial statement, filed July 1, it appears as though he owns just one property, in Collin County. The address is redacted.

But according to appraisal district and mortgage records reviewed by The Texas Newsroom, Paxton or his blind trust actually own 10 properties in five states. These include three additional homes in Texas, a luxury cabin in Oklahoma, multiple properties in Florida and plots of land in Utah and Hawaii.

Six of these properties were purchased within the last four years, records show.

Paxton and his wife, state Sen. Angela Paxton, together own two of the properties in their names, according to local appraisal district records.

One is their family home in McKinney, which appears to be the one property they did disclose on their financial statements. They also own a three-bedroom townhouse outside Clearwater, Florida, these records show. A copy of the deed shows the home sold for $647,850.

Ken Paxton is listed as the sole owner of the Oklahoma cabin in Broken Bow. He appears to be renting it for $525 a night. The five-bedroom home boasts “impressive floor to ceiling windows,” a wet bar and pool and shuffleboard tables, according to the rental listing.

Attempts to reach the rental company’s management have been unsuccessful.

The Broken Bow and Clearwater homes were purchased in 2022. But neither Paxton has listed them on their annual statements under sections for real property or rental income covering 2022 or 2023.

Paxton’s blind trust is the named the owner of the seven other properties. These include three Texas homes in Brazos and Travis counties, which he has previously disclosed on his financial statements, two homes in Marion County, Florida, and the plots of land in Lahaina, Hawaii, and Eden, Utah.

Paxton purchased five of these properties and later moved them into the blind trust in 2021 and 2022.

None of the trust’s properties are disclosed as either interests in real property or rental income on either Paxton’s annual statement covering 2023. Paxton does have multiple debts listed under the“personal notes and lease agreements” section of his financial form, but it is not clear to which properties these may correspond.

If Paxton truly does not know or control what’s in the trust, he may not have to list those assets on his financial statement.

Ken Paxton’s silence

State ethics guidelines say public officials should disclose all homes they own as interest in real property, mortgages they’ve taken out as debt as well as the income for any rental units.

The Texas Ethics Commission can proactively investigate alleged violations of these rules, or any state resident can file a complaint against someone they believe is breaking the law. The commission keeps these matters confidential unless the allegations are substantiated.

In 2011, then-Gov. Rick Perry had to pay $1,500 for failing to report rental income and property debt. The state’s top criminal court judge, Sharon Keller, was assessed a $100,000 fine in 2020 for not fully disclosing millions of dollars of real estate and income. She eventually paid $25,000.

Even if the commission fined Paxton, it’s unclear whether he’d pay up. He already owes $11,000 for filing late reports with the commission, according to the Houston Chronicle.

Paxton has also argued the state’s disclosure rules are not clear.

Last year, he disclosed ownership of four properties and rental income from two properties on his financial statement covering 2022. He also attached a note to state regulators, in which Paxton said the laws about what properties and rental income he needs to disclose “lack detail and are somewhat abstract.” He pledged to ask the commissioners for guidance “in the coming days,” and said he would update his forms if needed.

More than a year later, Paxton has done neither.

After The Texas Newsroom reported on Paxton’s lack of disclosures last year, he ducked questions about the issue for months. Finally, reached at a campaign event in January, the attorney general called it “some made up issue” and said, “I’ve disclosed everything I’m required to disclose.”

After Paxton filed his new statement on July 1, The Texas Newsroom followed up.

The Texas Newsroom has not heard back from his lawyer or campaign contacts since then. Emails sent to Sen. Angela Paxton’s campaign and capital office contacts also were not answered.

The Wall Street Journal first reported Paxton’s buying spree in summer 2023.

Paxton used cash to purchase some of the properties and also took out about $1.6 million additional in mortgages, the Journal reported. At the time, the attorney general’s then-lawyer explained how Paxton financed purchases on an annual state salary of $153,750.

“General Paxton decided to direct much of his long-term savings from a brokerage account to real estate,” Tony Buzbee told the Journal. “He did so at a time with low interest rates, believing it was a better long-term investment to provide for his family. There is nothing more to it than that.”

Texas Ethics Commission takes another look

Paxton’s case is also complicated by his blind trust.

Created in 2015, the Esther Blind Trust was meant to create a firewall between Paxton and his increasing business investments as he was sworn into statewide office. Blind trusts are common among officials in public office, and require the creator to waive control the financial assets placed in the trust.

Clancy, who served on the Texas Ethics Commission from 2010-2018, questioned whether Paxton’s trust is truly blind.

That’s because the Paxtons appear to have knowledge of its current assets, public records show. For example, five of the trust’s seven properties were initially purchased by Paxton and later moved to the trust, according to county appraisal district records.

These same records show Angela Paxton has paid the taxes on the Utah land since 2021. Also, while the trust may be the named owner, Paxton’s home in McKinney is the mailing address listed on appraisal records for the three additional Texas homes and the land in Hawaii.

Clancy said if a politician knows what’s in his blind trust and controls it to any real degree, he can not claim independence from those assets and should tell ethics regulators about them.

“The duty to disclose the assets and income that the officeholder knows about exists, despite the existence of the blind trust, if they know the assets,” he said, “because it’s not blind.”

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