Curious Case Of Developer Nate Paul Further Entangles Texas Attorney General Ken Paxton

Real estate investor World Class Capital Group CEO Nate Paul, whose office was raided by the FBI last year, is under scrutiny again, this time for his relationship with Texas Attorney General Ken Paxton.

Whistleblowers at the Texas Attorney General's office allege Paxton has mishandled legal investigations involving the real estate developer and investor: one case brought by Paul against the FBI and another where Paul accused 11 people, including two public officials, of a conspiracy to gain control of $200M worth of property World Class Capital Group owns, according to multiple news outlets.

The whistleblowers accused Paxton of bribery and abuse of office, and allege Paul has used the AG office for personal gain through his relationship with Paxton, the Dallas Morning News reports.  

An attorney for Paul could not be reached for comment, but both Paxton and Paul have denied wrongdoing. 

Paul and World Class Capital have made substantial value-add real estate investment plays across Texas. The firm purchased and renovated the 717 North Harwood St. office tower in Downtown Dallas a few years ago, but Paul, who was named to Forbes' 30 Under 30 List in 2016, is mostly known for his sweeping real estate plays across Austin.

World Class Capital acquired a seven-building portfolio on 45 acres at Austin's Met Center in 2018. The play expanded the firm's Austin portfolio to what at the time included 6M SF downtown and a 156-acre campus in North Austin, Bisnow reported. 

The relationship between Paul and Paxton first drew scrutiny in the months after Austin news agencies recorded video of FBI agents swarming Paul's Central Texas home and office in August 2019.

To date, no charges have been filed against Paul, according to the San Antonio Express-News. A spokesperson for the Department of Justice declined to comment when Bisnow requested information on the status or existence of any ongoing federal criminal investigations or charges involving Paul or Paxton. 

Paul claimed the FBI committed due process and civil rights-related abuses and referred the matter to the Texas AG's office, the Dallas Morning News reported. He alleged the FBI searched his home without presenting him with a warrant first and later on presented him with warrants that had been tampered with, according to U.S. News & World Report. 

Whistleblower attorneys within the AG's office eventually reported Paxton, claiming he mishandled Paul's allegations against the FBI. One of the big concerns of the whistleblowers was Paxton's decision to refer the investigation to a relatively inexperienced outside attorney and not to the Department of Justice or a prosecutor with the appropriate scope of authority to investigate the matter, according to the DMN.

Paul also went to the AG's office with allegations of an elaborate plot in which another developer in conspiracy with a federal judge attempted to obtain control of $200M worth of properties he owned through a property receivership scheme, the Associated Press reported.

Paxton also allegedly had an affair with a woman he recommended for a position within Paul's real estate investment business, and AG employees claim her position at World Class Capital clouded Paxton's judgment in dealings with Paul, the DMN reports. Paul has denied hiring her to curry favor.

Paxton is a Collin County attorney who is no stranger to politics or negative headlines. The AG has been facing securities fraud charges in Texas court since 2015, but he has been able to retain his political career, achieving re-election in 2018. 

Paul donated $25K to Paxton's campaign in 2018, according to public campaign finance records. Numerous North Texas law firms, developers and other business interests also donated to Paxton in 2018 and 2019, and though donations from real estate companies to politicians have increasingly come under fire in recent years, the donation doesn't confirm inappropriate conduct between the two. 

Paul has asserted continually that he did nothing wrong and has alleged wrongdoing on the part of FBI investigators, a judge and other business interests.