August 27, 2023      12:41 PM
Coppedge: The Elephant and the Ham Sandwich in the Room
“In light of Paxton's numerous public admissions and his sworn agreement to the securities board order, in this case, it would be easier for the ham sandwich to escape indictment than Paxton.”
This prescient story on Ken Paxton's self inflicted problems first appeared on May 19, 2014
(John Coppedge, M.D., a key player in
Texas judicial races writes occasional columns for QR. He is among a handful of
folks most responsible for GOP domination of Texas appellate courts. Rather than judicial races, today he turns
his attention to the continuing criminal liability faced by one Republican
runoff candidate for Attorney General…HK)
The Republican Primary Runoff for Texas
Attorney General is problematic for Republican voters and for the Republican
Party of Texas. One candidate is
asking Republicans to vote for him despite admitting that he recently admitted
acts that under the State Securities Act are a felony -- and his possible criminal
prosecution for that felony has yet to be addressed.
That candidate is Ken Paxton who less than three weeks ago agreed to and signed a Disciplinary
Order of Reprimand by the Texas State Securities Board. As such, he acknowledged their finding that
he had violated Section 12B of the Texas Securities Act. He also agreed to pay a $1000 administrative fine. That is underlined because the state
securities board is not a criminal law enforcement agency, so their finding has
not closed the book on the possibility of state criminal charges.
In fact, it is actually opening the door
to that possibility.
And in finding #4 in the reprimand it
states that he also solicited during the time that Mowery Capital Management
was under federal instead of state supervision. So the board itself
is raising the prospect of federal issues. The press has reported that a
federal complaint against Paxton has also been filed.
*(which Paxton has said he did not know about, even though he voted for it
in 2003) makes his act a felony
and calls for a fine of up to $5000 and/or a minimum of 2 years up to a maximum
of 10 years incarceration.
Paxton has tried to downplay all of
this, of course, likening it to some minor clerical error. Not so.
It is a felony.
Some interesting scenarios could come
out of this if Paxton wins the runoff.
Nobody who has been around Texas
politics long would be surprised if a Democratic prosecutor would charge,
indict and probably get a felony conviction of Ken Paxton if he is the Republican
nominee for/or incumbent Republican Attorney General. And the old saying about "a prosecutor
can convince his Grand Jury to indict a ham sandwich"** comes to
mind. In light of Paxton's numerous
public admissions and his sworn agreement to the securities board order, in
this case, it would be easier for the ham sandwich to escape indictment than
It only gets worse if the federal
complaint reveals wrongdoing. Then the Securities
and Exchange Commission would enter the fray.
None of these scenarios would be good
for Texas, for Republicans or for the Office of the Texas Attorney General. But the Democrats would love it. And the press of course always likes to cover
this sort of story.
Eyes will now be turned on:
(1) Republican Leaders- do they
sit on their hands or enter the fray to try to help Dan Branch, whose nomination would take all of this out of play?
(2) Democrats- do any who did not
vote in the Democratic Primary cross over and vote in the Republican run-off to
try to get Paxton nominated so they can use him as a whipping boy during the
(3) Republican Voters- are they
paying attention and/or do they care?
SB 1060 from the regular 2003 session, available at http://www.capitol.state.tx.us/tlodocs/78R/billtext/html/SB01060F.htm.
adds the following language to Texas law:
Sec. 29. PENAL PROVISIONS. Any person who shall:
Render services as an investment adviser or an investment adviser
representative without being registered as required by this Act shall be deemed
guilty of a felony and on conviction of the felony shall be sentenced to pay a
fine of not more than $5,000 or imprisonment in the penitentiary for not less
than two or more than 10 years, or by both the fine and imprisonment.
vote appears at
Look for record vote #448:
1060 ON THIRD READING
(Marchant - House Sponsor)
1060, A bill to be entitled An Act relating to
enforcement of conduct and other matters concerning a security; providing a
record vote was requested.
1060 was passed by (Record 448): 142 Yeas, 0 Nays, 1 Present, not voting.
- Allen; Alonzo; Bailey; Baxter; Berman; Bohac; Bonnen; Branch; Brown, B.; Brown, F.; Burnam;
Callegari; Campbell; Canales; Capelo;
Casteel; Castro; Chavez; Chisum; Christian; Coleman;
Cook, B.; Cook, R.; Corte; Crabb; Crownover;
Davis, Y.; Dawson; Delisi; Denny; Deshotel; Driver;
Dukes; Dunnam; Dutton; Edwards; Eiland; Eissler; Elkins; Ellis; Farrar; Flores; Flynn; Gallego; Garza; Gattis; Geren; Giddings; Goodman; Goolsby;
Griggs; Grusendorf; Guillen; Gutierrez; Haggerty; Hamilton; Hamric;
Hardcastle; Harper-Brown; Hartnett; Heflin; Hegar; Hilderbran; Hill;
Hochberg; Hodge; Homer; Hope; Hopson; Howard; Hughes; Hunter; Hupp; Jones, D.; Jones, E.; Jones, J.; Keel; Keffer, B.; Keffer, J.; King; Kolkhorst; Krusee; Kuempel; Laney; Laubenberg;
Lewis; Luna; Mabry; Madden; Marchant; Martinez Fischer;
McCall; McClendon; McReynolds; Menendez; Mercer; Merritt; Miller; Moreno, J.;
Moreno, P.; Morrison; Mowery; Naishtat; Nixon; Olivo; Paxton; Peña; Phillips; Pickett; Pitts; Puente;
Quintanilla; Raymond; Reyna; Riddle; Ritter; Rodriguez; Rose; Seaman; Smith,
T.; Smith, W.; Smithee; Solis; Solomons; Stick; Swinford; Taylor; Telford; Thompson; Truitt; Turner; Uresti; Van Arsdale; Villarreal; West; Wilson; Wise; Wohlgemuth; Wolens; Wong;
Present, not voting - Mr. Speaker(C).
Absent, Excused - Davis, J.; Isett; Oliveira.
- Farabee; Noriega; Talton.
famous modern legal term began in New York. It was immortalized in the Tom
Wolfe novel, Bonfire of
the Vanities (1987). Solomon
April 29, 1930) is a New York State lawyer and former Chief Judge of the New
York Court of Appeals, which is the highest position in the New York State judiciary. Wachtler famously
observed that prosecutors have so much control over grand juries that they
could convince them to "indict a ham sandwich." (although
he later told the press that to be politically correct in New York, he should
have said a pastrami sandwich)
By John Coppedge, MD