Wildcatter payments overlapped tax debts and Ken Paxton’s impeachment
The $600,000 cash infusion reached Wildcatter Sand Services about four years after North Texas home builder Scott Sherman completed a federal prison term for mortgage fraud. The money came from a blind trust the Paxtons established to prevent overlap between their personal investments and their actions as elected officials. ProPublica and The Texas Tribune found the transaction by reviewing previously unreleased records collected by investigators in Ken Paxton’s 2023 impeachment investigation.
Wildcatter Sand Services and Grayson County Sand and Gravel, which Sherman built with his father, grew into an enterprise with multiple locations and subsidiaries. As some of those businesses stopped paying taxes to local governments, including school districts, Wildcatter companies wired tens of thousands of dollars to the Paxtons’ trust in the months leading up to and during Ken Paxton’s impeachment on charges of corruption and bribery. The Legislature later acquitted Paxton on those charges. He is now in an expensive and tight U.S. Senate race against Democrat and state lawmaker James Talarico.
Incorporation documents for the trust said Ken Paxton and Angela Paxton had selected their friend Chip Loper to manage its assets without consulting with them or taking “any instructions regarding investment matters.” Loper did not respond to a request for an interview or answer questions about the Paxtons’ role in selecting investments. Text messages uncovered in the impeachment probe showed Loper and Ken Paxton discussing certain investments, while mortgage and deed records showed that Ken Paxton purchased eight properties between 2015 and 2026 and transferred them into the trust.
The records show that Ken Paxton had at least some knowledge of the trust’s investments, which could violate terms the Paxtons set when establishing it. Donald Kettl, an ethics expert and former dean of the University of Maryland’s School of Public Policy, said that knowledge could also run afoul of U.S. Senate rules if Paxton were elected. Those rules require senators with blind trusts to have no knowledge of their investments. “It’s reasonable to ask whether a candidate for the U.S. Senate has followed the ethics rules for financial reporting of blind trusts that would be required if the candidate became a senator,” Kettl said.
Paxton has been in public office for more than two decades. Since establishing the blind trust when he became attorney general, records show that Paxton knew of some trust investments and that the Paxtons reported related tax losses.
The Paxtons’ 2020 federal joint income tax return claimed more than $93,000 in itemized losses from Wildcatter Sand Services and Grayson County Sand and Gravel. Kathleen Clark, a Washington University in St. Louis law professor specializing in legal and government ethics, said, “That is proof positive that there’s nothing blind about this trust.” She said that if Ken Paxton “can report on his tax return a transaction, then he is not blind to the transaction.”
Sherman had run Artisan Operating LP when he pleaded guilty in 2014 to his role in a mortgage fraud conspiracy. The scheme involved artificially inflating home prices to obtain larger loans for more than two dozen properties in cities across the Dallas-Fort Worth area. Sherman did not respond to calls or emailed questions. Ken Paxton did not answer detailed questions from ProPublica and The Texas Tribune about the Wildcatter investment or whether he knew of Sherman’s conviction, and he has previously said that he follows ethics laws. A spokesperson for Angela Paxton, who filed for divorce the prior year, said she was not aware of Sherman’s criminal history.
Paxton said in a news release last year, “In Texas, we fight fraud head-on and will not rest until every last corrupt actor is brought to justice.” In a recent social media post linking to a newly released campaign ad, he wrote, “As Attorney General, I’ve made big pharma and fraudsters pay billions.” Ethics experts told ProPublica and The Texas Tribune that doing business with a recently convicted felon undermined that narrative and eroded public trust in his role as the state’s top anti-fraud watchdog. Richard Painter, who served as chief ethics lawyer for President George W. Bush, said he would have thought “the attorney general of Texas would have the good sense not to be dealing with a convicted felon.”
“They’ll pay out their friends while they’re not paying their taxes, run up debt,” said Painter, who has been critical of staunch Paxton ally President Donald Trump. “But the question is, why is the attorney general of Texas dealing with those kinds of people?”
In recent weeks, Paxton’s connection to Sherman was the second revelation of him engaging with people charged with federal crimes. Last week, The Wall Street Journal reported that Paxton celebrated New Year’s Eve 2024 in Dubai with two Americans who failed to return to the United States after being indicted months earlier on federal healthcare-fraud charges. Paxton’s spokesperson did not address his association with the defendants but said the attorney general had been “politically persecuted for years.”
Wildcatter companies wired the Paxtons’ trust 15 payments totaling more than $83,000 between January and June 2023. The records collected by impeachment investigators ended in June, so the reporting could not determine whether payments continued. The following year, two of those companies became delinquent on nearly $200,000 in 2023 property taxes owed to local schools, cities and counties. The governments had to sue to recover the money.
The payments came as some Wildcatter companies were failing to pay local property taxes. At the time, Wildcatter Sand Services already owed more than $31,000 in back taxes, according to Grayson County public records, while several other Wildcatter companies owed hundreds of thousands of dollars in 2023 that soon became delinquent.
Angela Paxton served for years on Wildcatter Materials’ advisory board beginning in 2022. Wildcatter Materials owns Wildcatter Redi-Mix. ProPublica and The Texas Tribune could not find documents describing her responsibilities, and she described the role as “non-governing” in her financial disclosures. Her last disclosure showed that she was still serving in 2025. The IRS defines advisory boards as lacking legal and financial authority over companies. While on the board, Angela Paxton voted for legislation that gave the TCEQ discretion to disregard resident complaints after more than five unsubstantiated complaints in seven years. Wildcatter Materials owned Wildcatter Redi-Mix, which operated the Gunter plant, and the measure regulated an industry rather than a specific company.
After receiving the trust’s investment, Sherman purchased a sand mine in Denison and a concrete plant 40 miles down the road in Gunter, a city of about 2,000 residents. Both are in Grayson County near the Oklahoma border. Neighbors complained to Texas environmental regulators about clouds of dust from Wildcatter and other companies at the Gunter site that they said coated their properties for up to 12 hours a day.
The Texas Commission on Environmental Quality issued violation notices to Wildcatter Redi-Mix, which runs the Gunter plant, in 2021 and 2022. At least one dust-related violation was resolved when a road leading to the plant was paved in 2022, according to TCEQ documents. TCEQ did not respond to a request for comment.
Complaints against the company continued. Deirdre Diamond, a respiratory therapist and lead advocate for a local group created to fight pollution from concrete batch plants, contacted her representative in the Legislature, then state Sen. Drew Springer. Despite TCEQ’s earlier violation notices, Springer characterized the neighbors’ complaints as “abusive” and filed a bill that he said would prevent efforts to “weaponize the system.” He made similar comments in a recent interview with the news organizations.
Diamond and other opponents believed the bill was an attempt to keep residents from exercising their rights. They said the language was too vague and failed to explain what would make a complaint unsubstantiated. They also said repeated complaints could result from regulatory inaction. Angela Paxton voted for the bill’s passage in the Senate.
Matt Welch, a spokesperson for Angela Paxton, pointed to the measure’s bipartisan support in the Senate and said it was needed “to stop a small group of environmental activists from wasting taxpayer dollars by weaponizing the complaint process.” He said Diamond’s group filed more than 100 complaints against Dallas-area industrial sites between 2019 and 2023 without resulting in findings by the state environmental agency. “These frivolous complaints divert state resources from legitimate violations,” Welch said.
Welch said Angela Paxton did not recuse herself because the bill regulated an entire industry rather than a specific company. He also said her advisory-board role carried no decision-making authority and that she was unaware of complaints or violations involving Wildcatter. Ethics experts said she should have disclosed the relationship and recused herself. Senate Secretary Patsy Spaw said state law bars lawmakers from voting on bills that benefit them or their businesses, but the prohibition does not apply to industrywide regulation. Because lawmakers write the laws governing what they must disclose and when they should recuse themselves, “a good amount of the time, the guardrails that they create for themselves are not enough,” said Andrew Cates, a San Antonio ethics lawyer, who called this one such instance.
Neighbors of the Gunter plant said the new law left them demoralized and convinced that lawmakers were not interested in protecting them or their land. Diamond moved away after the bill passed, saying she feared the plants’ effects on her children’s health and believed regulators were on the company’s side. She was stunned to learn about the Paxtons’ investment in the company. “You can’t pretend to be about protecting the people when you directly profit from it,” Diamond said in an interview.
Bank statements in the previously unreported impeachment documents show that four Wildcatter companies wired more than $73,000 to the Paxtons in the months leading up to the environmental bill’s passage. About $10,000 arrived during the two weeks before Angela Paxton voted, and another $12,000 came the week after the legislation passed in the Senate. Because the records are limited, ProPublica and The Texas Tribune could not determine why the payments were made or how they were recorded on the companies’ books.
Some of the Wildcatter payments arrived while a House committee investigated whistleblower claims about Paxton’s conduct. Separately, the U.S. Justice Department’s public integrity unit, known for handling high-stakes political corruption cases, took over an investigation in early 2023 into allegations by Paxton’s senior advisers that he abused his office. The unit dropped the investigation in 2025. The employees accused Paxton of firing them after they went to authorities and of using his office against the enemies of an Austin real estate investor and donor.
Paxton also reached a tentative $3.3 million settlement with some of those employees. The proposed payout required legislative approval, drawing the ire of lawmakers who questioned why taxpayers should be on the hook. After the Legislature took no action, a judge awarded the whistleblowers $6.6 million in 2025. Paxton called the ruling a “bogus judgment in support of baseless claims by rogue employees.”
On May 19, a week before Paxton’s formal impeachment, the blind trust wired $9,000 to attorney Mitch Little’s firm. Little later represented both the trust and Paxton in the impeachment trial. The records do not establish whether Wildcatter money paid for that representation, though the trust’s checking account lacked enough money for the payment without company deposits earlier in the month. The trust also had $9,300 in cash and just under $1 million in securities in an investment account, but records show no distribution from that account during the relevant period.
Neither Loper nor Little, now a state representative, responded to questions about the transaction. Angela Paxton’s spokesperson said she had no knowledge of any payments for impeachment lawyers. Craig Holman, an ethics lobbyist for Public Citizen in Washington, D.C., said it would be particularly problematic if any of the money was used as a “passthrough” for Paxton’s legal fees. The documented payments overlap with delinquent taxes and Paxton’s impeachment, but the limited records leave the purpose and accounting of those payments unresolved.