Ken Paxton failed to disclose his investment in WatchGuard. While a member of the Texas House of Representatives, Paxton voted to create a multi-million-dollar contract with WatchGuard, which made Paxton’s investment more profitable. Additionally, Paxton violated his blind trust and made $2.2 million from WatchGuard.
Paxton Helped Pass A Spending Bill That Created A Multi-Million-Dollar Contract With WatchGuard, For Which Paxton Was A Principal Shareholder. According to KFDA, “A company that became a national leader in providing patrol cameras to police was built on the strength of a Texas contract obtained while two state lawmakers were shareholders in the firm-a possible violation of state ethics laws.[...] But WatchGuard's own Web site touted the company's politically connected shareholders. A published company profile boasts that WatchGuard, based in the Dallas suburb of Plano, is "held by an influential shareholder group that includes three state representatives, a judge, and a number of distinguished entrepreneurs." Vanman named the lawmakers: Republican Reps. Ken Paxton, Byron Cook and former Rep. Bob Griggs. WatchGuard's vice president of operations, Dennis Pirkle, is a part-time city judge and jail magistrate, according to company literature. Cook and Paxton made early investments in WatchGuard, and Cook sat on the company's board. Founded in 2002, the company grew just as digital technology began to replace older-generation analog systems. But it was the Texas Department of Public Safety contract in late 2006 that gave WatchGuard its biggest financial boost. Eventually the entire fleet of trooper vehicles in Texas will use WatchGuard camera systems, bringing the company $10 million, Vanman said. WatchGuard also landed a smaller contract for the Texas Parks and Wildlife Department this year. Both Paxton and Cook voted for the appropriations bills that provided the money used to purchase the WatchGuard systems, records show. Paxton and Cook have previously disclosed ownership in Enforcement Video L.P., the registered company name for WatchGuard Video. But records show Paxton did not disclose his ownership in WatchGuard on his 2008 personal financial statement filed with the Texas Ethics Commission.” [KFDA, 10/16/08]
Paxton Sold Part Of His Share After WatchGuard Sales Increased by 250% Following The New Contract. According to KFDA, “In April, WatchGuard said its net earnings increased 250 percent from the previous year after sales doubled two years in a row. About three months later, Paxton and Cook sold a piece of the company for an undisclosed profit, officials said. Just how big a role the legislators played in WatchGuard before they cashed out much of their stake isn't clear. Cook and Paxton, who still own a small share of the company, both described themselves as minor investors with no influence on the direction of the company. ‘I didn't even know we had contracts with the state of Texas,’ Paxton said.” [KFDA, 10/16/08]
Paxton Did Not Agree With Calls For Him To Disclose His Investments To Voters. According to KFDA, “But Jennifer Peebles of Texas Watchdog, a nonpartisan group that promotes open government, said lawmakers should be required by law to disclose whether they invest in businesses holding state contracts. Paxton said he would happily correct any disclosure failures, but he balked at Peebles' idea. ‘I don't see why it would help taxpayers to know that,’ he said. ‘I don't have time to spend tracking every investment I make ... that's the whole point of being a passive investor.’” [KFDA, 10/16/08]
Paxton Shifted His WatchGuard Investment Into A Blind Trust. According to the Barbed Wire, “According to the Wall Street Journal, after coming under scrutiny, Paxton shifted his investments, including in Watchguard, into a blind trust in 2015. A blind trust is an account managed by a third party trustee without the beneficiary’s knowledge in order to prevent a conflict of interest. “ [Barbed Wire, 2/17/26]
In 2019, Paxton Exchanged Text Messages And Conspired With His Blind Trust’s Trustee On Which Financial Moves To Make. According to the Wall Street Journal, “The blind trust the Paxtons voluntarily established in 2015, called the Esther Blind Trust, is structured to block the couple from knowledge of their investments. Its governing documents say that the trustee must act without providing them information other than what is narrowly required for trust maintenance. Paxton publicly affirmed he had no knowledge of trust investments in his 2015 state ethics filing. He told one of his banks that neither he nor his wife ‘have knowledge of the current investments.’ But the text messages with the trust’s trustee, Charles Loper III, show otherwise. In March 2020, Loper texted Ken Paxton a list of eight stock buys worth a combined $618,000. The trust’s bank-account records show it had made the buys the day before. Legal experts called the texting of the stock trades a potential violation of ethics statutes defining blind trusts as blind only if the trust is managed without consultation.” [Wall Street Journal, 10/9/25]
Paxton Received $2.2 Million From His Investment With WatchGuard. According to the Wall Street Journal, “A $2.2 million windfall arrived in 2019. The gain derived from Paxton’s 2004 investment in a police video technology company, later named WatchGuard, that he had shifted into the blind trust. Paxton, who reported investing about $300,000 in WatchGuard, cashed out with a huge gain when the company was bought by Motorola Solutions in 2019 for about $250 million. The investment had drawn scrutiny over the years in Texas, sparked by ethics concerns about a lucrative contract the company obtained in 2006 from the Texas Department of Public Safety while Paxton was an investor and a state legislator. Paxton said in 2008 that he wasn’t aware the company had a state contract.” [Wall Street Journal, 10/9/25]