Texas attorney general pleads not guilty, seeks new attorney

Texas Attorney General Ken Paxton found himself looking for a new attorney Thursday after pleading not guilty to felony securities fraud charges in a Tarrant County courtroom.

Attorney Joe Kendall, who represented Paxton during his first court appearance on these charges, became the latest lawyer to withdraw, prompting some to wonder whether the changing legal representation is a strategy.

The state’s top attorney, a Republican, said after the hearing that he remains hard at work on behalf of Texans.

“I am innocent of these charges,” he said in a statement. “It is a travesty that some would attempt to hijack our system of justice to achieve political ends they could not accomplish at the ballot box.

“Regardless, I will continue to serve the people of Texas as Attorney General and continue to fight for the freedoms guaranteed under our Constitution.”

Dozens of people, mainly supporters and reporters, crowded into state District Judge George Gallagher’s Fort Worth courtroom to watch the latest phase of Paxton’s legal drama play out.

During a nearly 20-minute hearing, Paxton, who had asked to skip this initial court appearance, objected to issues ranging from cameras in the courtroom to the hearing’s location in Fort Worth rather than in Collin County, where he was indicted.

Paxton has been indicted on two first-degree felony counts of securities fraud and one third-degree count of failing to register with the State Securities Board.

He has until Sept. 3 to come up with legal representation, now that at least three lawyers have dropped off his team.

“This case has to be tried at some point,” said Kent Schaffer, one of two special prosecutors on the case.

Gov. Greg Abbott said this week that “everyone is innocent until proven guilty.”

But ​Democrats​ continued their call Thursday for Paxton to step down.

“This is yet another example of the Republican culture of corruption that festers within one-party rule,” said Manny Garcia, deputy executive director of the Texas Democratic Party, who attended the hearing. “Texans are now left wondering, ‘How can the attorney general of Texas act as the state’s chief law enforcement official when he himself is facing 99 years in jail for his crimes?’

“The trust between Paxton and the people of Texas has been broken.”

​Thursday’s hearing​

Paxton and his wife, Angela, walked into a standing-room-only courtroom on the eighth floor of the Tim Curry Criminal Justice Center shortly before the 10 a.m. hearing was scheduled to begin.

Paxton initially sat alone at his legal table, taking notes, until Kendall joined him.

Within minutes, Gallagher entered and began the hearing.

After making sure that Paxton’s plea remained “not guilty,” as was stated on court documents earlier in the week, Gallagher set Sept. 30 as the due date for motions to quash the indictments.

Prosecutors noted that more than 14,000 documents have been scanned onto CDs to give to the defense and that there are thousands more to go.

Gallagher laid out the ground rules for the case, noting that attorneys must follow state legal codes on statements to the media that could affect the case.

Kendall read a statement from Paxton that noted the attorney general’s objection to having hearings anywhere besides Collin County and asked that no cameras be allowed in court during the trial.

Gallagher, who agreed that the trial would be in Collin County, stressed that he will make the decisions in this case.

“This case needs to be tried in a courtroom, not in the press,” he said, adding that he will be the one to determine how to handle the media at any further hearings. “It is my decision on how that order will be done.”

And Kendall asked the judge to sign off on his departure from the case, citing “issues” that would complicate his continued involvement.

When Paxton was asked about changing lawyers, and began to answer while still seated, Gallagher said: “You need to stand, please.”

Paxton sounded unsure about who will represent him, although Dallas attorney Pete Schulte maintains that he is part of the team.

“I don’t know exactly who is the team,” he said, adding that Schulte may be on it.

Schaffer said he wasn’t surprised by anything that occurred during the hearing.

“Nothing happened today that was unpredicted,” he said.

Regarding Paxton’s request to bar cameras, he said the “public has a right to know what goes on in the courtroom.”

After court

On his way out of the courtroom, Paxton hugged supporters including Cathie Adams of the conservative Texas Eagle Forum and shook hands with state Rep. Bill Zedler, R-Arlington, and others.

More than a dozen people showed up to lend support to Paxton.

“We know him,” said Lynette McCracken, who traveled from Parker County for the hearing. “He’s a man of integrity.

“We wanted him to see us and know we are behind him.”

Zedler said: “This is a politically motivated prosecution. If he hadn’t won the attorney general’s race, this wouldn’t be happening.”

Adams backed Paxton’s request for a camera-free courtroom.

“The U.S. Supreme Court doesn’t have cameras and, actually, I think it was very succinctly stated in the plea, which was, ‘We want this trial to happen in the courtroom and not the media,’” she said.

Garcia said it’s a concern that Paxton doesn’t want transparency at the trial.

“This is a long track record of Ken Paxton requesting the white-collar treatment,” he said.

At issue

A Collin County grand jury indicted Paxton last month on charges that he violated Texas securities laws.

The indictments allege that Paxton offered to sell more than $100,000 in Servergy Inc. stock to state Rep. Byron Cook, R-Corsicana, and Florida businessman Joel Hochberg without disclosing that he was paid in company stock and didn’t invest his own money in the McKinney-based stock.

The alleged violations took place in July 2011, when Paxton served in the Texas House. The first-degree felonies carry a fine of up to $10,000 and a sentence of five to 99 years in prison.

Another charge, which alleges that Paxton failed to register as an investment adviser or representative with the State Securities Board, carries a fine of up to $10,000 and a sentence of two to 10 years in prison.

Last year, Paxton admitted to soliciting clients without being registered. He paid a fine and was reprimanded by the board.

“No one is surprised that Paxton has been dragged into criminal court to enter a plea on felony charges that could send him to the state penitentiary,” said Matt Angle, founder and director of the Lone Star Project, a Democratic political action committee.

“Ken Paxton is a corruption dumpster fire who faces clear evidence gathered by Texas Rangers that he cheated and swindled colleagues and clients out of hundreds of thousands of dollars.”

Paxton is not required to leave office because of the trial. If convicted, he would no longer be able to serve as attorney general.

This story was originally published August 27, 2015 at 9:55 AM with the headline "Texas attorney general pleads not guilty, seeks new attorney."