Inside the ill-fated relationship between Vista Equity Partners' Robert Smith and Nate Paul, the Austin investor embroiled in a political scandal

Inside the ill-fated relationship between Vista Equity Partners' Robert Smith and Nate Paul, the Austin investor embroiled in a political scandal
Vista CEO Robert Smith and cofounder Brian Sheth were early backers of Austin real-estate investor Nate PaulParas Griffin/Getty Images; Samantha Lee/Business Insider

A scandal in Texas spilled onto the national stage this month after reports said Attorney General Ken Paxton was being investigated by the FBI on allegations of bribery and abuse of office in connection with an Austin real-estate developer who was a political donor.

It marked a dramatic, high-profile escalation of the controversy surrounding Paxton and Nate Paul, the real-estate investor whom the FBI raided last year for still undisclosed reasons.

What isn't as well known is that Paul, who is now 33, counted Vista Equity Partners' Robert Smith and longtime Vista executive Brian Sheth among his early supporters.
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Read more: Inside Vista Equity Partners, where a top exec is negotiating a messy exit and questions about its future loom large

Smith, who is 57, is the chief executive of Vista, a $58 billion software-focused private-equity firm. In October he admitted taking part in a tax-evasion scheme and using millions in unreported income to buy and renovate a vacation home in Sonoma, California; buy two ski properties and a piece of commercial property in France; and build and improve a residence in Colorado, where he funded charitable activities.

Smith settled with the US government for $140 million.
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Sheth, who is 44, was Vista's No. 2 executive, before a Nov. 26 announcement marked his immediate exit.

The Vista executives, who are both billionaires, invested with Paul as he was building his real-estate investment firm, World Class Capital Group, dating back to at least the early 2010s, people who have worked with Paul said. Paul founded his firm in 2007. Business Insider spoke with 15 people to learn more about the relationship between the three men, and the connections between Vista and World Class Capital.

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Once friends, now estranged: Inside the ill-fated relationship between Vista CEO Robert Smith and Nate Paul, the Austin investor embroiled in a political scandal

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