Texas attorney general pleads not guilty to securities fraud

AP News
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Posted: Aug 27, 2015 2:43 PM
Texas attorney general pleads not guilty to securities fraud

FORT WORTH, Texas (AP) — Texas' attorney general, Ken Paxton, pleaded not guilty to securities fraud charges Thursday during a hearing in which he asked the judge to bar cameras from future proceedings and his high-powered lawyer resigned.

Texas' top law enforcement officer, who says he will not resign from the office he assumed in January, didn't comment as he left the Fort Worth courthouse with his wife after the hearing. Tea party activists who came in support called Paxton the victim of political conspiracy, while Democrats accused him of demanding special treatment.

Paxton is charged with two counts of securities fraud over allegations that he deceived investors in a tech startup that compensated him for reeling in new shareholders. The alleged deception happened in 2011, when Paxton was a state legislator, and a fellow Republican legislator is among those he is accused of deceiving.

Paxton's attorney, former federal judge Joe Kendall, unexpectedly announced during the hearing that he would no longer represent Paxton. In a motion filed with the court, Kendall wrote that recent differences had "adversely" impacted his relationship with Paxton and made any continued work "untenable."

When Paxton began to explain from his seat his attorney situation, Judge George Gallagher interrupted Texas' top lawyer.

"You need to stand, please," Gallagher said.

Paxton said he intends to have a new attorney by next week. Two special prosecutors appointed to the case did not object, but one noted that Paxton has now gone through three attorneys in three months and that he was wary of possible stall tactics.

"This case has to be tried at some point," said Kent Schaffer, a Houston attorney and one of the special prosecutors.

Paxton seldom spoke in court, but he had Kendall tell the judge he would fight any effort to move the case out of Collin County, where he is from, and ask that no cameras be allowed at future proceedings. Gallagher, who allowed a TV station to broadcast Thursday's hearing live, reminded Paxton that he, the judge, would decide whether to allow cameras.

When Paxton was booked on the charges earlier this month, he was allowed to skirt a longstanding jail requirement that suspects wear a white towel around their shoulders in booking photos. Critics said this amounted to special treatment.

"He continues to operate that Ken Paxton has rules for himself, but everyone else has to operate under a different set of rules," Texas Democratic Party Director Manny Garcia said.

Gov. Greg Abbott and other top Texas Republicans haven't publicly rallied behind Paxton, though one GOP state lawmaker was in court to watch the proceedings.

Paxton is one of two state attorneys general in the U.S. who are staying in office while fighting criminal charges. Pennsylvania Democrat Kathleen Kane is accused of leaking grand jury information.

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