The Madness of Criminalized Politics

Professional liars sometimes get so carried away with their arguments that they don’t realize they’ve started to tell the truth.

That’s what happened last week when the private attorneys who have been prosecuting Texas Attorney General Ken Paxton on the flimsiest of securities fraud charges basically admitted that their whole case is “absurd.”

It’s taken a minute for folks to realize this. Nobody wants to rush to the aid of somebody who might turn out to be a crook, but we’re now in year three of the Paxton prosecution, and those attorneys have yet to introduce or even hint at the existence of any evidence at all that Paxton ever misled anybody. We’ve got a fraud case, in other words, with no fraud.

Ostensibly, the case is about a group of investors who put money into a startup that flopped, and then got mad at Paxton when they learned he hadn’t put any money into the company he had recommended. But those investors admitted to law enforcement, in records I’ve reported on, that they had just assumed Paxton was investing in the company. The fraud, such as it were, is that Paxton failed to disabuse them of a mistaken assumption that they never discussed with him by, I don’t know, using the Force or something. For that, the state is trying to imprison him for 99 years,

The Securities and Exchange Commission brought a civil action over the same matter, and a federal judge tossed it at the first opportunity, finding that the SEC’s idea of law-breaking was flat wrong even if all their factual allegations could be proven correct.

Last month, National Review and the Wall Street Journal editorial board both denounced the case, correctly identifying it as yet another example of a 25-year trend in Texas of criminalizing politics. Most of these political prosecutions have originated from the District Attorney’s office in heavily Democratic Travis County, which until recently had jurisdiction over public corruption cases involving state officials.

This one, however, comes out of Collin County, a Republican stronghold just north of Dallas. That’s the part, I think, that gave outsiders pause. Why would a Republican judge in a Republican county try to have a Republican official indicted in bad faith?

Now, that’s not a question one has to answer before coming to an opinion on the merits of the case, and both publications based their arguments on the obvious legal and factual defects in the case. But it does have an answer, and it has to do with Lord Acton’s famous line about absolute power corrupting absolutely.

In jurisdictions like Travis and Collin counties, where elected officials have nothing to fear from the opposition party, they often succumb to the temptation to abuse their power.

The Dallas Observer has chronicled how one powerful Collin County district attorney turned his office and the grand jury system against defense attorneys, clerks, even judges who didn’t do his bidding. My own interviews with county officials and attorneys have convinced me that those intra-party factions are still very real.

The Observer described the dynamic a few years ago:

The conservative Republican electorate gives so much deference to those upholding the law that prosecutors start believing they can use their power to investigate and accuse to settle scores with no political risk.

In that atmosphere, what one lawyer called “chicken-s*** offenses” can be blown up to felonies and enemies run over by the heavy wheels of criminal indictment, even if a conviction never results.

This crew tried to an indict a sitting judge on corruption charges by alleging, without a shred of evidence, that his willingness to appoint defense attorneys for defendants was actually an enrichment scheme. They got another judge convicted on a quid pro quo bribery charge, later reversed on the grounds that the judge had neither received any benefit nor done any favor for the other party. Small detail.

This is the machine that grabbed ahold of Paxton. During his campaign for Attorney General in 2014, his opponents lodged complaints against him with the state Securities Board alleging he had failed to register as an “investment adviser.”

At the time, Paxton was an attorney practicing in wills, trusts, and probate, and he would from time to time refer clients to an investment manager. Paxton had for a time registered with the Securities Board out of caution, but he shouldn’t have had to worry. He didn’t actually advise anyone on investments; the firm to which he referred people was registered with the SEC, superseding state registration requirements; and state law specifically exempts attorneys from the requirement if “performance of the services is solely incidental to the practice of the person’s profession.” If an estates lawyer doesn’t qualify, who would?

Still, it was just a registration violation, a matter of some incorrect paperwork, at worst. Securities officials said they had never prosecuted anyone on the charge unless it was part of some grand, fraudulent scheme. With no inkling of what his opponents had in mind, Paxton simply admitted to it and paid a $1,000 fine.

That was not the end of it. After an irregular investigation that bounced from office from to office, and went from one unimpressed grand jury to another, the special (private) prosecutors managed to obtain an indictment, with the help of a judge barging into the grand jury room, just after the three-year statute of limitations elapsed. The referral was in June 2012, the indictment in July 2015.

So there’s the whole case: inadequate mind-reading and some doubletalk about paperwork.

Needless to say, there are few district attorney’s offices around that would invest serious resources in pursuing a case like this. But the Collin County DA, Greg Willis, is a close friend of Paxton’s — actually, he’s the same man the machine tried to indict for appointing defense attorneys. Willis recused himself, and the machine brought in three high-dollar attorneys from Houston — Brian Wice, Kent Schaffer, and Nicole DeBorde — to serve as special prosecutors. One of them, incidentally, is so closely associated with the Bandidos motorcycle gang that he was named an unindicted co-conspirator in a federal racketeering case.

The court agreed to pay these lawyers $300 an hour, despite local rules and state law that set a maximum fee of $3,000 for cases like this. By comparison, court-appointed attorneys in capital murder cases are limited to $150 an hour. After the lawyers billed nearly $600,000 on the case, county officials challenged the deal in court, and last month, an appellate court invalidated the entire arrangement.

Actually, it was the second time the appeals court had to issue an order to the trial court telling it to follow the law. The other mandamus action came after the trial judge transferred venue from Republican Collin County halfway across the state to Democratic Harris County to give the prosecutors a fairer trial, on the grounds that some of us critics might have convinced potential jurors of Paxton’s innocence. The transfer was fine under an archaic bit of Texas code, apparently, but the appeals court had to order the judge to let the case go after the judge insisted he would come down to Houston to continue presiding over it himself.

If all this strikes you as absurd, you’re not alone. Wice and Schaffer have spent two years building a case out of little more than movie references and strangely archaic insults. (Yours truly is a “tub-thumper” for Paxton, according to their court filings.) Whatever the quality of their arguments, they say it should be obvious that two years of fancy lawyering ought to be worth more than $3,000.

In a petition to the state high court filed last week, Wice argues that the appeals court decision that they should only be paid $3,000 “leads to absurd results the Legislature could not have intended” when it passed a law stating that special prosecutors “receive compensation in the same amount and manner as an attorney appointed to represent an indigent person.”

They should be paid, Wice argues, “for the over two years of intensive work they have performed in a case that is complex, time-consuming, and high profile.”

I agree. It is, as he says, absurd to do that much lawyering that nobody asked of you. If you’re in charge of putting together a grade-school musical, you don’t invite Pavarotti to sing Vesti la Giubba, and then complain that the parent-teacher association can’t pay him. If you’ve got a jaywalking case, you don’t hire Johnnie Cochrane and the Dream Team.

The whole business reminds me of a great quote from John Cleese I came across the other day.

“A sense of humor is actually a sense of proportion,” he said. “It’s the sense of knowing what’s important.”

Here we’ve got an offense that ranks somewhere in the sub-jaywalking echelon. And we’ve got merciless villains trying to get rich by destroying a man over it.

There’s a lot of comic tension in that setup. But nobody is laughing just yet.

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