Texas Attorney General Ken Paxton’s blind trust invested $600,000 in Wildcatter Sand Services, a construction materials company owned by Scott Sherman, who completed a federal prison sentence for mortgage fraud four years prior to the investment.
The revelation stems from previously unreleased records collected during Paxton’s 2023 impeachment investigation, which indicate that the trust, designed to separate the Paxtons’ financial interests from their official duties, was not entirely blind to its holdings.
Paxton, who was acquitted by the Texas Legislature in 2023, is currently campaigning for a U.S. Senate seat against Democrat James Talarico. The investment in Sherman’s company highlights a disconnect between Paxton’s public rhetoric as a tough-on-crime prosecutor and his financial entanglements with individuals convicted of fraud.
What the Right Is Saying
Paxton has not directly answered detailed questions regarding the specific investment or his awareness of Sherman’s criminal history, according to reports from ProPublica and The Texas Tribune. His office has previously defended its business practices, asserting that they comply with ethics laws. A spokesperson for state Sen. Angela Paxton, who filed for divorce last year, stated that she was unaware of Sherman’s criminal history at the time of the investment.
In a broader context, Paxton’s supporters and allies point to his record of prosecuting fraud and corruption. Paxton has publicly celebrated his office’s efforts, stating in a news release, “In Texas, we fight fraud head-on and will not rest until every last corrupt actor is brought to justice.” Supporters view these financial disclosures as technicalities that do not diminish his aggressive enforcement record.
What the Left Is Saying
Critics and Democratic opponents argue that the investment undermines Paxton’s credibility as the state’s top law enforcement official. Richard Painter, a former chief ethics lawyer for President George W. Bush, stated that the attorney general of Texas should have had the judgment to avoid financial dealings with a convicted felon. Painter noted that while business partners may pay out to friends while neglecting tax obligations, the core issue is why the chief law enforcement officer of the state is financially linked to such individuals.
Ethics experts cited by ProPublica and The Texas Tribune suggest that the arrangement erodes public trust in the office. The narrative pushed by Democratic challengers, including James Talarico, focuses on the hypocrisy of Paxton’s campaign ads, which claim he has made 'big pharma and fraudsters pay billions,' while simultaneously holding equity in a company run by a man who pleaded guilty to a mortgage fraud conspiracy in 2014.
What the Numbers Show
Scott Sherman pleaded guilty in 2014 to his role in a mortgage fraud conspiracy involving more than two dozen properties in the Dallas-Fort Worth area, where home prices were artificially inflated to secure larger loans. He served a federal prison sentence and completed it four years before the $600,000 investment was made into his new business, Wildcatter Sand Services.
Records obtained from the 2023 impeachment investigation show that the blind trust was not fully blind, as Ken Paxton had at least some knowledge of its investments. This level of involvement could violate the terms set by the Paxtons when establishing the trust. Additionally, Donald Kettl, an ethics expert and former dean of the University of Maryland’s School of Public Policy, noted that if elected, Paxton would be bound by U.S. Senate rules requiring senators with blind trusts to have no knowledge of the trust’s investments.
During the period when Wildcatter Sand Services and its subsidiary, Grayson County Sand and Gravel, failed to pay taxes to local governments including school districts, the companies wired tens of thousands of dollars to the Paxtons. This financial flow occurred in the months leading up to and during the attorney general’s impeachment trial. Separately, The Wall Street Journal reported that Paxton spent New Year’s Eve 2024 in Dubai with two Americans who had been indicted on federal healthcare-fraud charges and failed to return to the U.S.
The Bottom Line
The disclosure of the blind trust’s investment in a convicted fraudster’s company arrives during a tight U.S. Senate race, potentially complicating Paxton’s narrative of being a clean, tough-on-crime candidate. The records suggest that the mechanism intended to prevent conflicts of interest—the blind trust—may have been managed with more oversight by Paxton than previously acknowledged.
With Paxton facing a Democratic challenger who is likely to highlight these financial ties, the issue of ethical transparency and the true independence of his blind trust will remain a focal point of the campaign. Voters will have to weigh Paxton’s stated commitment to prosecuting fraud against the financial connections revealed by his own trust’s investments.