How Ken Paxton's securities fraud deal boosts both his GOP friends and Democratic enemies

By settling the securities fraud case that has dogged his entire tenure as Texas' attorney general, Ken Paxton on Tuesday shed a legal and political albatross that has swung from his neck for nine years, and immediately became a champion among his fellow Republicans and politically weaker in the minds of Democrats with two and half years left before the state's top attorney will have to face voters again.

"This is redemption for him politically, at least in the eyes of (his fellow) Republicans," University of Houston political science professor Brandon Rottinghaus told the American-Statesman on Tuesday after attorneys in a Harris County state District Court announced Paxton's pretrial intervention agreement.

The 18-month agreement, which comes with no admission of guilt by Paxton, would sweep away the securities fraud charges filed against him in 2015, if he meets the requirements of the deal, including serving 100 hours of community service, enrolling in 15 hours of legal ethics training and paying $271,000 in total restitution.

"Some members of the (Republican-led) House who supported his impeachment, are with reddened faces today, having to defend themselves against charges that they rushed through the impeachment when now these charges are falling by the wayside," Rottinghaus said.

And while his attorney emphatically told reporters that the settlement affirms Paxton's oft-repeated claim that he has committed no wrongdoing, the provision that requires the three-term Republican to pay $271,000 in total restitution to investors tied to the fraud allegations will stand as a tempting target for Democrats in any future election where Paxton's name is on the ballot.

Democrat: Paxton's money payout speaks volumes

A six-figure payout to end a legal case speaks much louder than a defendant's claim of innocence, said veteran Democratic operative Matt Angle.

"By agreeing to the terms of the confidential settlement," Angle said, Paxton "has admitted that he engaged in fraud and failed to register as an agent for security. And of course, he's getting a sweetheart deal. They're treating him like he's a teenager who smoked pot. He does community service, and his record expunged."

Paxton, whose third term ends in 2026, has not publicly indicated whether he plans to run for reelection. But he has expressed at least some interest in launching a primary challenge to U.S. Sen. John Cornyn, R-Texas, whose term also expires in the same election cycle.

More: Texas AG Ken Paxton to pay $271,000 in restitution to resolve securities fraud charges

Angle said that Paxton's pretrial intervention agreement — which came just two months after he said he would no longer contest the allegations made against him in an ongoing civil whistleblower case brought by several former top aides in the attorney general's office who accused him of abusing his office to help a campaign donor — should embolden would-be challengers in whatever race Paxton chooses to make next.

Paxton's legal difficulties made him the most vulnerable Republican holding statewide office in both the 2018 and 2022 election cycles, Angle said. Now, he added, Paxton's profile is much higher and Democratic donors will be much easier to persuade to underwrite a challenger.

"Ken Paxton is now a national villain," Angle said.

Paxton agreement likened to settling a nuisance lawsuit

Texas Republican operative Luke Twombly sees the equation much differently. He likened Paxton's deal to the settlement of a nuisance civil lawsuit in which a lump-sum payment is less expensive than ongoing litigation.

More: Will Texas AG Ken Paxton's securities fraud deal be public? Probably not. Here's why.

More telling, Twombly said, was Paxton beating the 20 impeachment charges, including bribery and abuse office, filed against him last year by the Texas House, which led to a trial in the Senate after which senators, largely along party lines, acquitted him of wrongdoing. Also notable was Paxton's near run-the-table defeat of many House Republican incumbents who voted to impeach him and of the three GOP members of the Texas Court of Criminal Appeals who blocked some of the attorney general's legal initiatives.

"He basically can say, 'I put it to bed. I didn't want a liberal witch hunt anymore,'" said Twombly, a former communications director for the Texas Republican Party. "I decided just to end the nonsense."

The GOP base won't hate Paxton; he has its full support, he said.

"Nationally, other Republicans like all these different lawsuits he brings against (Democratic President Joe) Biden. So as long as he keeps doing that, all sins can be forgiven," he said.

Would ordinary Texans get the same kind of deal?

Former Texas Democratic Party Executive Manny Garcia said Paxton's deal will be kept hidden from the public as long as he lives up to its terms, depriving voters of knowing how the attorney general responded to the fraud allegations that have been hanging over his head throughout his tenure as the state's top lawyer.

"Without the case getting underway (in a trial), there wasn't really a showcasing of any of the evidence," Garcia said. "In fact, Texans didn't even see the evidence, or at least some of significant parts of the evidence. His team has been doing a pretty expert job of delaying, dodging, not answering questions."

If Paxton is to ever face a political reckoning over the securities fraud indictments and the settlement that put it to rest, Garcia said, it will be because ordinary Texans understand they would not have had access to the same kind of deal if they were to face similar circumstances.

"The reality is, Texas's top law enforcement official (was able) to settle a case where he was facing 99 years in jail," Garcia said. "And there's something wrong with that system."

This article originally appeared on Austin American-Statesman: Ken Paxton settled his criminal case. What does it mean politically?