AUSTIN (KXAN) — Allegations of bribery and abuse of office waged against Texas Attorney General Ken Paxton by several of his highest attorneys has roped the state’s top law enforcement official to Nate Paul, an Austin real estate mogul whose companies have experienced numerous bankruptcies and lawsuits in recent years, according to court records and media reports.
Paul heads World Class Holdings, as well as numerous other companies with similar names that are associated with World Class. His companies amassed up to $1.7 billion in real estate assets nationwide as recently as 2017, according to a Forbes report.
In Travis County more than 50 properties, including prime downtown parcels, with an assessed value exceeding $444 million have been associated with Paul’s World Class companies, according to the Travis Central Appraisal District. It is not clear how many of those properties are still owned by Paul’s companies, some may have been sold or foreclosed.
But, in recent years, World Class has come under financial strain. Paul’s companies have filed bankruptcy 18 times, according to Austin Business Journal. In August 2019, federal investigators raided World Class’ Austin office. That raid and the federal investigation into Paul appears linked to the allegations against Paxton.
Paul has not been charged with any crime related to that raid, and the exact nature of the allegations against Paxton are not yet clear.
“The Texas attorney general’s office was referred a case from Travis county regarding allegations of crimes relating to the FBI, other government agencies and individuals. My obligation as attorney general is to conduct an investigation upon such referral,” Paxton said in a prepared statement Monday.
“Because employees from my office impeded the investigation, and because I knew Nate Paul, I ultimately decided to hire an outside independent prosecutor to make his own independent determination. Despite the effort by rogue employees and their false allegations, I will continue to seek justice in Texas and will not be resigning,” Paxton’s statement continued.
The allegations sent shockwaves through the state’s highest political circles. Gov. Greg Abbott said the allegations “raise serious concerns,” and Republican Congressman Chip Roy, a former first assistant to Paxton, said he should resign.
A former senior employee at World Class Holdings tells KXAN it was known among employees that Paul knew Paxton well. That employee did not know of any specific wrongdoing tied to that relationship.
Paul could not be reached for comment on Monday.
Paul’s World Class companies have been involved in numerous lawsuits in recent years.
In September, Barclays Trust sued Paul, World Class Holding Company LLC and World Class Management Company LLC for breaching a settlement agreement that obligated World Class to pay Barclays Trust $10 million, according to a lawsuit filed in Texas’ Federal Western District.
Barclay’s Trust initially invested the $10 million in World Class Holdings in 2017, but “it soon became clear that numerous representations and warranties made by [World Class] to secure the Trust’s investment were materially false,” the lawsuit states.
Barclays’ lawsuit alleges Paul and his companies failed to make scheduled payments stipulated in the settlement agreement. The lawsuit remains pending in federal court.
In another case, American Express National Bank sued Paul and his company World Class Capital for more than $324,000 related to three credit card accounts, according to the pending lawsuit filed in Travis County District Court.
Tuebor Reit Sub LLC, a Michigan lending company sued Paul in New York’s Southern District Federal Court in 2019 over a $64 million commercial loan it made, for which Paul was the guarantor, according to the federal filing. That case remains pending.
Paul has also been involved in political donations, including giving $25,000 to Paxton and $10,000 to Lt. Gov. Dan Patrick. In light the recent news, Patrick said he would donate that $10,000 to charity, according to an Austin American-Statesman report. The Statesman and KVUE initially reported the allegations against Paxton Saturday.
Paxton is still currently under indictment for felony securities fraud from 2015.