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Nate Paul, the Austin real estate developer central to allegations of illegal conduct by Ken Paxton, Texas’ now-suspended attorney general, was arrested by the FBI on Thursday.
Paul was booked into the Travis County Jail at 4:25 p.m. on a federal warrant, said Kristen Dark, a spokesperson for the Travis County Sheriff’s Office. The nature of the charges against him have not been publicly disclosed.
Paul’s attorney did not immediately respond to a request for comment. Calls to the U.S. Attorney’s Office for the Western District and Paxton were also not immediately returned.
A spokesperson for the FBI office in San Antonio declined comment, citing Justice Department guidelines.
It’s not immediately clear whether his arrest is related to the allegations against Paxton, but Paul is at the center of the abuse-of-office complaints against the three-term Republican attorney general who was impeached by the Texas House last month. Paxton is currently suspended from his official duties and awaiting an impeachment trial in the Senate, which would require a two-thirds vote to permanently remove him from office.
Early in his career as an investor, Paul was heralded as a rising star in the real estate world and a self-made tycoon worth hundreds of millions of dollars. Through his investment firm, World Class Capital Group, Paul was one of the largest real estate owners in Austin for a time.
But in 2019, the FBI and U.S. Department of Treasury agents raided Paul’s home and business offices. Additionally, Paul filed for at least 18 bankruptcies. Soon after, Paul’s complicated history with Paxton came to light.
Before the FBI raid, Paul made a $25,000 political donation to Paxton in October 2018. Following the donation, multiple senior aides in Paxton’s office accused the attorney general of using his office to help Paul’s business interests, investigate Paul’s adversaries and to help settle a lawsuit. In filings, the former aides described Paxton’s motivations as a “bizarre, obsessive use of power.”
The former top aides said in return Paul helped Paxton fund an extensive remodel of his Austin house and gave a job to a woman with whom Paxton allegedly had an affair. Paxton is married to state Sen. Angela Paxton, R-McKinney. These allegations sparked an FBI investigation.
Those who accused Paxton of bribery were subsequently fired, resigned or put on leave by the attorney general. In response, four of those aides sued Paxton in November 2020, claiming their firings were retaliation for reporting Paxton’s misconduct.
In February, Paxton agreed to apologize and settle the case. He subsequently asked lawmakers to use taxpayer dollars to pay the $3.3 million settlement to the whistleblowing staffers.
But the request was too much for lawmakers. The House General Investigating Committee quietly launched an investigation into Paxton in March and on May 25 the committee recommended 20 articles of impeachment against the attorney general.
The committee accused the Republican official of a range of criminal acts centering on his entanglement with Paul. The Texas House voted 121-23 to suspend the attorney general and refer him to the Senate for trial. A date for the trial, which will occur before Aug. 28, has not yet been set.
Earlier this week, Paxton hired Tony Buzbee, a prominent Houston attorney, to lead his defense team. The House hired two top Texas lawyers, Dick DeGuerin and Rusty Hardin, to lead prosecution against Paxton, both of whom have represented high-profile athletes, celebrities and politicians in criminal and civil investigations.
In March, Paul was ordered to spend 10 days in jail after being found in contempt of court in a case related to the allegations against Paxton. In that case, Paul was fined $180,000 for lying in district court about money transfers he made in violation of a court order in a lawsuit filed by The Roy F. & Joann Cole Mitte Foundation, an Austin-based nonprofit that sued Paul for fraud.
Paul lost an appeal of that contempt of court finding and was ordered to jail in March. But he appealed again to the Texas Supreme Court, which blocked his jail order temporarily and is still considering that appeal.
The whistleblowers in the Paxton case accused their former boss of overriding a decision by his agency’s Charitable Trust Division and directing his office to intervene in the Mitte Foundation lawsuit against Paul. This was odd, according to the whistleblowers, because they said the attorney general had never shown interest in a charity case before.
The whistleblowers claimed Paxton got the attorney general's office involved in the case to benefit Paul by trying to cut down the costs that Paul had to pay to the nonprofit.
Disclosure: Dick DeGuerin and Rusty Hardin have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.
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