Texas Attorney General Ken Paxton entered the U.S. senate race, there were basically two reputational dings on him. The first was that weird “securities fraud” indictment that always seemed to have been ginned up by political opponents (especially the Joe Straus cabal after Paxton trounced their choice Dan Branch in the 2014 Republican Attorney General primary), and for which the underlying federal indictment for the case had been thrown out years before the state charges were dropped. The second was his wife Angela Paxton filing divorce on “Biblical grounds.” I have no way to determine the truth of a “he said, she said” divorce, and neither of these dings has obscured the fact that Paxton has been an extremely effective, and active, Attorney General who constantly advances conservative causes.
Now Paxton’s Democrat opponent James Talarico has accused him of “getting rich” off his office. There’s only one problem with this theory: math.
James Talarico has a theory that fits on a bumper sticker. Ken Paxton got richer in office; therefore, Ken Paxton is corrupt. The charge is easy to chant and hard to defend. It fails as math, and it does not land on Ken Paxton alone. Angela Paxton’s name sits on the same estate. She taught school, counseled students, and served in the Texas Senate. Before Texans send anyone to Washington, they ought to ask whether a candidate who cannot read a balance sheet is qualified to write a budget.
Net worth can rise for any number of lawful reasons. Compound returns will do it. So will leveraged real estate, a long-held business stake, or a pension earned over decades. Corruption is one possible cause among those, and it is the cause that has to be shown. Growth by itself does not show it. In the Paxtons’ case, the record points the other way.
Ken Paxton did not appear in 2015 as a blank slate on a government paycheck. He graduated from the University of Virginia School of Law in 1991, spent four years at Strasburger & Price in Dallas, then seven years as in-house counsel at JCPenney. He ran his own McKinney practice for about thirteen years and owned a multiple-branch title company besides, while serving in a legislature that pays $7,200 a year because it expects members to keep real jobs. His Texas ethics filing for 2014, the year before he became attorney general, lists an active law firm, a title company, publicly traded stock, roughly two dozen mutual funds, real estate, and a long roster of private partnership interests. A personal financial statement supplied to a bank in 2015 put the couple’s net worth at about $5.4 million, with roughly 40 percent already in a blind trust. That is the starting line. An attack that starts the clock at zero is not an audit.
The best current estimate of the couple’s joint net worth, drawn from Forbes’s asset-by-asset work and the federal disclosure, is about $13 million after roughly $4.7 million in mortgage debt. Growing from $5.4 million in 2015 to $13 million in 2026 is a compound annual rate of 8.3 percent. Over the same years, the S&P 500 with dividends reinvested returned about 13.4 percent a year, a cumulative gain of roughly 299 percent. Five point four million left in an index fund in 2015 would be more than $21 million now. The Paxtons hold $13 million. Call that corruption if you like. It is corruption that lagged a Vanguard 401K account by $8 million.
And Nancy Pelosi’s stock gains by considerably more.
The holdings look like what those returns imply. The one large score is a roughly $300,000 investment made around 2004 in a McKinney firm that became WatchGuard Video, the police dash-camera maker. Motorola bought the company in 2019, and the stake produced a reported $2.2 million gain. The position appears in Paxton’s state filings a decade before the sale and moved into the blind trust in 2015. Around it sit leveraged real estate in several states, about $10 million in gross revenue against $4.7 million in mortgages, cell-tower leases that throw off modest rent, a large book of mutual funds, and a state pension from more than two decades of service. Forbes, no house organ of the right, called the fortune a leveraged real estate business, a diversified fund portfolio, and a pension. There is no mystery cash in that inventory.
Then there is the accuser. James Talarico is 37. Public records do not show a company he founded, a payroll he met, or a portfolio he steered through a losing year. His personal financial disclosure lists one checking account, held jointly with his mother, a fact his campaign has declined to explain.
He’s the perfect candidate for today’s Democrats.
As the headline for this piece puts it, “If the Paxtons Are Corrupt, They Are Remarkably Bad at It.”
(Hat tip: Director Blue.)
