As Attorney General Ken Paxton continues to fight fraud charges, new allegations emerged last week to add to his legal woes.
Kaufman County District Attorney Erleigh Wiley announced Paxton is under investigation for accepting $100,000 from the CEO of a company under investigation by the state for fraud at the time.
Paxton’s team claims he accepted the funds for his own legal defense against fraud.
From August 2014 to February 2015, medical device company Preferred Imaging LLC was under investigation for Medicaid and Medicare fraud; in 2016, it agreed to a $3.5 million settlement for the schemes, most of which went to the federal government to pay back losses.
The state of Texas received $68,000.
During this period, the CEO of Preferred Imaging reportedly donated $100,000 to the Paxton defense fund, which was declared on the attorney general’s financial statements under gifts.
The donation came to light when the lawyer for the Preferred Imaging whistleblower noticed the contribution on Paxton’s financial statement.
Attorney Justin Sumner found the donation suspicious but asserted he did not have evidence of fraud.
“To learn that Ken Paxton had received a donation of that amount of money just before the settlement and the state settled for the insignificant amount that they did certainly would raise an eyebrow,” Sumner said in an interview.
According to the U.S. Office of the Attorney General, their Civil Medicaid Fraud Division handled the majority of the Preferred Imaging investigation.
Spokesman Kathy Colvin explained Paxton’s involvement:
“The role of the Texas state attorney general’s office, in the investigation and settlement, was very minimal. It was primarily in support of establishing the state’s loss.”
Paxton claims the contribution was not a bribe.
Payoff or not, government officials are capped on the value of gifts they can receive – several thousands dollars less than the $100,000 contribution from Preferred Imaging.
Spokesman Matt Welch maintains Paxton followed the correct procedures for accepting gifts.
When Paxton declared the contributions for his legal fund, they were accompanied by this statement:
“All gifts for legal defense were conferred and accepted on account of a personal, professional, or business relationship independent of General Paxton’s official status.”
Bribery laws prevent government officials from accepting any gift from someone under investigation by their agency, but, like the statement reads, gifts provided as part of a personal, professional or business relationship are exempt from the clause.
This investigation is ongoing.