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Mitte Foundation

Paxton accuses his accusers

Well, that’s one way to do it.

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In Republican Attorney General Ken Paxton’s first interview since seven of top aides accused him of accepting bribes and abusing his office, he said Tuesday that he was about to put one of them, first assistant attorney general Jeff Mateer, on administrative leave when Mateer made those accusations and resigned instead.

“I think he found out about it and decided he wanted to leave and set the narrative,” Paxton told the Southeast Texas Record.

Paxton also told the paper that he has placed two remaining executive employees — David Maxwell, director of law enforcement, and Mark Penley, deputy AG for criminal justice, who were among his seven accusers — on administrative leave while he investigates their actions.

Paxton’s statements on Tuesday provide the public’s first glimpse into how he is handling the matter inside the office of the Attorney General, where more than half of the executive staff has accused him of committing crimes.

[…]

In his interview Tuesday, Paxton reiterated his counterclaims against the whistleblowers, saying that they were trying to impede a legitimate investigation of the law enforcement agencies.

“It seems like my office did everything possible to stop an investigation of some law enforcement agencies,” Paxton said. “I can only come to the conclusion that there was an effort to cover up the reality of what really happened. This wasn’t supposed to be a complicated investigation.”

[…]

Paxton also backed accusations by Paul’s attorney, Michael Wynne, who said in a letter released late Sunday that Maxwell, a former Texas Ranger, berated Paul for even bringing the complaint. Paxton said he watched a video of the meeting between Maxwell and Paul.

“It was not a good interview — it was pretty harsh,” he said. “It was clear he had no interest in doing an investigation.”

In the interview, Paxton said Mateer also insisted that the attorney general did not have the authority to sign contracts and that only he, as first assistant, did. Paxton said he reviewed support documentation provided by Mateer and found it to be false.

“I don’t know why there’s so much turmoil over this investigation. I’m not impugning every law enforcement agent,” Paxton said. “We all should be held accountable. We all have to follow the law.”

Well, he was going to defend himself one way or another, and given what the accusations were, a defense of “no, they’re the real criminals” seems like the best option. That would then lead to the question of how it is Paxton managed to hire so many bad actors for high-ranking positions in his office, but that’s a problem for another day. For now, keeping his own ass out of trouble is the main goal.

Here we must pause and note that so far all we know is there were a bunch of accusations leveled against Paxton. We don’t know if there’s an investigation into the actions he’s alleged to have taken, much less if he did do the things he’s accused of. We do know that his accusers are fellow travelers in conservative circles, and that former Paxton lieutenant Chip Roy sided with them. We know that folks like Greg Abbott and Dan Patrick and John Cornyn have been in full “wait and see” mode, which may suggest that they genuinely don’t know what to make of all this, or that they’ve heard enough scuttlebutt to think there’s something to it, but they’re either not ready to throw Paxton overboard, or they’re seeking a more graceful way out of this mess. A lot of information has come out so far, none of which looks great for Paxton, but nothing yet that would force him to resign. That may be what this is like for awhile, and then either the feds do something to make it clear they’re going after him, or we get a press release saying he’s in the clear. Until then, this is what we have to sustain ourselves.

Well, there’s also this.

[Brandon] Cammack declined to answer questions about his work for the agency or speculate as to why Paxton called him about the job. But said he “rose to the occasion” in accepting a major assignment from the state’s top lawyer and that the fallout has been “unexpected.”

“When one of the highest elected officials in the state reached out to me to go conduct this investigation, knowing what my background and knowing what my experience was, with regards to state law claims… I took it seriously,” Cammack told The Texas Tribune Tuesday.

“I don’t know anything about office politics… I don’t know anything about [the relationship] between people. I was called to duty. I showed up for duty,” he said.

Cammack’s work for the attorney general’s office has ended, though he said it was “beyond” him to know if the review would go forward in someone else’s hands.

[…]

Legal experts have questioned the precise nature of Cammack’s job — Paxton described him as both an “outside independent prosecutor” and as “independent counsel” — and asked how he was able to issue subpoenas that aides said “related to private business concerns of Nate Paul.”

They also raised concerns that Cammack — who is connected to [Nate Paul’s attorney Michael] Wynne through their involvement in the Downtown Rotary Club of Houston and the Houston Bar Association — lacked the experience for such a high-profile assignment.

Cammack said the subpoenas were issued by a Travis County judge and that he never went before a grand jury. He submitted an application for subpoenas to the Travis County district attorney’s office and they assisted in getting them issued, he said. He declined to answer other questions about the subpoenas, including which judge issued them, and his role.

Cammack also disputed the notion that he lacked experience, saying he’d had a “successful practice” in Houston for about two and a half years, handling primarily criminal defense work. His investigation for the attorney general’s office centered on violations of the Texas penal code — “something I’m very well versed in having handled hundreds of cases for hundreds of families here in Harris County and contiguous counties.”

He said he was “not friends” with Wynne, but declined to say why Wynne was present when at least one subpoena was delivered. He also would not specify Paxton’s involvement in his work or provide specifics about his investigation.

Cammack said he was interviewed for the outside counsel position on Aug. 26 by Paxton and Mateer. He declined to provide specifics about the conversation, but said he understood there were a few other candidates for the job, and that Paxton asked about his educational and professional history.

A few days later, Cammack received a call from Ryan Vassar, deputy attorney general for legal counsel, about his contract, he said. Signed in early September, the agreement says Cammack would be paid $300 an hour to investigate a complaint and compile a report about any potential criminal charges. It did not give him the authority to indict or prosecute, and said he could work only as directed by the office of the Attorney General.

Cammack’s work on the case largely ended in late September when he received a cease and desist letter from Penley, the deputy attorney general for criminal justice, and then Mateer.

I mean, we still don’t know much, but what we do know just looks sketchy. And so we wait for more.

Why did Ken Paxton hire a newbie attorney to be a “special prosecutor” or whatever he meant to call him?

The Trib has some questions.

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It was a baffling, perilous, perhaps unprecedented task.

Texas Attorney General Ken Paxton hired an outside lawyer last month to look into a complaint of misconduct by a host of state and federal officials, including the Texas Department of Public Safety, the Federal Bureau of Investigation and a U.S. attorney’s office. The claim had been made by a Paxton donor whose home and office were reportedly raided by federal agents last year.

Some legal experts say the investigation should never have been in the hands of the attorney general’s office at all. But if it was, longtime Texas attorneys say, it’s a job for a seasoned prosecutor, perhaps someone with years of experience as a U.S. attorney or district attorney, someone who’d already established a reputation, someone who’d taken dozens of cases all the way from investigation to sentencing.

Instead, Paxton personally signed off on a $300 hourly rate for Brandon Cammack, a 34-year-old Houston defense attorney with ties to the donor’s attorney and five years of experience whose docket, court records show, largely comprises cases involving driving while intoxicated, low-level theft or assault.

Paxton’s office abruptly ended that investigation Friday after political backlash from both parties and criminal allegations from his own top aides. But questions about Cammack’s role — and the process of his selection — persist.

“That’s the $64,000 question: How did Paxton come to hire this particular lawyer?” said Tim Johnson, a former U.S. attorney for the Southern District of Texas. “You’d expect, for something that would have the possibility for serious consequences, that you’d want to have somebody that had a great deal of experience in the criminal justice system. And it doesn’t appear that they did that.”

Equally inscrutable is the precise job Cammack was hired to perform for the attorney general’s office. Paxton has described him both as an “outside independent prosecutor” and as “independent counsel,” and one subpoena obtained by The Texas Tribune refers to Cammack as a “special prosecutor.”

But Cammack’s contract, which Paxton released this week, shows that Cammack was never independent, nor was he a prosecutor. Cammack can investigate “only as directed by the [Office of the Attorney General],” and his contract specifies that he will not be involved in any indictment or prosecution born out of his investigation. He’s submitted an invoice for more than $14,000 of work, according to media reports.

I’ll get back to this article in a second, but I should note that it’s a pretty good overview of the story so far, and includes a lot of new details. Because this is a sprawling story that’s being told in multiple places, it also covers some stuff we’ve already talked about. No one is going to be able to write a short article for anything related to this just because recapping the backstory will take at least six paragraphs.

Legal experts and lawyers who’ve worked with Cammack, including his estranged father, questioned whether he has the experience needed to take on such a high-profile assignment.

As recently as 2018, a judge appointed a more senior attorney to assist Cammack when he was working as a defense attorney on a felony manslaughter case.

Mark Hochglaube, the longtime prosecutor and defense attorney who was brought in, said it wasn’t clear whether the judge or Cammack himself considered the young lawyer too inexperienced to handle the case alone — but that both were on board with getting Cammack some help.

Their client, who was found guilty of manslaughter, was sentenced to 50 years.

He praised Cammack’s effort on the case but questioned his selection for the high-profile appointment.

“If I were the attorney general, and I was in this predicament, would the name Brandon Cammack be the first name that popped into my mind? No, it wouldn’t,” Hochglaube said.

Young attorneys can often punch above their weight and rise quickly through the ranks, Hochglaube said, but he added, “I have a hard time saying, based on my experience with Brandon, that I would’ve thought this was suitable for him.”

[…]

Beyond questions about Brandon Cammack’s qualifications, the scope of his role is murky, too.

Why, some legal experts wondered, would a state attorney general be investigating claims against federal authorities at all? Some called the situation unprecedented.

“I guess every politician is limited only by his imagination,” said longtime Houston defense attorney Rusty Hardin, “but that’s a pretty unique event.”

Edward Loya, a Dallas attorney and former federal prosecutor for the U.S. Department of Justice, said FBI agents are not above the law, and, in principle, there is nothing wrong with the state attorney general looking into FBI misconduct for violations of Texas law.

But he added that it is unusual — and raises serious ethical questions — for a state attorney general to take on an investigation of FBI misconduct in a case involving alleged criminal activity of one of the attorney general’s donors. The prudent course, he said, would have been to refer the matter to the U.S. Department of Justice’s Office of the Inspector General, an independent division within DOJ that probes such claims made against DOJ employees.

“I can’t imagine that’s ever happened before,” said Johnson, the former U.S. attorney, adding that if he had been asked to fill Cammack’s role, “I would’ve stayed as far away as I could.”

“Anybody with half a brain would’ve gotten as far away from this as they possibly could,” Johnson said. But Cammack “may not have had enough experience to realize this is something he really shouldn’t want to get involved with.”

Lawyers interviewed by The Texas Tribune said Cammack’s official role as outside counsel raises questions about whether he had the authority to issue subpoenas, a power limited to prosecutors and assistant attorneys general. His actions in the case could open him up to legal liability if he usurped his authority, and Phelps, the former official in the attorney general’s office, questioned whether the issuance of the subpoenas amounted to a criminal offense.

“An outside counsel is not a ‘special prosecutor’ and has no authority to issue subpoenas, appear in front of a grand jury, or prosecute a criminal case,” said Phelps, who also worked for a decade as first assistant district attorney in Brazos County, and head of a special prosecutions division under Morales.

“I wish someone would pull that Brandon Cammack aside because I think he’s being used, because of his inexperience,” Phelps said.

I skipped over a couple of paragraphs that describe Brandom Cammack’s relationship with his father, who is also an attorney and who comes across as an abusive. It’s icky stuff.

After several days and a whole lot of reading, I’ve been thinking about how to summarize what we know so far, so if we get into a conversation with someone who knows nothing about this other than a vague recollection of some headlines or Facebook posts, we can help them understand. The basic gist of it is that a real estate hotshot in Austin named Nate Paul had been the target of an FBI investigation into his finances, which involved raids on his offices. Paul filed a complaint about the investigation and searches of his properties with the office of Attorney General Ken Paxton, to whom he had contributed $25K in the last election. Paxton did open an investigation, going through the Travis County DA’s office first with a somewhat shady legal pretext to get the investigation handled by his office instead of the DA. He then hired Brandom Cammack, an inexperienced attorney, in a role that is not clearly defined but is something like a special prosecutor, except that Cammack was not independent of Paxton, and no one thinks he had the qualifications or experience for the job. All of this looked like Paxton doing some legal work on behalf of Nate Paul but with the official seal of the AG’s office. That caused a revolt among Paxton’s senior assistants, who told him all of this was highly inappropriate at the least. In the end, seven top assistants to Paxton asked for a federal investigation of Paxton’s involvement in the Nate Paul situation, accusing him of being paid off by Paul to help Paul defend himself against the feds in their investigation of him. Whew!

That’s where things stand now, and there are various subplots and unanswered questions and who knows what else. You can see what I mean when I say that it will be impossible any time soon to write a short article relating to this. I feel like there are still some big shoes to drop, but I couldn’t even guess at what that might mean. It’s becoming quite the political hot potato, as US Rep. Chip Roy – a former top lieutenant to Paxton – has called on him to resign (as have a couple of newspaper editorial boards), and Sen. John Cornyn, himself a former AG, has expressed his disappointment in Paxton’s handling of this. I have to believe that this will be an issue in 2022, in a bigger way than the existing Servergy indictments of Paxton ever were.

One more thing, just to expand on an item noted in the story above: Paxton has officially closed the Nate Paul investigation that started all this, shortly after Travis County DA Margaret Moore told him her office was not going to be involved any more in any way.

Texas Attorney General Ken Paxton said his office is closing its investigation into a complaint made by one of his donors, hours after the Travis County District Attorney formally distanced itself.

Also on Friday, the Texas Department of Public Safety said it was not investigating allegations by aides in Paxton’s office that he committed bribery and other corruption crimes but instead the matter had been referred to the Federal Bureau of Investigations. A DPS spokesman said the Texas Rangers are available to assist.

Paxton had argued that he only pursued an investigation urged by the donor, Austin real estate investor Nate Paul, after getting a referral from Travis County District Attorney Margaret Moore’s office. Moore already told the Houston Chronicle that it was Paxton who first brought Paul’s request for an investigation to her and not the other way around.

A letter she sent Paxton Friday upped the ante and made clear her office is cutting all ties to the probe. Moore noted all the revelations that have come out in recent days — revelations that demonstrate Paxton has more than gone out of his way to assist Paul and his troubled real estate dealings.

“Any action you have already taken or will take pursuing this investigation is done solely on your own authority as provided by Texas law,” Moore said. “The newly surfaced information raises serious concerns about the integrity of your investigation and the propriety of your conducting it.”

She said the referral of the Paul matter from her office to his — until now in the hands of an outside Houston lawyer Paxton hired — “cannot be used as any indication of a need for an investigation …or an endorsement of your acceptance of the referral.” She also said she had instructed her employees “to have no further contact with you or your office regarding this matter.”

Paxton said in a statement Friday that he closed the investigation because his office “can only investigate in response to a request for assistance from the District Attorney’s office.”

I wonder if we’ll hear some more about this from the perspective of someone in Moore’s office, now that they are free of any constraint. We’re almost a week into this story and it’s still a total firehose of new information. The Statesman has more.

More on Nate Paul

This Trib story delves into the life and times of Nate Paul, the young Austin real estate entrepreneur whose relationship with Ken Paxton is the underpinning of the current scandal surrounding Paxton. The story goes into some detail about Paul’s life, which includes a habit of stiffing creditors and a general dickishness that I find crummy but which apparently don’t bother Paxton, but the key bit is right here:

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Meanwhile, Paxton’s office has come to Paul’s defense in at least one other legal matter, records show. Paul’s World Class firm works through a complex web of more than a dozen affiliated business partnerships, which jointly own properties with investors.

A dispute arose two years ago between companies affiliated with World Class and the Roy F. and Joann Cole Mitte Foundation, which invested in multiple Austin properties with the companies. The foundation is an Austin-based nonprofit that provides grants to charitable organizations and academic scholarships for students with financial needs.

The Mitte Foundation sued Paul in 2018, claiming he wasn’t sharing financial information on their jointly owned investments that Paul’s businesses managed. The case went to arbitration, and on July 1, 2019, a company affiliated with World Class agreed to buy out Mitte’s interest in the real estate partnerships for $10.5 million with payment due that August.

It never came, said Ray Chester, the lawyer representing the Mitte Foundation in the case.

In October 2019, the judge in the case ordered a receiver to take over the business partnerships, which would compel Paul to reveal the financial records that Chester said still hadn’t been shared with the Mitte Foundation. Chester said that within days, Paul “blatantly defied” the arbitrator’s ruling and said he had sold the partnerships at less than half of their market value.

But the sale was to another company affiliated with Paul, Chester said.

“He basically sold it to himself at below market value,” Chester said, although court records show the sale was never consummated.

As Paul’s firm cycled through teams of attorneys and held back on making the $10.5 million payment, Paxton’s office intervened in the case on behalf of World Class and its business affiliates this June, court records show. Paxton argued that his office needed to “protect the interests of the public” because the suit involved a charitable trust.

In July, Paxton asked a judge to halt the case. During that time, Chester said Paxton’s office called him five to 10 times per day to try to get him to settle for “pennies on the dollar,” calls that Chester characterized as “vaguely threatening.”

On Sept. 20, less than two weeks before news broke about the allegations against Paxton, the attorney general’s office reversed itself and announced its intention to step away from the case, which is still ongoing.

After filing for bankruptcy in August, the World Class affiliate handling investments in the property did not pay the $10.5 million or turn over the records, Chester said. But a clause in the settlement agreement does allow the Mitte Foundation to take a valuable, larger ownership share in the downtown property, Chester said.

One can certainly see some parallels to another well-known real estate personality, but that’s not what caught my interest. The obvious question here is why was Ken Paxton inserting himself into this particular dispute? It sure seems like a standard fight between a creditor and a debtor, so what was the state’s interest? I didn’t publish this post on Thursday because of Too Damn Much Other News, which is just as well because I then saw this Statesman story, which helped with some of these questions. As noted above, Ray Chester is an Austin attorney who has been representing the Mitte Foundation in its legal battles against Nate Paul and World Class, and apparently also Ken Paxton.

Chester contends the attorney general’s office exerted undue pressure to push for a settlement financially advantageous to Paul — or “pennies on the dollar” compared with what the foundation was owed under a previous $10.5 million settlement reached in 2019.

“We suspected all along that something fishy was behind the AG’s intervention in our case,” Chester said. “There is no legitimate reason why they would be helping Mr. Paul’s companies at the expense of a charity.”

The limited partnerships are called WC 1st and Trinity LP and WC 3rd and Congress LP, named after the locations of their properties. The 1st and Trinity partnership owns prime waterfront land on East Cesar Chavez, next to the Four Seasons Hotel and across from the Austin Convention Center. The WC 3rd and Congress partnership owns several tracts around the Austonian high-rise condos downtown.

In court documents and in an interview with the Statesman, Chester said Paul didn’t pay the $10.5 million settlement.

And as things continued to “go south” for Paul, Chester said Paxton started taking an interest in the legal fight.

Any time a charity is involved in litigation, the charitable trust division of the attorney general’s office must be notified because it has a right to intervene on behalf of the public interest in the charity.

But the only reason the attorney general should get involved in such cases “is to help the charity — not help the criminal guy against the charity,” Chester said. “And that’s what happened here, and that’s what’s made it so unusual.”

Michael Wynne, an attorney for Paul, told the Statesman that the foundation “refused to engage in any meaningful resolution” to the litigation, however, and also “colluded” with a court-appointed receiver in the case, squandering “over a million dollars in legal fees to line their lawyers’ pockets.”

Those are the among the reasons Paul brought the case to the attention of the attorney general’s charitable trust division, he said, disputing a contention by Chester that Chester’s office did so when the lawsuit was first filed — as it was required to do by law.

Wynne also said he is unaware of anyone from the attorney general’s office attempting to pressure Mitte to accept a settlement.

“We were obviously not privy to any of those conversations and have no basis to comment on them,” he said.

This at least helps me understand the claim that the AG needed to step in because the case involved a public trust. I’d love to hear from someone with actual experience what they think about all this.

Paxton mounted an investigation into allegations made by Paul that federal agents with the FBI and U.S. Department of Treasury acted unlawfully during [2019 searches of some of his properties]. Paxton tapped an outside attorney, Houston lawyer Brandon Cammack, to conduct that probe.

Seven senior Paxton aides — including his first assistant, who recently resigned — subsequently filed a criminal complaint against the attorney general that they say stems from his dealings with Paul, who donated $25,000 to Paxton’s reelection campaign in 2018. They’ve asked federal agents to investigate their boss for potential crimes that include bribery, abuse of office and improper influence.

Cammack’s appointment was among the actions that prompted the complaint. Paxton’s intervention in the Mitte case also has sparked controversy.

A senior official in the attorney general’s office recently voiced concerns to the American-Statesman about Paxton’s involvement in the Mitte lawsuit, saying attorneys in the agency’s charitable trust division were instructed by Paxton to weigh in, even though Paxton doesn’t typically take such a hands-on approach.

“I saw just no interest why our office should get involved in this thing,” the official said. “Legally, and just the optics of doing something for a guy who is under FBI investigation — I am like, ‘This is reckless.’”

Documents obtained by the Statesman indicate Paul prodded some staffers of the attorney general’s office to discuss with him their handing of the Mitte case and what Paul alleged to be improprieties by the foundation.

“Your decision to not even respond to my emails has only amplified my concern about your bias toward helping the Mitte Foundation,” Paul wrote in a July 1 email to Josh Godbey, head of the attorney general’s charitable trust division. “I have raised many issues and you have chosen not to respond.”

In a July 23 email, Paul complained to Jeff Mateer — Paxton’s former first assistant who recently resigned — about Godbey’s lack of action. Mateer responded to Paul’s attorneys, asking that all communications be conducted through them, and he also attempted to make clear the agency’s position on such matters.

“It is not our role to assist a party adverse to a charity in pending litigation or provide status updates on those matters,” Mateer wrote in a July 24 email. “Any such non-privileged communications subject to public disclosure might be perceived as questioning our office’s necessary impartiality, which we carefully guard at all times.”

Chester said his firm notified Paxton’s office about the lawsuit as required when it was filed, but was told the agency’s involvement wasn’t needed.

“A junior attorney called me, asked me a few questions and said, ‘You’re fine, we don’t need to intervene,’” Chester recalled.

That was the end of it, he thought.

But subsequently, Paul suffered a series of setbacks in the case. In addition, the court-appointed receiver started making plans to sell the 1st and Trinity property.

“The next thing you know, (the attorney general’s office) intervened,” Chester said. “At that point, we knew there was some connection between Nate and the attorney general’s office.”

“We quickly started getting pressure to settle the case,” Chester said, and “for much less” than the 2019 agreement of $10.5 million.

“They were strong-arming us to settle,” Chester said. “It was very uncomfortable and very threatening. Multiple people told me the pressure was coming straight from Paxton.”

There’s been a lot more reporting on this saga, which I have covered in another post. This is going to be a challenge to follow because multiple publications are all chasing different leads and advancing the story in a variety of ways. We still don’t have a clear picture of what was happening, and some facts are in dispute. But boy, everything we’ve seen so far looks deeply sketchy. I have no idea what Ken Paxton is thinking, but I suspect he’s in for some very rough times. And deservedly so.