Harris County judge sides with Ken Paxton’s prosecutors over pay dispute in securities fraud case

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A Harris County district judge has sided with the special prosecutors handling Ken Paxton’s securities fraud case in their years-long effort to get paid.

The judge, Andrea Beall, ruled Tuesday that the prosecutors, Brian Wice and Kent Schaffer, are owed the $300-an-hour rate by Collin County that they were promised when they started on the case in 2015. They have not gotten paid since January 2016 after Collin County — the original venue for the case and Paxton's home county — balked at the payment schedule, prompting years of legal wrangling over it.

The prosecutors included Beall’s ruling — made under seal — in a new filing with the Texas Court of Criminal Appeals. The prosecutors are asking the court to force Collin County to pay them — and to prohibit the county from "taking any further action calculated to thwart" payment.

The fight only involves payment for work the prosecutors performed in 2016, but Beall's order sets an important precedent for their compensation beyond that.

The pay dispute was one of the last remaining issues to settle before Paxton goes to trial in the case. The trial is set to start April 15, 2024.

“Judge Beall’s well reasoned decision clearly falls within the zone of her inherent and virtually unlimited judicial discretion,” Wice and Schaffer said in a statement. "We’re confident that the Court of Criminal Appeals will enforce her lawful order with all deliberate speed and finally put an end to Collin County’s incessant, transparent, and purely political ploy to derail Ken Paxton’s prosecution by defunding it."

Paxton’s lawyers argued Thursday that the prosecutors are trying to further delay the trial.

“Once again, the Special Prosecutors are making clear that their prosecution of Ken Paxton is all about money and not justice,” Paxton’s lead lawyers, Philip Hilder and Dan Cogdell, said in a statement. They added Paxton “just wants his day in court” and, “Yet, the Special Prosecutors seem content pushing that day further back with its dilatory sideshow of an appeal.”

The case is now over eight years old, delayed by pretrial disputes including the pay issue and the venue.

Paxton was indicted on the charges months into his first term in 2015. They center on allegations that he tried to solicit investors in a McKinney technology company without disclosing that it was paying him to promote its stock.

Paxton has pleaded not guilty to two counts of securities fraud, a first-degree felony, and one count of failing to register with state securities regulators, a third-degree felony. He faces up to 99 years in prison if convicted.

Paxton was acquitted in September in an impeachment trial in the Texas Senate that related to different allegations of abuse of office. The articles of impeachment, approved by the House in May, included charges related to the securities fraud case, but the Senate set them aside for the trial and dismissed them after the verdict on the other articles.

In the securities fraud charges, the battle over prosecutor pay goes back to the early months of the case, when a Paxton supporter filed a lawsuit challenging the fee schedule. Despite that, Collin County commissioners agreed to pay the prosecutors for the first time in January 2016, signing off on a $242,000 invoice.

Over a year later, though, with the lawsuit still looming, commissioners voted against paying prosecutors for their next invoice, covering work done in 2016.

In 2018, the Texas Court of Criminal Appeals struck down the prosecutors’ pay schedule and told the trial court judge to “issue a new order for payment of fees” consistent with a state statute governing compensation for court-appointed attorneys. Wice and Schaffer have argued that statute is unconstitutional as it applies to them.

Despite the 2018 ruling, the trial court judge at the time declined to take action on the prosecutors’ pay, and the issue continued to linger.

In her Tuesday order, Beall declined to find the state statute unconstitutional but said local rules in Collin County were unreasonable and illegal. She ordered the prosecutors to be paid for their 2016 work at the original rate of $300 an hour.

Beall handled the decision ex parte, meaning it was done without the input of the opposing party. Paxton's lawyers made clear at a Monday hearing they disapproved of that, trying to offer their own proposed order addressing the prosecutors' pay.

Meanwhile, Collin County appears no more inclined to authorize the payment, even after Beall's order Tuesday.

"Good luck with that," Collin County Judge Chris Hill tweeted Tuesday evening.