The Texas Report 6/12

What’s Happening:

• Austin Real Estate Investor at center of Paxton Impeachment Arrested by the FBI and charged with 8 felony counts of lying to financial institutions (More here)

• Texas Legislative Update

• Thousands of dead Texas fish on gulf shore (More here)

• Hours long search for inmate ends 50 miles southeast of Abilene (More here)

Austin Real Estate Investor at center of Paxton impeachment arrested by the FBI

Nate Paul, the Austin developer in the center of Attorney General Ken Paxton's impeachment, was arrested by the FBI in Travis County last Thursday. He was charged with eight counts of making false statements to financial institutions.

Paul allegedly overstated his assets and understated liabilities to fraudulently obtain loans, according to a 23-page indictment filed by federal prosecutors last Friday.

The government is seeking $172 million in restitution from Paul. U.S. Magistrate Judge laid out the charges - which focused on actions Paul undertook in 2017 & 2018 to allegedly mislead mortgage lenders and credit unions.

Paul is an Austin real estate developer in the middle of the allegations of illegal conduct by Paxton, whom the Texas House impeached on May 27.

Paul is due back in court June 15 for arraignment. He will be released today on conditions including surrendering his passport and leaving Texas only after notifying the court. His in-state travel will be unrestricted. Assistant U.S. Attorney Alan Buie, who represented the government at the hearing and specializes in white-collar crimes, said Paul should be allowed to continue running his businesses.

How this relates to Ken Paxton:

• As we've regularly reported, Nate Paul is a major part of the recent impeachment of Texas Attorney General Ken Paxton. Paxton was impeached in the final days of the Texas legislative session by the Texas House based on a report and investigation led by the House General Investigating Committee.

• The investigation was prompted by a $3.3 million appropriations request by the Office of the Attorney General to cover a whistleblower settlement on behalf of Paxton. Four former top deputies of Paxton said they were improperly fired after accusing him of crimes related to bribery and abuse of office.

• Many of the charges against Paxton in the House investigation relate to him abusing his office to help his friend and donor, Nate Paul.

• Paxton is the state's top elected law enforcement official and the first person impeached in decades.

Attorney General Paxton was not mentioned during the proceedings, and his lawyer said, "The charges against Paul evidently have nothing to do with Attorney General Ken Paxton. Nothing whatsoever. That should speak volumes as to how weak this impeachment effort is."

However, the Texas Tribune reported that Count 7 of the indictment against Paul refers to a credit union Paul lied to. This credit union is among the 39 businesses and individuals that received subpoenas to provide documents and information to an attorney hired by the attorney general's office at the behest of Paul.

This adds further wrinkles to an already complicated situation, and law enforcement may try to use the charges against Paul to dig up further information on Paxton. The Senate will be conducting an impeachment trial on Paxton late this Summer, which will involve the Texas House laying out its case and Paxton defending himself.

Texas Legislative Update

The Texas Legislature is still in its first called special session and looks no closer to finding a compromise on using the nearly $17.6 billion intended for property tax relief. Following the end of the 88th regular session, Governor Greg Abbott almost immediately called a special session for the legislature to continue working to address property taxes and border security.

• The governor's special session call was narrowly focused on cutting property tax rates by reducing the school district's maximum compressed tax rate and increasing the penalties for certain criminal conduct involving smuggling. Bills in a special session have to fall in line with the call by the governor and aren't supposed to go out of bounds.

• Lt. Governor Dan Patrick and the Senate's plan for property taxes include a reduction of the compression tax rate, and an increase of the homestead exemption, while the House plan addresses the compression tax rate.

• Governor Abbott threw his support behind the House plan and said, "The Texas House is the only chamber that passed a property tax cut bill that is germane to the special session that I called to provide Texans with property tax relief."

The House and Senate have been unable to compromise on the two plans, and with the House adjourned, little to no progress may be made in this special session. Something will have to be done by the legislature before the November election, where voters will be given the final say in approving the state's property tax relief plan.

• While the two chambers and the governor continue to work out their differences, $17.6 billion of property tax relief hangs in the balance.

With the House adjourned, the Senate is having hearings on other priority bills unrelated to the special session.

Today Senate State Affairs will hear:

• S.B. 17 by Senator Tan Parker (R-Flower Mound), which would amend current law to prohibit school districts from preventing an employee from engaging in religious speech or prayer while on duty.

• S.B. 9 by Senator Phil King (R-Weatherford) would require school districts to display the Ten Commandments in all public school classrooms.

• S.B. 19 by Senator Mayes Middleton (R-Galveston) would give school districts the authority to, by record vote, adopt a requiring every campus to provide a period of prayer and readings from the Bible or other religious text. School boards could require mandatory prayer time, and students would have to get parental consent to be allowed to participate.

The Texas Senate will likely keeping hearing bills (many of which appeal to the Republican base) and sending them to the House in an attempt to pressure the Speaker to take action.

Interesting legislative stats:

• Legislators filed 8,046 bills, more than any session in the past twenty years. As of early June, 1,246 bills have been sent to the governor, who has up to twenty days to sign, veto, or allow legislation to become law without his signature.

• The governor has signed 639 bills

• Two have been vetoed, one at the author's request.

• Several hundred bills still await his decision on whether they will be allowed to become law or not.

Texas Gulf Coast beach covered as thousands of dead fish wash ashore

Thousands of dead Menhaden fish washed ashore on a beach in the Gulf Coast last Friday morning. Among the deceased were also a stingray, a blacktip shark, some redfish and speckled trout.

County officials said warmer water, which can’t hold as much oxygen as cooler water was to blame for the mass fish deaths. Quintana Beach County Park said in a Facebook post that when water rises over 70 degrees Fahrenheit, it becomes hard for Menhaden to receive enough oxygen to survive.

Fox News reported that shallow waters warm quicker and if Menhaden become trapped, it’s more likely they will suffer from hypoxia, a state where oxygen levels are insufficient to maintain homeostasis.

Additionally cloudy skies block phytoplankton from photosynthesis further contributing to a lack of oxygen in the water.

"So in a nutshell, it was the perfect storm to deplete oxygen levels inshore," Quintana Beach County Park said.

Escaped Inmate Captured 50 miles south of Abilene

A several hours-long chase for an escaped Texas prison inmate convicted of serious violent crimes is now over.

The Texas Department of Criminal Justice (TDCJ) says Trent Thompson escaped from the Formby State Jail between Amarillo and Lubbock late Saturday night. Thompson was captured in Coleman, about 50 miles southeast of Abilene, just before noon on Sunday.

Thompson was previously convicted on three counts of aggravated robbery out of Taylor and Coleman County. He was additionally convicted of aggravated assault on a public servant in Coleman County.

Details on how Thompson managed to get away were not released, but law enforcement has said he will face felony escape charges now that he's been captured. (More here)