A World-Class Scandal Snowballs on Paxton

Ken Paxton (Photo by John Anderson)

It makes some sense that ambitious, provocative, ethically questionable, and now embattled Texas Attorney General Ken Pax­ton would vibe well with ambitious, provocative, ethically questionable, and now embattled Austin real estate mogul Nate Paul. Just how well – and at what cost to the people of Texas – is now the subject of many, many questions, after an extraordinary mutiny last week within the A.G.'s Office.

As first reported by Tony Plohetski of the Austin American-Statesman and KVUE, seven of Pax­ton's top executives, including First Assistant Attorney General Jeff Mateer, informed the A.G. and agency on Sept. 30 that they had made a criminal complaint to "appropriate" law enforcement about Paxton's activities, including allegations of bribery and abuse of office. In doing so, they protected themselves under the state whistleblower statute (which also uses the term "appropriate") from retaliation by Paxton, though Mateer resigned on Friday. Later in the week, the Houston Chronicle reported on a text exchange between Mateer and Paxton that introduced Paul's name into the now-snowballing story.

Paxton has said that he knows Paul but has not described their relationship in detail as of press time; Paul has refused comment on the case. But the revelation added some context to curious events in one of the numerous legal matters facing Paul, whose World Class Holdings property empire has been unraveling in a chain of bankruptcies and whose home and offices were raided last year by the FBI. As has been reported most thoroughly by the Austin Business Journal, the Mitte Foundation, a modest but long-lived Austin philanthropy, had partnered with Paul on two of his Downtown deals and sued to protect its stakes as Paul's fortunes crumbled. After months of stonewalling by Paul's teams of many lawyers, and some adverse rulings and scoldings from the judge, the A.G.'s Office jumped into the case to help him – justified by Paxton as part of his agency's regulation of Texas charities, but confusing to everyone else. However, at a late September hearing on motions it had itself filed, Paxton's team announced it was walking away from the case.

Meanwhile, Paul had blustered for months about misconduct by the federal and state agents who raided his spots in 2019, and filed a complaint with the Travis County District Attorney's Office, which bounced it over to the A.G. Mateer and the other A.G. topsiders blew their whistle after learning that not only had Paxton appointed a special outside investigator – Houston attorney Brandon Cammack – to probe Paul's allegations, but that Cammack had issued grand jury subpoenas to figures in the case (which the A.G. Seven hurriedly got quashed). This week, Cammack told the Dallas Morning News he was proceeding with his inquiry and still had a contract with the A.G.'s Office.

Paxton, like Paul, believes the best defense is a good offense, and his own statements have implied that the A.G. Seven have gone rogue (perhaps taking part in, or covering up, the plot against Paul) and fear being exposed. This is hard for many GOP allies to swallow; the Seven are more respected as attorneys and administrators than is Paxton, whose energetic right-wing crusades take up more of his attention than does actually running the agency. Mateer has strong wing nut bona fides of his own – he turned out to be too far-­right to be confirmed as a Trump judge – and was hand-picked by Paxton to be his No. 2. Mateer's predecessor at the A.G., now-U.S. Rep. Chip Roy, was the first GOP leader to join pretty much every Democrat in Texas and call for Paxton to resign. Gov. Greg Abbott – who, as A.G. before Paxton, managed to avoid major scandals and internal rebellions – and Lt. Gov. Dan Patrick both called the allegations "very concerning." Both men, and Roy and other GOP electeds, announced they'd return campaign contributions made by Paul, who also donated $25,000 to Paxton's reelection campaign in 2018,

By the way, this is all unrelated, we think, to the felony securities-fraud charges on which Paxton was indicted way back in 2015, for which he has been dodging trial for five years through all means at his disposal, and which have spawned yet more accusations of misconduct.