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Texas Attorney General Ken Paxton fought for years to protect his allies from questions about his alleged corruption. Now, they may have to testify under oath about the accusations, according to a new federal court ruling.
A state agency recently asked the U.S. Fifth Circuit Court of Appeals to halt grand jury testimony in a case involving “alleged criminal wrongdoing by senior Agency personnel.” On June 20, the court filed its decision. Agency employees could not avoid testifying if a crime was potentially committed, the decision read.
The court was careful not to name the state agency or any specific individuals.
But several clues in the decision point to the Paxton case. The FBI launched an investigation into Paxton in 2020 for allegedly abusing his power to help a campaign donor named Nate Paul. Among the accusations were bribery, obstruction of justice and more.
In its decision, the appeals court noted that two senior agency employees have been ordered to appear in front of a federal grand jury on July 2. The employees are also unnamed.
Jeff Ansley, a former federal prosecutor, says this is a strong indication the feds intend to file charges — and soon. If so, they will present their case to a federal grand jury, which will decide whether to indict.
“You present these types of witnesses, these apex witnesses, at the end of your [investigation] or certainly near the end,” said Ansley.
Paxton has weathered multiple scandals since taking statewide office in 2015. But the corruption allegations involving Nate Paul have been the most serious. They were the basis for Paxton’s impeachment last year, which he beat, and a whistleblower lawsuit that is still pending against his agency.
Paul, an Austin-based developer, was charged last year with federal financial crimes unrelated to Paxton’s case. His trial is scheduled for 2025.
In the whistleblower lawsuit, the attorney general’s office has argued its employees should not be forced to speak to the corruption allegations against Paxton because doing so would reveal private discussions.
But the federal appeals court was not convinced that state employees should be shielded from testifying in public corruption cases.
That’s because attorney-client privilege does not apply when a public official is accused of a crime, the judges said. The “‘seal of secrecy’ between lawyer and client does not extend to communications ‘made for the purpose of getting advice for the commission of a fraud’ or crime,” they wrote.
The appeals court ruled against the agency and sided with a lower federal court that said the grand jury proceedings should continue.
“The Agency seeks to override the district court’s May 2024 order allowing grand jury testimony to proceed as outlined in the court’s prior orders. Because the Agency fails to show a clear and indisputable right to relief, the Agency’s petition fails,” the decision read. “The Agency’s emergency motion to stay grand jury proceedings currently set for early July — which rises and falls with its mandamus petition — necessarily fails for the same reason.”
All three judges who wrote the decision were nominated by Republican presidents. Cory T. Wilson was tapped by Donald Trump. Jerry E. Smith and Leslie Southwick were nominated by Ronald Reagan and George W. Bush, respectively.
While the state agency in question is unnamed, the Paxton investigation is referenced throughout.
The decision quotes two sentences from the conclusion of an October 2020 district court ruling. That identical language was also referenced in a sealed grand jury document in the Paxton case that The Texas Newsroom published earlier this month.
It also mentions four types of evidence federal agents from the agency. The fourth type of evidence was any attempt to “interfere in or obstruct the current Federal investigation.” That is identical to language in the sealed grand jury document in the Paxton case.
The agency in question could still try to halt the grand jury testimony.
Paxton’s personal lawyers, campaign contacts and agency spokespeople did not reply to a request for comment on Thursday. Federal authorities did not immediately comment.
In addition to the FBI investigation and whistleblower lawsuit, Paxton and his top deputy are being sued by a disciplinary committee of the State Bar of Texas for their role in challenging the results of the 2020 presidential election.
In March, Paxton cut a deal with prosecutors to avoid going on trial for securities fraud. He will have to pay restitution and perform community service.
