Court ruling suggests recent activity in federal investigation of Ken Paxton

By Jasper Scherer, The Texas Tribune Sign up for The Brief, The Texas Tribune’s daily newsletter that keeps readers up to speed on the most essential Texas news. A federal appeals court last week rejected an unnamed Texas agency’s attempt to withhold records and shield its employees from appearing before a grand jury in a federal investigation that appears to be targeting Attorney General Ken Paxton. The ruling appears to be the first major sign that federal officials are still investigating Paxton after he was impeached and subsequently acquitted by the Legislature last year over charges of bribery and abuse of office. In a June 20 opinion, the federal Fifth Circuit Court of Appeals sided with a decision from the lower Western District of Texas, which found that the state agency could not use attorney-client privilege to withhold evidence from a Department of Justice inquiry into “alleged wrongdoing by senior Agency personnel.” The appeals court also cleared the way for two senior agency employees to testify before a grand jury on July 2. The opinion does not identify the agency. But it refers to a years-long FBI investigation and notes dates and details that line up with a sealed federal case probing allegations from Paxton’s former top deputies. In October 2020, those deputies reported to federal authorities that the attorney general allegedly took bribes to benefit a friend and political donor, Austin real estate developer Nate Paul. The case at issue in the Fifth Circuit opinion also remains sealed. But the opinion refers to earlier orders that seem to align with those issued in Paxton’s case, including an August 2021 decision that largely refused the agency’s attempt to limit the scope of the investigation. Last month, the Texas Newsroom published an August 2021 order from U.S. District Court Judge David Ezra, of the Western District, that appears to be the same one referenced in the Fifth Circuit’s latest opinion. For example, the 2021 Western District ruling notes that investigators in Paxton’s case were allowed to take “additional investigative steps” to seek “four categories of information,” including any “actions or communications contemplated or undertaken” by Paxton or his senior staff to “interfere in or obstruct” the federal investigation. The Fifth Circuit’s opinion refers to the same language, including the same “four categories of information.” Paxton’s office did not immediately respond to a request for comment. Ezra’s 2021 order states that the grand jury investigation “concerns Paxton’s alleged use of his official position and power” to benefit Paul, “as well as Paxton's purported efforts to thwart” the probe. The order also says federal officials are looking into “several potential federal crimes involving Ken Paxton,” including obstruction of justice, retaliation against witnesses, bribery, honest services wire fraud, and “conspiracy to commit the four aforementioned offenses.” The Fifth Circuit opinion, penned by Trump-appointed judge Cory T. Wilson, notes that federal officials are still looking into any moves by the agency to “interfere in or obstruct” the federal investigation. Such communications, Wilson wrote, are not covered by the usual “seal of secrecy” between lawyer and client. Wilson’s opinion also states that the lower court has “reiterated several times” that it agrees with Justice Department officials who contend there is “reason to believe that evidence of federal crimes alleged in [DOJ’s] motion is in the possession, custody, or control of current and former employees” of the state agency. Wilson, in his opinion, wrote, “we cannot say that the district court erred in its determination on this point.” This article originally appeared in The Texas Tribune. The Texas Tribune is a member-supported, nonpartisan newsroom informing and engaging Texans on state politics and policy. Learn more at texastribune.org. Campaign Action