Texas AG Ken Paxton to pay $300,000 to stay out of federal court

Texas Attorney General Ken Paxton (R) will have to pay just under $300,000 in a deal that keeps him out of federal court.

The deal — which also requires the attorney general to perform 100 hours of community service and take continuing legal education classes — allows Paxton to avoid a trial for securities fraud, for which he could have faced life in prison.

The pretrial agreement — which the Paxton camp said federal prosecutors instigated — left longtime observers scratching their heads.

“Top of mind: why would prosecutors cut a deal now, [two] weeks before trial,” Lauren McGaughy, a political reporter for Austin’s local NPR station KUT, wrote on X, the platform formerly known as Twitter.

The Department of Justice has provided little clarity on the resolution to the case, which has dragged on for nine years since Collin County prosecutors in 2015 indicted Paxton — who was then a state legislator — for soliciting investments in a server company, Servergy, without disclosing that he was on the company payroll.

A federal court ruled in 2017 that Servergy founder William Mapp III was guilty of lying to investors about the company’s technology, which he had claimed allowed it to run server farms far more efficiently than competitors.

Mapp was fired by Servergy, was ordered to pay $22,500 and ultimately had to take work as an Uber driver to make ends meet.

Paxton has fared better. As the federal case over his actions at Servergy dragged on over nearly a decade — through fights over a trial venue, back pay and whether the case itself was taking too long — Paxton won election to the state attorney’s office, where he established himself as a dogged prosecutor entrenched in the furthermost right flank of the country’s culture wars.

Just in the last few months, he has attacked online pornography, cities that decriminalized marijuana, gender-affirming care for LGBTQ youth and nonprofits that tend to migrants released from federal custody while their cases process — while also leading the conservative campaign against tech monopolies and Biden administration clean energy goals.

The decision Tuesday morning was widely reported as another unexpected victory for the state attorney. It follows his acquittal last summer in a polarizing impeachment trial — and the victory earlier this month of a slate of insurgent candidates he backed against Republican incumbents in Texas who had sought his ouster.

Paxton was “happy to agree to the terms of the dismissal,” his attorney Dan Cogdell told The Texas Tribune of the deal.

Cogdell emphasized that despite the fine and community service, Paxton had not been required to admit to any wrongdoing.

But however happy Paxton is to avoid trial, the financial penalty is steep: nearly double the attorney general’s $153,750 salary. If he is unable to pay it or violates the other terms of his deal, jury selection for the trial will start anew.

It also is far from the end of his legal troubles. Paxton still faces a civil suit from four conservative members of his state office whom he allegedly fired for reporting him to the FBI — a case he has long fought and so far successfully avoided publicly testifying in.

He also faces an ongoing investigation by the FBI over the same charges for which he was indicted.