Top state criminal court stands by its decision on fees in fraud case against Paxton

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Ken Paxton, Angela Paxton (Melissa Phillip/Houston Chronicle via AP)

The Texas Court of Criminal Appeals has declined to reconsider its November decision regarding overpayment of special prosecutors in a securities fraud case against Texas Attorney General Ken Paxton. The decision could profoundly affect the case, which has yet to go to trial after four years.

In a June 19 letter to the Collin County district court where the case originated, the appeals court provided no reasoning for its decision not to reconsider the appeal of special prosecutor Brian Wice for hundreds of thousands of dollars in legal fees — a rate far in excess of a fee schedule set by the district court.

Should Wice choose to continue his pursuit of the additional fees, he will do it in the Harris County district court to which Paxton’s case was moved, one of the many unusual turns in the case that The Texas Monitor has reported on over the past three years.

Whether Wice and his prosecution team will proceed at all is undecided. Wice has hinted to the press that unless the team is paid at the $300-an-hour rate set by a Collin County trial judge in 2016 they will drop the case.

Wice did not address the securities fraud case in a statement he issued to reporters on Wednesday. “We’re disappointed that the court took six months to summarily deny our motion for rehearing without addressing any of the substantial legal issues it raised, something it routinely criticizes the courts of appeals for doing,” Wice wrote. He did not answer any questions.

In an email, Paxton’s staff said that the attorney general and his office would have no comment.

Prosecutors had already been paid $275,000 when attorney Edward Greim filed a lawsuit on behalf of Paxton political donor Jeff Blackard in December 2015 to block further payments.

Greim argued that the payments and the entire prosecution of Paxton are fundamentally unfair because the attorney general was being treated differently than an “ordinary criminal defendant.”

A $205,000 invoice for legal fees submitted by Wice and the two other special prosecutors has gone unpaid.

No date has been set for the main criminal case, which has proceeded in fits and starts since May 2014, when the Texas State Securities Board fined Paxton $1,000 for soliciting investors without being registered with the state. Paxton signed a disciplinary order and paid the fine.

A Collin County grand jury indicted Paxton seven months after he took office, based on documents that The Texas Monitor established had been falsified and back-dated. Legal filings in the case suggest a political falling out between Paxton, a former Texas House and Senate member, and former Republican House member Byron Cook, as motivation for the grand jury indictment.

Collin County District Attorney Greg Willis recused himself from the case, he said, because he didn’t want to invite claims of corruption for prosecuting a sitting state attorney general. His recusal opened the door for the hiring of a team of special prosecutors.

Collin County District Judge George Gallagher, who originally agreed to the special prosecution team’s hourly legal fee rate of $300, ordered the case moved to Harris County, citing possible political conflicts between Collin County commissioners and Paxton supporters. It was that rate which was blocked by the appeals court.

The change of venue, as The Texas Monitor reported, raised as many questions of impartiality in the case as it answered.

In March 2017, a U.S. district judge dismissed federal charges of securities fraud against Paxton. The case in Harris County continued but has been delayed while the question of special prosecutor pay was litigated.

The appeals court in November had nothing to say about the fees requested by Wice, except to cite state law prohibiting courts from exceeding fee limits set by county commissioners. Collin County’s cap is $2,000, up to $1,000 for pretrial work and up to $1,000 for any added expenses for each attorney in each case.

The legislature followed the court’s ruling with Senate Bill 341, effective June 10, which will bar district courts from hiring private attorneys to serve as special prosecutors. Only attorneys employed by district and county attorney offices can be assigned, according to the law, introduced by state Sen. Joan Huffman, R-Houston.

During the session Huffman did not mention the Paxton case directly but said, according to the Houston Chronicle, “I’m hopeful this clarification in law will provide further benefit to counties because there has been significant cost to counties over the years when these situations have arisen.”

Shannon Edmonds, a spokesman for the Texas District and County Attorneys Association, told the Chronicle that Huffman’s bill will prevent counties from getting stuck with the bill in cases like this, where “These particular lawyers have decided that they want to litigate this issue to its bitter end, and as a result, the case itself is not being prosecuted in a timely manner.”

“It’s dragged on way too long,” Edmonds said.

Mark Lisheron can be reached at [email protected].

 

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