Ken Paxton no longer faces a trial for securities fraud. What does that mean for Texas politics?

Paxton has become an increasingly powerful figure on the Texas and national stages.

By Sarah AschMarch 27, 2024 11:47 am,

Texas Attorney General Ken Paxton is poised to be an even more powerful figure in the Republican Party after he successfully struck a deal to avoid a criminal trial in the securities fraud case he has been facing for years. 

The deal, which was announced in Houston Tuesday morning, does not require Paxton to admit wrongdoing. But he does have to pay restitution of $271,000, perform 100 hours of community service, and take 15 hours of legal ethics courses. 

The pre-trial deal in Paxton’s federal securities fraud case raised the eyebrows of most Texas politics watchers — these charges had been hanging over his head since before his election to the Attorney General’s Office and had the potential of landing him a long stint in prison were he to have been found guilty.

This development comes after what has been an eventful 12 months for Paxton, who was impeached by the Texas House last May before being acquitted during his impeachment trial in the Texas Senate in the fall. 

There is still an ongoing civil case against Paxton, brought on behalf of the employees who worked in his office and had been dismissed — these whistleblowers reported conduct to the authorities that was ultimately part of the impeachment case against Paxton. 

Gabriela Okundaye, who lectures on political science at the University of Texas at Arlington, said one thing to consider is the judges on the Texas Court of Criminal Appeals court who lost their primaries to candidates Paxton backed this election season.

“With the ousting of those three judges — Sharon Keller, Barbara Hervey, and Michelle Slaughter — this essentially now paved the way for Ken Paxton to feel comfortable,” she said. “No matter the outcome, he’s not going to face many or any repercussions at all, save for having to pay the restitution, the 100 hours of community service, and the 15 hours of legal classes he needs to take.”

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Okundaye said she also sees a path for Paxton-backed candidates in the runoff elections in May and in November to strengthen their candidacies by casting this settlement as a victory. 

“Those individuals who were in the primaries can now continue to go into the runoff elections in May and have the boost and benefit from Ken Paxton as being someone who is challenging the current moderate Republicans that are in our Texas Legislature,” she said. 

Paxton’s securities fraud case centered around accusations that he defrauded investors when he allegedly solicited them in a McKinney technology company, without disclosing that the firm was paying him to promote its stock. Okundaye said that legal action in other similar cases might amount to a fine and a civil lawsuit. 

“Securities fraud is going to encompass a wide variety of (crimes) such as a Ponzi scheme or insider trading,” she said. “It could also be encouraging people to invest in a fake company, or recruiting investors and telling them that a company is doing phenomenal, and in actuality, it’s doing pretty poorly.”

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Okundaye said she will be watching for how, with this trial no longer on the horizon, Paxton might use his new position to further his political career. One option would be for him to challenge John Cornyn for his U.S. Senate seat in 2026. 

“(That) could allow Paxton to make a larger name for himself outside of Texas and now be known throughout the United States,” she said. “What that may mean for Texas politics is now this allows that role of attorney general to now be open. This could now allow for somebody who may be aligned with Greg Abbott to be able to fill in that position of Attorney General in Texas.”

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