At Hearing, Paxton Lawyers Take Issue with Grand Jury Makeup

Lawyers for Attorney General Ken Paxton on Thursday tried to cast doubt on the makeup of the grand jury that indicted him. They're hoping to overturn a lower court’s decision not to dismiss the securities fraud charges against him.

Texas Attorney General Ken Paxton, accompanied by his wife, Angela, left, speaks to the media after leaving the Fifth Court of Appeals on May 12, 2016 in Dallas.

* Editor's note: This story has been updated to include comments from Lt. Gov. Dan Patrick.

DALLAS — Lawyers for Attorney General Ken Paxton on Thursday tried to cast doubt on the makeup of the grand jury that indicted him. They're hoping to overturn a lower court’s decision not to dismiss the securities fraud charges against him.

Much of the discussion at the Dallas-based 5th Court of Appeals centered on the composition of the Collin County grand jury that indicted Paxton on state charges nearly a year ago, setting up a legal drama that led to federal charges earlier this year. Paxton has pleaded not guilty to the state charges, which allege he misled investors in a company in which he had personal dealings before he became the state’s top law enforcement official.  

Paxton’s lawyers argued Thursday morning that the the appeals court should reverse last year's decision by Collin County District Judge George Gallagher not to end the case against Paxton before trial. Paxton lawyer Bill Mateja told the 5th Court of Appeals that the grand jury that indicted Paxton was not sufficiently random, the result of a judge who allegedly gave prospective jurors too much leeway in removing themselves from the process.

“Quite simply, the court did not follow the rules,” Mateja said, later acknowledging that if the grand jury were voided, it would affect every case it heard, not just Paxton’s. “It is better to nip this in the bud now than allow this to fester.”

Special prosecutor Brian Wice countered that there was nothing improper about how the jury was put together, saying Collin County District Judge Chris Older, who oversaw that process, “had inherent discretion” and “acted in good faith.” Even if the jury’s composition was less than random, Wice said, Paxton’s lawyers have so far failed to show how it harmed them.

Quite simply, the court did not follow the rules.— Bill Mateja, attorney for AG Ken Paxton

 

There was also discord on Thursday over how state and federal law define an investment adviser, the role Paxton was effectively playing in the business dealings at the heart of the case. Mateja argued the federal definition of the term “trumps” the state’s definition, while Wice argued that no such pre-emption exists.

In August 2015, a Collin County grand jury indicted Paxton on two counts of first-degree felony securities fraud and one count of a third-degree felony stemming from his failure to register as an investment adviser. The U.S. Securities and Exchange Commission brought similar charges against Paxton last month.

From the beginning, Paxton’s lawyers have zeroed in on the integrity of the grand jury selection process, especially the conduct of Oldner. The judge recused himself shortly after Paxton was indicted.

Paxton, who has kept a low profile throughout the case but has become more vocal in recent weeks, made brief remarks to reporters after the hearing.

“These are false charges, and we will prevail,” Paxton said. “Meanwhile, I’m going to continue my job as attorney general, the job that the people of Texas elected me to do.”

It could take weeks or months for the court to issue an opinion, which Chief Justice Carolyn Wright said will come “in due course.” After the hearing, both sides said they expected the court to reach a decision on an expedited timeline.

The significance of the hearing was highlighted by the court’s decision to hear it en banc, or before a nine-judge panel instead of the usual three. Both sides went well over their allotted time Thursday as they fielded questions from the judges, many of them curious about arguments related to the composition of the grand jury.

The hearing came the morning after Paxton released a video in which he provided his most extensive remarks yet on the case. Calling it politically motivated, he suggested he was being targeted for his Christian faith, and by those still upset with the outcome of the 2014 attorney general’s race.

Speaking with reporters after the hearing, Mateja declined to comment on the video, but hinted its claims could be relevant at some point. “There are things yet to come, and you’re going to have to wait,” Mateja told reporters.

Later Thursday, at the Texas GOP convention in downtown Dallas, Lt. Gov. Dan Patrick did not offer Paxton much support when reporters asked about the day's legal proceedings. 

“I wasn’t in court. I was here giving a speech," he said. "I don’t know the facts. That will play itself out. Those are decisions he makes."

"My job is to hold the office of lieutenant governor," he added. "I don’t know the facts of the case, one way or the other. I haven’t gotten involved in it. It plays itself out."  

Additional reporting by Abby Livingston.