bribery

Nate Paul arrested by feds

A crook any way you look

Nate Paul, the Austin real estate developer central to allegations of illegal conduct by Ken Paxton, Texas’ now-suspended attorney general, was arrested by the FBI on Thursday.

Paul was booked into the Travis County Jail at 4:25 p.m. on a federal warrant, said Kristen Dark, a spokesperson for the Travis County Sheriff’s Office. The nature of the charges against him have not been publicly disclosed.

Paul’s attorney did not immediately respond to a request for comment. Calls to the U.S. Attorney’s Office for the Western District and Paxton were also not immediately returned.

A spokesperson for the FBI office in San Antonio declined comment, citing Justice Department guidelines.

It’s not immediately clear whether his arrest is related to the allegations against Paxton, but Paul is at the center of the abuse-of-office complaints against the three-term Republican attorney general who was impeached by the Texas House last month. Paxton is currently suspended from his official duties and awaiting an impeachment trial in the Senate, which would require a two-thirds vote to permanently remove him from office.

[…]

In March, Paul was ordered to spend 10 days in jail after being found in contempt of court in a case related to the allegations against Paxton. In that case, Paul was fined $180,000 for lying in district court about money transfers he made in violation of a court order in a lawsuit filed by The Roy F. & Joann Cole Mitte Foundation, an Austin-based nonprofit that sued Paul for fraud.

Paul lost an appeal of that contempt of court finding and was ordered to jail in March. But he appealed again to the Texas Supreme Court, which blocked his jail order temporarily and is still considering that appeal.

As of Friday morning when I started drafting this post, we don’t have any more facts about the arrest. But we do have some speculation.

A lead prosecutor in the impeachment case, Dick DeGuerin, hinted Thursday night that the arrest is linked to the allegations against Paxton.

“The dominoes are falling,” DeGuerin said.

Dan Cogdell, one of Paxton’s defense attorneys in the impeachment case, also surmised the arrest is related to the Paxton investigation.

“It’s the oldest play in the book,” Cogdell said, adding that he was merely speculating as the charges against Paul are still unknown. “You’ve got two people you believe to be in a crime together, you arrest the first one and try to get them to cooperate on the other one.”

Asked what incriminating information Paul would have on Paxton, Cogdell said: “Sometimes people cooperate and say things that are true; sometimes people cooperate and say things that are untrue to lessen their exposure. We don’t know what’s going to happen.”

That was Thursday. On Friday, Nate Paul was in court, and we learned more.

Nate Paul, the Austin real estate investor central to allegations of illegal conduct by suspended Attorney General Ken Paxton, has been charged with eight counts of making false statements to financial institutions.

Paul, 36, allegedly overstated his assets and understated his liabilities to fraudulently obtain loans, according to a 23-page indictment filed by federal prosecutors Friday.

The government is seeking $172 million in restitution from Paul.

U.S. Magistrate Judge Dustin Howell laid out the charges — which focus on actions Paul took in 2017 and 2018 to allegedly mislead mortgage lenders and credit unions — Friday morning to ensure Paul understood them.

Paxton was not mentioned in the indictment, nor was he discussed during a half-hour proceeding Friday in Austin’s federal courthouse, where Paul appeared shackled and wearing a blue button-down shirt, jeans and white Air Jordans. He answered Howell’s questions softly, simply stating, “Yes, Your Honor.”

Paul is due back in court June 15 for arraignment. He will be released today on conditions including that he surrender his passport and leave Texas only after notifying the court. His in-state travel will be unrestricted. Assistant U.S. Attorney Alan Buie, who represented the government at the hearing and who specializes in white collar crimes, said Paul should be allowed to continue to run his businesses.

Paul’s lawyer, Gerry Morris, said outside the courtroom that the charges have nothing to do with Paxton, adding that he had “no idea” when Paul last spoke with the now-suspended attorney general.

Prosecutors allege that Paul repeatedly misstated his financial situation to obtain loans from credit unions and mortgage lenders in New York, Connecticut and Ireland.

“On three occasions, Paul gave a financial institution a false and counterfeit document, representing that one of Paul’s bank accounts held millions of dollars when in fact the balance of the account was less than $13,000,” the indictment stated.

In another instance, prosecutors alleged, Paul told a lender he owned 100% of a company that was to receive a loan, but another firm that was not affiliated with Paul owned 91% of the company.

In a third case, Paul told a lender that his total liabilities were $3.4 million when they exceeded $28 million. “Therefore, Paul knowingly made a false statement and report when he said that the amount of his total liabilities was only $3,422,056,” the indictment said.

Okey then. Just a reminder, the keys to both the current FBI investigation of Ken Paxton and the basis of the impeachment were the shady favors Paxton did for Paul to interfere with the FBI investigation into Paul. So yeah, it’s entirely likely that they’re going to put the squeeze on Paul to get to Paxton. How successful they’ll be, that’s to be determined. But surely that’s where we’re going. What a time to be alive. Reform Austin, Texas Public Radio, and the Chron have more.

House General Investigations Committee goes hard after Paxton

May 25th, 2023

by Charles Kuffner.

5 comments

Wow.

A crook any way you look

A Texas House committee heard stunning testimony Wednesday from investigators over allegations of a yearslong pattern of misconduct and questionable actions by Attorney General Ken Paxton, the result of a probe the committee had secretly authorized in March.

In painstaking and methodical detail in a rare public forum, four investigators for the House General Investigating Committee testified that they believe Paxton broke numerous state laws, misspent office funds and misused his power to benefit a friend and political donor.

Their inquiry focused first on a proposed $3.3 million agreement to settle a whistleblower lawsuit filed by four high-ranking deputies who were fired after accusing Paxton of accepting bribes and other misconduct.

Committee Chair Andrew Murr said the payout, which the Legislature would have to authorize, would also prevent a trial where evidence of Paxton’s alleged misdeeds would be presented publicly. Committee members questioned, in essence, if lawmakers were being asked to participate in a cover-up.

“It is alarming and very serious having this discussion when millions of taxpayer dollars have been asked to remedy what is alleged to be some wrongs,” Murr said. “That’s something we have to grapple with. It’s challenging.”

Many of the allegations detailed Wednesday were already known, but the public airing of them revealed the wide scope of the committee’s investigation into the state’s top lawyer and a member of the ruling Republican Party. The investigative committee has broad power to investigate state officials for wrongdoing, and three weeks ago the House expelled Bryan Slaton, R-Royse City, on its recommendation.

In this case, it could recommend the House censure or impeach Paxton — a new threat to an attorney general who has for years survived scandals and been reelected twice despite securities fraud charges in 2015 and news of a federal investigation into the whistleblowers’ claims in 2020.

Erin Epley, lead counsel for the investigating committee, said the inquiry also delved into the whistleblowers’ allegations by conducting multiple interviews with employees of Paxton’s agency — many of whom expressed fears of retaliation by Paxton if their testimony were to be revealed — as well as the whistleblowers and others with pertinent information.

According to state law, Epley told the committee in a hearing at the Capitol, a government official cannot fire or retaliate against “a public employee who in good faith reports a violation of law … to an appropriate law enforcement authority.”

The four whistleblowers, however, were fired months after telling federal and state investigators about their concerns over Paxton’s actions on behalf of Nate Paul, an Austin real estate investor and a friend and political donor to Paxton.

“Each of these four men is a conservative Republican civil servant,” Epley said. “Interviews show that they wanted to be loyal to General Paxton and they tried to advise him well, often and strongly, and when that failed each was fired after reporting General Paxton to law enforcement.”

Epley and the other investigators then walked the committee through the whistleblowers’ allegations, including help Paxton gave Paul that went beyond the normal scope of his duties.

“I ask that you look at the pattern and the deviations from the norm, questions not just of criminal activity but of ethical impropriety and for lacking in transparency,” investigator Erin Epley told the committee. “I ask you to consider the benefits [for Paxton].”

[…]

The investigators interviewed 15 employees for the attorney general’s office, including Joshua Godby, who worked for the open records division when Paxton pressured the division’s staff to get involved in a records fight to benefit Paul in a lawsuit.

Out of the 15 people, investigators said, all except one expressed concern about retaliation from Paxton for speaking on the matter. The investigators also interviewed a special prosecutor, Brian Wice, in a separate securities fraud case that has been ongoing for eight years, as well as representatives for the Mitte Foundation, an Austin nonprofit involved in a legal dispute with Paul.

The investigators outlined the alleged favors Paxton did for Paul. In exchange, Paul helped with a “floor to ceiling renovation” of Paxton’s Austin home and employed a woman with whom Paxton was allegedly in a relationship. Paxton is married to state Sen. Angela Paxton, R-McKinney, who learned of the affair in 2019, leading to a brief hiatus in the relationship before it resumed in 2020, Epley told the committee.

See here for where we started. I assume that “brief hiatus” is in the affair, which means that, um, he’s still canoodling with whoever his not-Angela inamorata is. I dunno, maybe someone should look into that a bit more? Like, maybe there’s some more potential lawbreaking or rules-violating there? Just a thought.

Wow.

Addressing the House Committee on General Investigating, the team outlined several potential criminal offenses they alleged Paxton committed including abuse of official capacity, misuse of official information, misapplication of fiduciary property and accepting an improper gift.

They said Paxton improperly used his office’s resources to help real estate developer and campaign donor Nate Paul on multiple occasions throughout 2020, raising alarm bells among his senior-most aides who viewed Paxton’s personal interventions as highly unusual and unethical. Some of the alleged crimes are felonies, the team noted.

“So is it fair to say the OAG’s office was effectively hijacked for an investigation by Nate Paul through the Attorney General Ken Paxton?” Committee Vice Chair Ann Johnson, D-Houston, asked.

Investigator Erin Epley, a former assistant US attorney, responded: “That would be my opinion.”

[…]

Earlier this year, Paxton and the whistleblowers announced a tentative settlement agreement.

The agency agreed to pay $3.3 million to the four whistleblowers, contingent on legislative approval, and Paxton would apologize for calling them “rogue employees.” Neither side admitted to “liability or fault” by agreeing to the settlement.

The request spurred the House ethics committee to look into the funding request. While the probe began in March, Murr and Phelan first confirmed the inquiry on Tuesday.

Epley said the team reviewed hundreds of pages of documents, including emails, contracts, criminal complaints and lawsuit documents over months. They also interviewed the whistleblowers, other agency employees, officials in the local prosecutor’s office and more.

The team’s presentation to the committee, which lasted more than three hours, delved into years of alleged misconduct by Paxton, including the whistleblower accusations as well as active state securities fraud indictments.

They did not shed any new light on Paxton and Paul’s relationship. But the team said it found evidence to support the whistleblower’s allegations that Paul helped remodel the kitchen in Paxton’s Austin home and secured a job for a woman with whom Paxton was allegedly having an affair.

The investigators said Paxton seemed to sympathize with Paul, whose businesses and offices were raided by the FBI in 2019. Over the course of the next year, investigators say Paxton began personally steering the agency to intervene in matters benefiting Paul.

It began with public records requests, when Paxton repeatedly pushed staff to release sensitive FBI documents to Paul’s legal team, the investigators said. Paxton told an agency staffer he believed Paul was being railroaded, said investigator Terese Buess, who previously led the Harris County prosecutor’s public integrity unit.

“[Paxton] said he did not want to use his office, the OAG, to help the feds” or or [the Department of Public Safety,” she added.

Murr stopped Buess at that moment, asking, “Did you just state, I want to be very clear, that the Attorney General for the state of Texas said he didn’t not want to use his office to help law enforcement?”

Buess responded: “That is exactly what was relayed to us.”

Over the coming months, and against the advice of top staff, he directed the agency attorneys to issue a rushed legal opinion that Paul’s team used to fight a dozen foreclosures, the team noted. And Paxton ordered staff to intervene in a legal conflict between Paul’s businesses and a local charity in a way that helped the developer, investigators said.

“General Paxton, in this instance, charged with protecting Texas charitable foundations, disregarded his duty and improperly used his office, his staff, his resources to the detriment of the (charity) and to the benefit of a single person: Nate Paul,” Buess said.

[…]

The investigators also discussed in detail the active criminal fraud cases against the attorney general. Paxton was indicted for felony securities fraud eight years ago related to his involvement with a North Texas technology firm but has not yet faced trial.

An unrelated bribery investigation also came up. In 2017, the Kaufman County district attorney looked into concerns that Paxton took a $100,000 gift from a man his agency had investigated for Medicaid fraud. She closed the investigation after determining Paxton did not break state laws because he had a personal relationship with the donor.

The team spoke with at least 15 people and said all but one had concerns about retaliation inside the agency. They did not list who they interviewed. It is unclear whether they spoke with Paxton or Paul.

The four members of the investigative team all said they believe sufficient evidence supported the whistleblower’s allegations. They listed a series of crimes they believe Paxton may have committed, including abuse of official capacity and misuse of official information, both felony offenses.

“In relation to many of these crimes, there’s of course the aiding and abetting portion of it,” said investigator Mark Donnelly, another former prosecutor. “He’s acting with other individuals, and conspiracy to commit crimes that violate both the state of Texas laws and federal laws.”

“That’s alarming to hear,” Murr responded. “It curls my mustache.”

Okay first, go back to the Trib story above and look at the picture of Andrew Murr. You’ll know how serious that statement of his is. Second, those are some real greatest hits that this committee is playing. I mean, the Kaufman County bribery investigation, which ultimately went nowhere? Are they thinking about that as background material – you know, “establishing a pattern”, as they say on “Law & Order” – or do they think there was something that should have been acted upon? The mind reels. Finally, maybe the Justice Department ought to perhaps Do Something with this investigation, which is now in their laps? And maybe Texas Democrats ought to push them to take action on this? Again, just a thought.

And for the third time, wow.

The House investigators, a group of five attorneys with experience in public integrity law and white collar crime, said they reviewed hundreds of pages of documents, including emails, contracts and criminal complaints, and interviewed 15 people. All but one stated they had “grave concerns” regarding Paxton showing hostility or retaliation toward them for their participation.

Paxton signed a settlement with the whistleblowers in February for $3.3 million, but the deal is effectively dead because the Legislature has declined to fund it this session, which whistleblowers have said was a condition of the agreement. The session ends May 29. The whistleblowers’ attorneys have asked the Texas Supreme Court to continue on with the suit.

Epley told committee members Wednesday that Paxton violated the state’s open records law to help Paul obtain information about the FBI’s investigation into him and a raid it had executed against his home and business office.

The attorney general’s office, which is charged with determining whether information needs to be released, had issued a “no-opinion” ruling on the matter — the first time it had done so in decades. The office receives about 30,000 requests per year.

Epley said Paul should have been denied the documents, since the open records law has a clear exception for law enforcement matters, yet Paxton pushed for its release.

According to Epley, Paxton obtained his own copy of the documents and directed an aide to hand-deliver a manila envelope to Paul at his business. After that, Paul’s attorneys stopped asking for the FBI records.

Investigator Mark Donnelly also provided new information on Wednesday that an attorney of Paul’s had recommended that Paxton’s office hire a young and inexperienced lawyer named Brandon Cammack as outside counsel to help Paxton investigate the federal officials looking into Paul. That could have been a conflict of interest, as Paul was the one who had requested the investigation in the first place.

Donnolly did not name the attorney who referred Cammack, but Hearst Newspapers has reported on the strange relationship between Cammack and an attorney who represented Paul, Michael Wynne.

Paul, who is in the middle of multiple bankruptcy proceedings and financial litigation, had wanted the attorney general’s office to uncover details about the federal law investigation into him and his businesses.

Paxton hired Cammack as a “special prosecutor” against the advice of his staff, according to the investigators. They said Cammack was able to use the unredacted FBI report from Paxton to pinpoint the targets of 39 subpoenas, which went to Paul’s business interests and law enforcement officials.

You know, this stuff has been out there for a long time. And for a long time, it’s largely been ignored despite the voluminous record. In the same way that there’s basically no such thing as an anti-Trump Republican any more, because they’ve either been corrupted or they’ve left the Republican Party, at least up until now there’s been no such thing as an anti-Ken Paxton Republican in Texas. Mad respect to the three Republicans on this committee and their investigators, and to the whistleblowers before them, but there have been multiple opportunities before now to deal with the Paxton problem. Even if the Lege ultimately moves forward with impeachment, which by the way will require at least eight of Dan Patrick’s hand-puppet GOP Senators to turn on Paxton, he’s gotten away with this shit – and done a ton of damage while doing so – for way too long. Better late than never and all that, but boy howdy is this late.

I will close with three tweets of interest.

Impeachment of Paxton& Senate trial near certainty after exhaustive testimony. Would not be delayed by sine die. House & Senate can call themselves back in if Governor does not.Does Paxton leave gracefully?Speculation already turns to new AG to be appointed by @GregAbbott_TX

— harvey kronberg (@HKronberg) 11:28 AM – 24 May 2023

Texas AG Paxton’s supporters may try to argue the information in today’s hearing is old news. But the reason it’s being litigated in a legislative proceeding now is because Paxton has blocked much of it from being litigated in court for a decade #txlege

— Scott Braddock (@scottbraddock) 10:21 AM – 24 May 2023

Alas now students won’t be able to read my thriller about a state Senator who puts up with being cuckolded by her cheating husband, who happens to be the state attorney general, in exchange for a donor buying her new kitchen counters

— Evan (@evan7257) 12:17 PM – 24 May 2023

I’ve already pre-ordered that book for my Kindle. Texas Public Radio, the Associated Press, Reform Austin, and TPM have more.

No Paxton settlement money in the budget

May 18th, 2023

by Charles Kuffner.

1 comment

The Lege takes a stand.

A crook any way you look

Texas budget negotiators want to ban Attorney General Ken Paxton from using state funds to pay a $3.3 million whistleblower settlement.

This week, they adopted a provision that would bar the Office of the Attorney General from using state money to pay for any whistleblower lawsuits or claims, according to budget documents and a spokesperson with the Legislative Budget Board. The language could still change and ultimately needs sign-off from the Legislature and Gov. Greg Abbott to become law.

The settlement is a hot topic this session as some GOP leaders balked at using taxpayer dollars to foot the bill. A rejection of the funds could send Paxton’s agency back to court with four former staffers who sued, alleging they were fired after accusing the Republican of bribery and abuse of office.

Paxton’s agency did not respond to a request for comment. Neither did Sen. Joan Huffman, R-Houston, and Rep. Greg Bonnen, R-Friendswood, who chair the legislative budget committees. The legislative session ends on Memorial Day.

Late Tuesday, attorneys for the whistleblowers wrote to the budget negotiators calling the proposal “disastrous public policy” that would “unfairly punish our clients.”

The state whistleblower act gives public employees who report corruption a safety net, and barring funding of the settlement would “give office holders a license to break the law,” the lawyers wrote on behalf of former top agency employees James “Blake” Brickman, Mark Penley, David Maxwell and Ryan Vassar.

The attorneys added that other government workers would not “risk their financial livelihood to report corruption if the Legislature hangs our clients out to dry.”

[…]

The budget provision’s consequences could be far more sweeping than this one case if they are adopted, an expert said.

Blocking the ability of a state agency to pay whistleblower lawsuits could discourage its employees from reporting alleged wrongdoing, said Michael P. Maslanka, an associate professor at the University of North Texas Dallas College of Law.

And by limiting the restriction to just one agency, the whistleblowers’ attorneys might even be able to sue the Legislature for infringing on their constitutional right to equal protection under the law, he added.

See here, here, here, and here for the backgound. Gotta say, I thought the Lege would fold on this, because when have any Republicans ever held Ken Paxton accountable for anything? Yet here we are, and I’m glad to see it. I will say again, for the umpteenth time, the fact that the budget doesn’t have money specifically earmarked for this settlement doesn’t mean Ken Paxton and the AG’s office can’t pay it. He can just take it out of the amount that has been appropriated for that office, and deal with whatever shortfalls it creates. I get the whistleblowers’ frustration, I really do. I just see this as the way to inflict some actual pain on Paxton. He deserves it. Reform Austin has more.

Meanwhile, in Ken Paxton crime news…

Apr 3rd, 2023

by Charles Kuffner.

Comments are off for this post

Paxton buddy Nate Paul loses an appeal on the contempt charges against him.

A crook any way you look

The Austin real estate investor accused of bribing Texas Attorney General Ken Paxton still faces 10 days in jail for contempt of court, after losing an appeal.

Paxton and the investor, Nate Paul, are the targets of an FBI investigation launched in late 2020 after Paxton’s aides accused their boss of abusing the power of his office and taking bribes from Paul, a friend and campaign donor.

A panel of the 3rd Court of Appeals largely agreed with Travis County Judge Jan Soifer’s criminal contempt of court order, though the appellate judges tossed two out of eight of Soifer’s violation findings because they found Paul was not given sufficient notice of the allegations, which infringed on his right to due process.

Soifer swiftly reissued the order Friday evening with the modifications the appellate court requested. Paul’s 10-day sentence is scheduled to begin April 10.

It is not clear yet whether he will appeal again. Paul’s attorney, Brent Perry, declined to comment.

In addition to the jail time, Soifer had also ordered Paul, who is enmeshed in legal battles with creditors over his crumbling business and bankruptcies, to pay over $180,000 in fines. Paul had not appealed that decision.

Soifer found that Paul failed to comply with a court order and repeatedly lied to her in court about it while under oath.

See here for the previous post and some starter posts for deeper background; as noted there, this rabbit hole goes way down. This Trib story has a brief summary.

Paul is central to allegations of corruption made against Paxton by eight of his former top deputies. Those deputies told authorities that Paxton had misused his office to benefit Paul, a friend and donor who had given $25,000 to Paxton in 2018.

Among the allegations was Paxton’s push to get the attorney general’s office involved in the Mitte Foundation’s lawsuit despite never previously showing interest in cases involving charities. In return, the employees said Paul donated to Paxton’s campaigns, helped him remodel his multimillion dollar home and hired Paxton’s alleged mistress. Paxton is married to state Sen. Angela Paxton, R-McKinney.

The eight top deputies who accused Paxton of corruption were fired or resigned, but their reports spurred an FBI investigation into Paxton that is now being led by the U.S. Department of Justice.

No charges have been filed. Both Paul and Paxton have denied the allegations.

Last June, Soifer issued an order that Paul report any spending over $25,000 by him or his businesses that could otherwise be used to pay the $2 million judgment he owed Mitte. The order required Paul to share monthly reports of his spending with the court.

Paul did not submit those reports for five months. In November, a few days before the court would consider Mitte’s request to hold Paul in contempt, Paul filed his first report. But in court, the nonprofit’s lawyers argued that 12 days after Soifer’s order went into effect, Paul had paid $100,000 to Avery Bradley, a former University of Texas at Austin and NBA basketball player who had filed a breach of contract lawsuit against Paul’s firm, World Class Holdings.

When Paul was asked about the payment at the hearing, he said he did not remember it, only to later acknowledge the payment in an amended report to the court, Soifer wrote. She found that payment violated her order because it was not made for “fair value” because Paul did not get anything in return.

Soifer also found that Paul lied about bank statements in court and falsely swore under oath that he had made no payments over $25,000 in violation of her order.

“Mr. Paul’s lies to the court while under oath were pervasive and inexcusable, and served to deliberately thwart the functions of the Court,” Soifer wrote.

The appeals court threw out three other violations for a separate $963,000 payment made by another of Paul’s companies, Westlake Industries, because Soifer had not given Paul “full and unambiguous” notice that he could be held in contempt for those violations.

In her new order, Soifer berated Paul for repeatedly disobeying the court orders in the case and other related lawsuits.

“He has been sanctioned numerous times in the past, and such sanctions have failed to deter Mr. Paul from continued disobedience of court orders and lack of candor with the Court,” she wrote.

Anyway. As the attorney for one of the parties suing Nate Paul said, this has been a bad week for him. And that makes it good for the rest of us.

The Lege still doesn’t want to pay for Paxton’s whistleblower sins

Mar 14th, 2023

by Charles Kuffner.

Comments are off for this post

Who can blame them?

A crook any way you look

Now midway through the legislative session, Paxton and state lawmakers are at a standstill, and taxpayers are caught in the middle.

Lawmakers have so far declined to include the settlement money in any budget bills, while Paxton argues that the agreement would ultimately save taxpayers from funding a lengthy court case that may end with a higher price tag.

The whistleblowers’ accusations have prompted an ongoing Department of Justice investigation of Paxton, who has denied any wrongdoing. Paxton’s office did not respond to a request for comment.

Political experts say the Legislature’s reluctance to embrace the agreement could be a tactic to pressure Paxton to either pay for the settlement himself or answer for the corruption allegations in court.

“It’s like the Legislature is telling Paxton that this is his problem to take care of,” said Brandon Rottinghaus, a political science professor at the University of Houston. “This is as close as Paxton will come to a political sanction from his party for his actions. … The party is not going to directly say that they think that he’s done wrong, but they certainly don’t want to be on the hook to foot the bill.”

Lawmakers suggested at a budget hearing last month that Paxton should use his own campaign funds to settle the case, as the state’s election laws allow. But a Paxton staffer interjected, noting that whistleblower laws hold the office accountable, not the officeholder.

[…]

As of January, Paxton had $2.3 million in his campaign war chest and $1.3 million in outstanding loans. He would have to fundraise to pay off the rest of the settlement — a “horrific” option for the attorney general, Rottinghaus said.

The whistleblowers on Wednesday requested that the Texas Supreme Court lift its temporary pause on the case. If Paxton and the whistleblowers remain at an impasse through the end of legislative session in May, they’ll all head back to court.

Chris Hilton, the general litigation division chief and a lawyer for Paxton, accused the whistleblowers on Thursday of trying to “undo the agreement by filing a misleading brief with the Texas Supreme Court, all the while coordinating with the media to create drama.”

“We’ll continue to seek a cost-efficient resolution, even while the plaintiffs needlessly drag this process out,” Hilton said.

Turner pushed back on that claim, pointing to a court filing by the attorney general’s office in which Paxton’s attorneys agreed that “should the parties prove unable to obtain funding,” they would jointly ask the Texas Supreme Court to resume the case.

“As we negotiated the formal agreement, the attorney general backtracked and would not agree to a deadline for legislative approval,” Turner said. “Anyone reading this can easily decide for themselves who is being misleading and who is dragging this process out.”

Cal Jillson, a political science professor at Southern Methodist University, said Paxton is essentially giving the Legislature an ultimatum: “‘Pay to clean up my mess, or as I stall on this set of corruption charges brought against me by my former employees, that could sum up to a great deal more than $3.3 million.’”

The only reason the attorney general’s staff knows the cost could be higher, Jillson said, “is because they intend to stretch this thing out as far as possible.”

With two months left in the legislative session, there’s still plenty of time for lawmakers to change their minds, but it’s a touchy subject.

See here for the background. I remain fine with the stance that the Lege has taken so far, however doubtful I am about their resolve. Put simply, don’t bail out Ken Paxton. I recognize that this puts a burden on the whistleblowers, who did us all a favor by coming forward like this, and I regret that they are caught in the middle. I also maintain that approving the settlement and cutting the AG’s budget by an equivalent (or greater!) amount would be fine, but I have yet to see any suggestion of that in any of these stories. Changing the law to allow Paxton to pay this with his campaign funds might be OK, and there are other ideas that could work. All I care is that no one takes Paxton off the hook. If that means the taxpayers face a bigger payout down the line, so be it. The point is that he should own it all. The Trib has more.

The whistleblowers’ un-settlement

Mar 10th, 2023

by Charles Kuffner.

1 comment

Plot twist!

A crook any way you look

The whistleblowers who sued Attorney General Ken Paxton say they’re headed back to court unless he agrees that the Legislature must approve their proposed $3.3 million settlement before the current legislative session ends in May.

They are the four former aides to Paxton who allege he fired them in retaliation for reporting him to federal authorities for bribery and abuse of office. Paxton has denied all wrongdoing. Their lawyers said Wednesday they were “forced” to file a motion in an Austin appellate court Wednesday asking for the case to resume.

In a joint statement, the lawyers said a deadline of the end of session for payment was the “fundamental premise upon which they asked us to negotiate in the first place.”

“So we’ll go back to court, where the taxpayers will end up paying more to defend (the Office of the Attorney General) than they would to settle this case,” the lawyers said. “We would still settle the case if the Legislature approved the payment this session, but we cannot and did not agree to give OAG the benefit of a settlement while the whistleblowers wait in perpetuity for legislative approval.”

The attorney general’s office did not immediately respond to a request for comment.

Some members of the Legislature, including Texas House Speaker Dade Phelan, have expressed opposition to approving the settlement. Earlier this month, Phelan said in an interview with CBS DFW that he did not think it was a “proper use of taxpayer dollars.” Taxpayers are already on the hook for $600,000 in legal fees for Paxton’s defense.

[…]

The case now returns to the Texas Supreme Court, where it landed after Paxton appealed in December 2021 a decision by the 3rd Court of Appeals that upheld a lower court’s finding that the state’s whistleblower protection law should have prevented the employees from being fired.

The all-Republican court had not yet decided whether it would grant the case when the whistleblowers and Paxton asked them to hold off on any decisions while the parties finalized their settlement agreement. The court could decide to grant or deny at any time; it is not subject to a deadline.

In addition to the $3.3 million payment, the settlement, which the parties announced last month, would have required Paxton to remove a news release from his website that is critical of the employees. He also would have had to state in the agreement that he “accepts that plaintiffs acted in a manner that they thought was right and apologizes for referring to them as ‘rogue employees.'”

See here, here, and here for some background. The Trib adds some details.

The multimillion-dollar settlement, announced last month, would give back pay to the four former employees and would include an apology from Paxton as well as other concessions. But the agreement needs to be approved by state lawmakers, who have expressed an unwillingness to use taxpayer dollars to settle Paxton’s case. At the request of the parties in January, the Texas Supreme Court put the whistleblower case on pause while the two sides looked to finalize the deal. But without a deadline, the case could be on pause indefinitely, attorneys for the former employees said on Wednesday.

“Sadly, we have not been able to reach a final settlement because [the Office of the Attorney General] will not agree to include in the formal agreement a deadline for the legislature to approve funding this session, even though that was the fundamental premise upon which they asked us to negotiate in the first place,” the attorneys said in a statement. “So we’ll go back to court, where the taxpayers will end up paying more to defend OAG than they would to settle this case.”

Paxton’s office did not immediately respond to a request for comment. He has denied wrongdoing.

Attorneys for the former employees said they would still settle the case if lawmakers approved the $3.3 million settlement this session.

“But we cannot and did not agree to give [the Office of the Attorney General] the benefit of a settlement while the whistleblowers wait in perpetuity for legislative approval,” they wrote.

The fired employees’ attorneys have urged lawmakers to approve the settlement, but its funding looks bleak after top legislators, including House Speaker Dade Phelan, came out against the use of state funds to settle the case. The Legislature’s top budget writers did not include the settlement in their first draft of bills to resolve miscellaneous legal claims.

In a filing to the Supreme Court on Wednesday, attorneys for the former employees said the attorney general’s office has told them verbally that they have put the whistleblowers in a “gotcha position.” If lawmakers do not approve funding for the settlement by the end of this legislative session on May 29, the attorney general’s office has said the whistleblower case should remain on pause until the next legislative session in 2025. If it is not approved again, the filing reads, the attorney general’s office has said the case should remain on pause until the following session in 2027.

“And so on in perpetuity. [The Office of Attorney General] tells Respondents the case will never resume; they have given up their claims forever, even if legislative approval is not forthcoming,” the filing reads. “[The Office of Attorney General] thus reaps all benefits of a settlement, and [the former employees] achieve none.”

In written communications, the fired employees’ attorneys say Paxton’s office has been “craftier,” arguing that it is still researching what would happen if the Legislature refuses to approve the settlement and will not address that potential outcome until it happens.

The fired employees’ attorneys blasted both positions as “preposterous,” arguing that they would have never agreed to put the case on pause indefinitely or for a lengthy time period.

The motion to pause the case — which was requested, drafted and filed by the attorney general’s office with agreement by the fired employees — was “intended to briefly postpone” any potential ruling while the two sides sought legislative approval for the $3.3 million settlement. But attorneys for the fired employees say Paxton’s refusal to set a deadline is preventing the two sides from completing the settlement agreement while at the same time not letting their case against him move forward.

Couple things. First, let’s remember that SCOTx was going to rule on the question of whether Paxton could be sued at all under the Texas Whistleblower Act. Paxton had argued that he could not be sued under that law because he’s not public employee, because elected officials don’t count under that law. By asking SCOTx to resume their deliberation on that question, the four plaintiffs are risking that their answer will be to rule in Paxton’s favor and toss the lawsuit altogether. And even if they win on that question, it just means that the lawsuit can go back to a district court and be heard on its merits. Which, again, they could lose, or they could get a lesser amount awarded to them. And the whole thing will then have to go through the appeals process, because of course Paxton will fight it for as long as he’s in office, and the verdict could get overturned or the award could be reduced, and the whole thing could take years. Whatever else you may think about their case and the initial settlement, these guys are taking a substantial risk by doing this.

But you can see why they’re willing to take that risk. Paxton, who has always been able to turn a bad situation of his own making into an advantage, is using the Lege’s understandable unwillingness to pay for his sins as an indefinite stalling tactic. As things stand now, he has zero incentive to take any action. The case is frozen in amber. And even if SCOTx ultimately rules that the lawsuit can proceed, if there’s one other thing (besides criming) that Paxton is good at, it’s delaying legal reckonings. Who knows how long he could draw this out, assuming he remains in office?

All of which suggests a fairly easy way out for SCOTx, if they want to take it. They can rule that the Lege doesn’t have to apportion any money to pay the settlement, and let Paxton pay for it out of whatever budget the Lege sees fit to give him. This is of course what I have been arguing they should do, as it is the most fair and just solution at this point, so I’m a little biased. But, you know, it really is a good solution – it allows the whistleblowers to get their back pay and their apology, it guards against a much larger potential verdict while also not putting the public on the hook, and it makes Paxton bear the brunt of the financial penalty. It might damage the AG office’s ability to do its job, but that’s just too bad. This is what happens when you put a crook in charge of law enforcement. I hope SCOTx comes to the proper conclusion and saves us all a multi-year saga.

Nate Paul jailed for contempt

Mar 6th, 2023

by Charles Kuffner.

2 comments

Just a little story about one of Ken Paxton’s close personal friends.

Also associates with known criminals

A real estate investor accused of bribing the Texas attorney general has been ordered to pay over $180,000 in fines and spend 10 days in jail for contempt of court in Travis County.

The case is one of many that Nate Paul, a friend and campaign donor of Attorney General Ken Paxton, faces as he fights multiple bankruptcies and legal battles with creditors.

He and Paxton are the targets of an FBI investigation launched in late 2020 when Paxton’s aides went to local and federal authorities, claiming the second-term Republican abused his office and took bribes from Paul.

According to a letter from a staff attorney for Travis County District Judge Jan Soifer obtained by Hearst Newspapers, Paul is being punished for ignoring a court order, then later lying about it under oath. The court is fining him $181,760, and his confinement is set to begin March 15.

“Mr. Paul’s flagrant lies to the court while under oath were pervasive and inexcusable, and served to deliberately thwart the functions of the court in enforcing its injunction,” a staff attorney for Soifer wrote on her behalf. “Mr. Paul’s actions are part of a pattern of non-compliance with court orders.”

[…]

The conflict at the heart of the case goes back to 2011 when the nonprofit invested a portion of its endowment in Paul’s companies and a share of his properties. The nonprofit later accused the companies of breaching their contract by refusing to make certain financial disclosures.

Soifer approved an arbitrator’s $1.9 million judgment against Paul in July 2021, ordering that Paul’s companies shut down.

That was when Soifer issued the injunction that Paul flouted, which was meant to prevent him from moving or getting rid of assets to hide them from the court.

Paul appealed the district court’s decision in late 2021, but the panel of appellate judges affirmed the district court ruling against him. Court records indicate Paul’s attorneys plan to request a rehearing on that decision by the full court.

According to the letter from the district judge’s office, despite the injunction, Paul made at least two unauthorized transfers totaling just over $1 million. Paul was required by the injunction to file monthly sworn reports to the court showing all money transfers greater than $25,000, but he failed to report them, the letter said.

Paul later committed perjury by offering false testimony while being questioned by opposing counsel and Soifer, the letter from her office said. He lied about making the transfers, as well as about his own personal bank accounts, even when confronted with evidence of the accounts.

Chester said Paul lied at two separate court hearings in November 2022. At the first one, Chester presented Paul with his own bank statements, and Paul claimed he could not recognize them.

The court recessed for a week to allow Paul time to collect and bring in the bank records himself, so there would be no question of authentication. But at the next hearing, Paul also “completely lied about what bank accounts he had” and claimed he only had $6,000 to his name even though he lives a very luxurious lifestyle,” Chester said.

“The whole thing was very not-believable and showed utter disregard for the court,” Chester said.

If you’ve ever watched a TV show or movie based on some hot piece of longstanding intellectual property – say, a Marvel movie or The Mandalorian or Lord of the Rings, that sort of thing – you surely are aware that no matter how much you may think you know about the subject matter or the characters and their backstories, there’s so much more out there that not only do you not know it, you don’t even know enough to know that you don’t know it. There is Deep Lore that can only be fully understood by the most robust of nerds, who have spent their lives reading the books and comics and blogs and Wikipedia pages and fan fiction and watching the movies and bootleg videos and listening to the podcasts and on and on and on. You live in 2023, you know what I’m talking about.

Well, I’m here to tell you that the story of Nate Paul and his connections to Ken Paxton and all of the twists and turns and cul-de-sacs and rabbit holes associated with them are too deep and byzantine for even the likes of me to get my arms around. Suffice it to say that there’s more to this story than I can adequately summarize from this Chron article or this Trib story which is more expansive and would have required almost a complete copy-and-paste job to make sense here. Read them both, read through all of my Nate Paul-tagged posts, starting with these two – you can tell by the title of the first one that you’re already in a story in progress – and try your best to keep up. Just know that at the end of the day, Ken Paxton is a huge sleazeball who hangs around with a bunch of other sleazeballs, and sleazeballing is his core competency. The rest – so, so much of the rest – is details. And, God willing, the basis of an eventual federal indictment.

Paxton makes his plea to the Lege

Feb 22nd, 2023

by Charles Kuffner.

Comments are off for this post

It’s more accurate to say that one of his assistants pleaded for him while he mostly sat silent, but whatever.

The only criminal involved

Days after the Texas house speaker openly opposed using taxpayer dollars to settle a whistleblower suit against Attorney General Ken Paxton’s office, a top agency lawyer said avoiding the payout would only end up costing the state more.

“It’s ultimately in the interest of the state from a financial perspective” to pay the settlement now, Assistant Attorney General Chris Hilton told a panel of House budget writers. “Financially speaking, there is no upside for the state to this case; even total vindication at trial results in a significant expenditure.”

Hilton said the agency has already racked up $600,000 in legal fees fighting the lawsuit. The agency is required to use outside lawyers in the case because of the conflict of interest, which has driven up the cost, Hilton said.

[…]

Paxton, a Republican, was present Tuesday but deferred to his team for most answers.

State Rep. Jarvis Johnson, D-Houston, asked Paxton directly whether he would use his own campaign dollars. Hilton interjected, noting that the lawsuit is against the agency, not Paxton personally.

“There is no whistleblower case where any individual has paid anything because the individual is not liable under the terms of the statute,” Hilton said. He added, “Under the terms of the settlement, there is no admission of fault or liability or wrongdoing by any party.”

Under the state’s election code, Paxton is allowed to use campaign funds to cover his legal defense. Since he was sued in his official capacity, those costs are not considered a “personal use.”

It’s a different scenario than in 2016 when Paxton wanted to use out-of-state gifts to cover his legal defense in the ongoing securities fraud case against him. The Texas Ethics Commission at the time warned Paxton he would violate the law if he used those funds because the accusations in that case did not stem from his officeholder duties.

On Thursday, state prosecutors said the Department of Justice had transferred the most recent corruption case out of the hands of federal attorneys in Texas and into the Washington-based Public Integrity Section. The reason for the shift was unclear, though Paxton’s attorneys had requested it.

Tuesday’s budget hearing was the first time Paxton has faced lawmakers since the settlement was announced. Some House members seemed resigned about their options.

Texas Rep. David Spiller, R-Jacksboro, and Rep. Steve Allison, R-San Antonio, said the state seems to lose no matter if they pay now or after a hypothetical trial concludes.

“Even if you win, there is no ‘win,’” Spiller said, referring to how the state would still owe outside lawyers.

“We’re kind of in the proverbial rock and a hard place,” Allison said.”Either we pay $3.3 million now or pay far more than that either in additional legal expenses or (because of) an unfortunate result.”

State Rep. Mary González, an El Paso Democrat who chairs the subcommittee, questioned whether Paxton is acting in the public’s interest.

She noted Paxton has declined to represent some state agencies, a key duty of his office, leaving them to pay for outside legal counsel out of their own budgets and at an additional cost for taxpayers. An ongoing case by a conservative activist against the Texas Ethics Commission, for instance, has cost the state more than $1 million.

Hilton said that occurs only in a “tiny percentage” of cases, about 60 in the last year, most of which he said were because the agencies had asked for their own counsel. Others were because the statute did not allow the office to represent an agency, Hilton said, and a smaller amount were because a case conflicted with the state’s obligation to “uphold the Constitution.”

A lot of similarity to what the whistleblowrs’s attorneys were saying, though without any reference to their quest for justice against a crook, as that would have been super awkward. I’m beginning to wonder if any member of the Legislature is going to arrive at my proposal to pay off the settlement and then cut Paxton’s budget by a commensurate amount or if I’m going to need to hire a lobbyist to explain it to them. It’s not that hard, y’all! You can do it.

The Statesman adds a few extra bits.

Hilton argued the cost to taxpayers could exceed $3.3 million if the lawsuit were to continue, in part because the case is procedurally in the early stages, although “it has been pending for a while.” He said the discovery process has yet to begin and that undertaking is lengthy, intensive and costly.

“It strikes me that we’re kind of between the proverbial rock and a hard place in that we either pay the $3.3 million now, or pay far more than that, either in additional legal expenses or an unfortunate result,” said subcommittee member Rep. David Spiller, R-Jacksboro.

[…]

When asked by lawmakers Tuesday what would happen if the Legislature does not approve the settlement payment, Hilton said it’s “difficult to predict” exactly what the next steps would be.

“Because it’s pending litigation, I don’t want to get into too many details,” Hilton said. “Under the terms of the settlement, it is contingent upon all necessary approvals.”

[…]

On Tuesday, Paxton also asked House lawmakers for additional money in the next biennium to hire more staff and to offer competitive pay.

Paxton said in recent years the agency has faced increasing turnover due to staff leaving for other state jobs that in some cases can nearly double their salaries at the attorney general’s office.

Maybe part of the problem is that Paxton is a terrible manager in addition to being the kind of corrupt boss that eight of his trusted lieutenants felt the need to sue, I dunno. My advice to the Lege for how to handle this stands. At the very least please don’t give him any more money. Surely by now we have all the evidence we need that he can’t be trusted with it.

Why should Ken Paxton’s whistleblowers suffer for his sins?

Feb 21st, 2023

by Charles Kuffner.

2 comments

That’s the question their lawyers ask in a DMN op-ed.

The only criminal involved

The whistleblower suit is currently pending at the Texas Supreme Court on appeal of an esoteric argument made by the attorney general. Recently, the Office of the Attorney General and the whistleblowers reached a settlement where the whistleblowers would receive $3.3 million to compensate them for lost wages, compensatory damages and attorneys’ fees incurred in the 2-year-old court battle.

The Texas Legislature must now decide whether to approve payment of the settlement. If the Legislature does not approve payment, the case will return to court, taxpayers will pay millions more in attorneys’ fees and even more for damages and plaintiffs’ attorneys’ fees if, as expected, the whistleblowers win a jury verdict. The attorney general’s office has already paid its private lawyers approximately $500,000 in attorneys’ fees and the parties have yet to even conduct discovery because of the appeal.

Some have criticized the settlement as “hush money” or argued that it would prevent the public from learning the details related to the accusations. This is incorrect. The whistleblowers have already provided tremendous detail in their 129-page lawsuit, which is a public document. Also, the settlement does not prohibit the whistleblowers from discussing the case or cooperating with law enforcement.

The suggestion that the whistleblowers should be forced to continue their lawsuit so discovery in the suit can be used to investigate the attorney general’s conduct is also unfair. The whistleblowers did their part. They reported illegal conduct to law enforcement and, in return, lost their careers. It is law enforcement’s job to investigate these allegations, which it appears they continue to do. Likewise, the Legislature has tremendous authority to demand documents and testimony from Paxton and those in his office, but it has not.

Why should the whistleblowers, who have already sacrificed their employment and already spent more than two years in court, be asked to spend even more resources and time to investigate the alleged conduct, when the FBI and the Texas Legislature have a mandate and countless resources available to do so?

See here and here for some background. The assertion about the Lege holding Paxton accountable aside – you probably heard my guffaw from the comfort of your home – they do made a decent point. That said, it is well within the Lege’s purview to approve the settlement and then cut the AG’s budget by an equal amount, which is what I would argue. We’ve heard some tough talk from some legislators and from Speaker Phelan. It’s all talk for now, and their track record isn’t too encouraging. But there is a clear path that does honor what the whistleblowers did – and by the way, y’all should keep on talking about it, in lots of detail and in front of crowds, as often as you can – while still exerting a modicum official disapproval on the waste of space known as Ken Paxton. It’s on the Republicans in the Lege to take it.

So will the Lege pay off Paxton’s whistleblowers or not?

Feb 19th, 2023

by Charles Kuffner.

2 comments

It’s maybe a bit more complicated than I thought at first.

Always a crook

Texas House Speaker Dade Phelan says he is against using taxpayer money to pay Attorney General Ken Paxton’s $3.3 million settlement agreement in a whistleblower lawsuit filed by four former employees.

In an interview with CBS DFW on Wednesday, Phelan said it would not be “a proper use of taxpayer dollars” and that he does not anticipate that the $3.3 million cost will be included in the House budget.

“Mr. Paxton is going to have to come to the Texas House,” Phelan said. “He’s going to have to appear before the appropriations committee and make a case to that committee as to why that is a proper use of taxpayer dollars, and then he’s going to have to sell it to 76 members of the Texas House. That is his job, not mine.”

Lt. Gov. Dan Patrick, who presides over the Texas Senate, has so far remained silent on the issue. Patrick’s office did not respond to an American-Statesman request for comment Thursday.

[…]

In a statement released Friday, Paxton said he agreed to the settlement to limit the cost of continuing the litigation.

“After over two years of litigating with four ex-staffers who accused me in October 2020 of ‘potential’ wrongdoing, I have reached a settlement agreement to put this issue to rest,” Paxton wrote. “I have chosen this path to save taxpayer dollars and ensure my third term as Attorney General is unburdened by unnecessary distractions. This settlement achieves these goals. I look forward to serving the people of Texas for the next four years free from this unfortunate sideshow.”

The whistleblowers filed the lawsuit against the Office of the Attorney General, not Paxton personally, so the Legislature will have to decide whether or not to appropriate public money to pay the bill.

See here for the background and my well-earned skepticism that the Republican legislature would ever hold Ken Paxton accountable for anything, and here for the original story. Before we get into the details, there’s this to consider.

Attorneys for four former employees who accused Attorney General Ken Paxton of corruption urged lawmakers on Friday not to oppose their $3.3 million settlement — which must be approved by the Legislature because it’s being paid out with taxpayer money.

The attorneys for Blake Brickman, David Maxwell, Mark Penley and Ryan Vassar — all former top deputies to Paxton in the attorney general’s office — said their clients “courageously reported what they believed to be corruption and put the investigation in the hands of law enforcement where it belongs” and were now asking lawmakers to back their efforts to report wrongdoing.

Rejecting the settlement could discourage others from coming forth to report wrongdoing in state agencies in the future, they said.

“No Texas legislator should oppose these whistleblowers’ hard-fought claim for compensation to which they are entitled under the Texas Whistleblower Act,” the attorneys wrote. “State employees cannot be expected to report government corruption in the future if they know the Legislature won’t back their rights under the statute it passed for the very purpose of protecting them.”

[…]

The settlement agreement was announced last Friday and would include the $3.3 million payments to the four employees who were fired and lost wages after reporting what they believed to be Paxton’s crimes. It would also include an apology from Paxton, the retraction of a news release that called the former deputies “rogue employees” and a statement that neither side admits fault in the case.

But the proposed settlement has garnered some opposition from the public and lawmakers because it would be paid out of state funds. Budget writers in the Senate, like Dallas Democrat Royce West, have also expressed skepticism about the agreement.

Under the Texas Whistleblower Act, plaintiffs are allowed to sue the employing agency where the retaliation happened, but not a specific employee in their personal capacity. That is why the payment would be paid out of state funds and not Paxton’s personal funds.

In their statement, the attorneys told lawmakers that the former employees had unfairly lost their jobs and been smeared by Paxton in news stories for reporting what they believed to be serious crimes.

On Thursday, the Supreme Court of Texas, which had been considering a Paxton appeal to the whistleblower suit, put the case on hold to give the parties time to finalize the agreement. The parties have until April 3 to figure out whether lawmakers will agree to the settlement and must notify the court about any changes in the proceedings.

While I could be persuaded that some number of Republican legislators might be a bit low on patience with Paxton, the four whistleblowers will be much more compelling to them. They were all conservative Republicans in good standing themselves, and agreeing to a settlement does sweep this contentious and embarrassing matter under the rug. If they have to take it to court and eventually win, the price tag will be much higher, and as before the state would be on the hook for it. As far as that goes, from a risk management perspective, approving the settlement makes sense.

That said, I don’t see why the Lege has to appropriate an extra $3.3 million to the AG’s office to pay it off. I do think they are well within bounds to appropriate whatever they would have without this, and tell Paxton to figure out his budget on his own. If that means he has to make some uncomfortable choices, that’s his problem and the consequences of his own actions. I think Speaker Phelan has the right idea here, but it wouldn’t hurt to spell it out to the members who might think that they have to explicitly cover this cost. The budget for the AG’s office will have more than enough funds to cover this check. Ken Paxton can do the work to make it happen. That’s the best way forwawrd.

Paxton settles with whistleblowers

Feb 11th, 2023

by Charles Kuffner.

5 comments

Meh.

The only criminal involved

Attorney General Ken Paxton and four of his former top deputies who said he improperly fired them after they accused him of crimes have reached a tentative agreement to end a whistleblower lawsuit that would pay those employees $3.3 million dollars.

In a filing on Friday, attorneys for Paxton and the whistleblowers asked the Texas Supreme Court to further defer consideration of the whistleblower case until the two sides can finalize the tentative agreement. Once the deal is finalized and payment by the attorney general’s office is approved, the two sides will move to end the case, the filing said.

“The whistleblowers sacrificed their jobs and have spent more than two years fighting for what is right,” said TJ Turner, an attorney for David Maxwell, a whistleblower and former director of law enforcement for the attorney general’s office. “We believe the terms of the settlement speak for themselves.”

Paxton, a Republican who won a third four-year term in November, said in a statement that he agreed to the settlement to save taxpayer money and start his new term unencumbered by the accusations.

“After over two years of litigating with four ex-staffers who accused me in October 2020 of ‘potential’ wrongdoing, I have reached a settlement agreement to put this issue to rest,” Paxton said. “I have chosen this path to save taxpayer dollars and ensure my third term as Attorney General is unburdened by unnecessary distractions. This settlement achieves these goals. I look forward to serving the People of Texas for the next four years free from this unfortunate sideshow.”

The tentative agreement would pay $3.3 million to the four whistleblowers and keep in place an appeals court ruling that allowed the case to move forward. Paxton had asked the Supreme Court to void that ruling. The settlement, once finalized, also will include a statement from Paxton saying he “accepts that plaintiffs acted in a manner that they thought was right and apologizes for referring to them as ‘rogue employees.’”

The attorney general’s office also agreed to delete a news release from its website that called the whistleblowers “rogue employees.” The news release had been deleted as of Friday morning.

[…]

Two weeks ago, three of the four plaintiffs in that lawsuit – Penley, Maxwell and Vassar – asked the Texas Supreme Court to put their case on hold while they negotiated a settlement with Paxton. Brickman initially sought to oppose the motion but signed onto the settlement agreement filed with the court Friday.

See here for the previous entry. Good for the fired guys getting paid – Paxton did them wrong, and they made him pay for it, which is as it should be. And as this stands, the ridiculous argument that Paxton as an elected official is exempt from the Texas Whistleblower Act remains a crackpot theory and not an official opinion of the Supreme Court. Someone may try that again some day, but maybe this demonstrated the weakness of that claim. We can only hope.

On the other hand, all of the details of what happened here are going to be forever swept under the rug. Did Paxton do any of the things that he was alleged to have done – as a reminder, the list includes “bribery, tampering with government records, obstruction of justice, harassment and abuse of office”, as well as blatantly lying about the charges on the campaign trail? We’ll never know for sure, unless the FBI gets off its rear end and files criminal charges against him. And, um, not to put too fine a point on it, but where is that three million bucks to settle this going to come from? If the answer to that is “your tax dollars and mine”, well, I’m not so sure Paxton will be incentivized to actually learn a lesson from all this, you know? It’s true that a verdict and judgment against Paxton would have run into a lot more dough, also your taxes and mine, but I have this nagging feeling that Paxton was basically playing with house money. The asshole got away with it again.

Okay, maybe not:

The payment for the settlement would come out of state funds and has to be approved by the Legislature. After the tentative agreement was made public, state representative Jeff Leach, the Republican from Plano who oversees the House Judiciary and Civil Jurisprudence Committee, said he was “troubled that hardworking taxpayers might be on the hook for this settlement between the Attorney General and former employees of his office.”

“I’ve spoken with the Attorney General directly this morning and communicated in no uncertain terms that, on behalf of our constituents, legislators will have questions and legislators will expect answers,” Leach said in a statement to the Texas Tribune.

Yeah, well, I’ll believe that when I see it. The next time the Republicans hold Ken Paxton accountable for anything will be the first time that happens. The Chron has more.

Paxton seeks settlement with some of the whistleblower plaintiffs

Feb 1st, 2023

by Charles Kuffner.

Comments are off for this post

Very interesting.

The only criminal involved

Texas Attorney General Ken Paxton’s legal team is in settlement negotiation talks with three of the four former employees who filed a whistleblower lawsuit against him for firing them after they accused Paxton of criminal acts.

Paxton’s lawyers, in a joint filing last week with attorneys for Mark Penley, David Maxwell and Ryan Vassar — Paxton’s former deputies — asked the Texas Supreme Court to put the whistleblower case on hold to give the parties time to negotiate a settlement. The lawyers wrote they were “actively engaged in settlement discussions” with mediation set for Wednesday.

Lawyers for a fourth plaintiff, Blake Brickman, opposed the motion in their own filing and urged the court to move forward with its consideration. The news was first reported by The Dallas Morning News.

[…]

Paxton has argued in state court that he is exempt from the Texas Whistleblower Act because he is an elected official, not a public employee and that he fired them not in retaliation for their complaint, but because of personnel disagreements. An appeals court has ruled against him and allowed the case to move forward. But last January, Paxton appealed his case to the Texas Supreme Court.

The joint filing by Paxton’s lawyers and the three plaintiffs says the court should defer its review of the case until Feb. 9 to give the parties an opportunity to resolve the issue outside of the courtroom.

Paxton’s office did not immediately respond to a request for comment.

Brickman’s lawyers, Thomas Nesbitt and William T. Palmer, said in their filing that Paxton’s team has been delaying the case for two years and “there is no reason for abating this case.” They argued that the other plaintiffs sought the pause only because they intended to settle the case, but since Brickman was not involved in those negotiations, his claims still needed a quick resolution.

“Brickman respectfully requests that this Court deny the request for abatement,” they wrote. “It imposes further needless delay of the adjudication of Brickman’s claim.”

See here for my last update, in June. I am unabashedly rooting for Blake Brickman here. I respect that Messrs. Penley, Maxwell, and Vassar wish to settle. If they think that’s in their best interests, then godspeed and good luck. But if Brickman wants to pursue the case, there’s no reason to make him and SCOTx wait until they come to an agreement – if indeed they do. The question of whether Paxton as Attorney General can be sued at all in this context matters, and we deserve to get a ruling on that. (Yes, I may end up regretting this request, but such is life.) From a slightly more selfish perspective, the only way to ensure that the more sordid allegations from this complaint get an airing is if there’s a trial. Sure, if the FBI ever charges Paxton with a crime we may find out more, but given how long that has already taken and the amount of time Paxton has been able to evade trial for his state crimes, we may all be dead by the time that happens. So yeah, let this lawsuit continue. We all deserve some answers.

William-Paul Thomas

Aug 6th, 2022

by Charles Kuffner.

Comments are off for this post

This is bad. The question is how much worse might it be.

William-Paul Thomas, the mayor’s council liaison, was offered more than $13,000 by a local bar owner to help him pass a building inspection and fast-track a new permit to reopen a bar as a restaurant, newly unsealed court documents show.

Thomas contacted the “relevant” fire official to ensure the unnamed business owner passed the inspection in May 2020, prosecutors wrote, and then he used his position in the mayor’s office to “pressure other officials” to approve the permit in July, as well. He was paid an undisclosed amount of money for his efforts.

Thomas pleaded guilty on July 25 to one federal count of conspiracy to accept a bribe. He will appear for sentencing before U.S. District Judge Andrew S. Hanen on Nov. 28. His lawyer, Monique Chantelle Sparks, did not respond to a request for comment Wednesday.

The documents were sealed until Wednesday morning at the request of the U.S. Attorney’s office. The Chronicle published an article about the allegations Tuesday night. Thomas’ plea deal, however, remains sealed.

It is unclear whether federal investigators are looking into the unnamed city officials Thomas allegedly worked with to get the certificate and permit approved, or if they are conducting a broader inquiry into City Hall affairs.

Sean Buckley, a legal expert on federal judicial procedures, said Thomas’ quick guilty plea and his willingness to forgo a probable cause hearing before a grand jury means he likely agreed they had strong information against him. It also suggests Thomas may be part of a wider investigation by the Justice Department.

Thomas abruptly resigned from his City Hall position last Wednesday, one day after pleading guilty. He told the mayor in an 11:30 p.m. email he was retiring due to health reasons.

[…]

City Attorney Arturo Michel said later Wednesday the office of the inspector general is opening its own investigation, based on the document’s charges that Thomas worked with officials in the fire department and permitting office to approve the requests.

Prosecutors say the bar owner — whom they did not name — needed to pass a city fire inspection to get a temporary certificate of occupancy in May 2020. He turned to Thomas for help.

“Thomas, in his official capacity, placed calls to the relevant Houston Fire Department official to ensure that COMPANY 1 would pass its fire inspection and be issued its TCO,” the charging document says. The owner then paid Thomas an undisclosed amount of money after he got the certificate.

It is not clear which fire department official Thomas contacted. Fire Chief Samuel Peña said it difficult to identify the person without the name of the business.

The business owner reached out again in June 2020, after his bar — a separate business — was shut down by the Texas Alcohol and Beverage Commission. COVID-19 restrictions around that time ordered bars to close but allowed restaurants to continue operating with limited capacity.

“On July 6, 2020, BUSINESSMAN 1 offered THOMAS up to $13,0000 to have the necessary permit issued quickly so that COMPANY 2 could reopen,” the document says. “THOMAS agreed to use his official position to pressure other officials to issue the permit quickly, all in exchange for money.”

Thomas then used his position to “pressure other officials” to grant the necessary permit, and the owner was allowed to open as a restaurant. It is not clear which specific permit the owner was seeking from the city; the Texas Alcohol and Beverage Commission was responsible for classifying bars and restaurants based on the percentage of sales that came from alcohol.

Buckley, a federal defense lawyer who represented former U.S. Congressman Steve Stockman and authored a book on federal criminal rules and codes used by trial attorneys across the country, reviewed the court documents at the request of the Houston Chronicle. He is not involved in the case.

“He’s obviously cooperating because no one who is a target in a federal investigation would ever agree to plea to a criminal information unless there have been extensive discussions between the target, his lawyer and the government leading up to that decision,” Buckley said.

“Either the government lawyers showed him what they had or he knew what they had. He knew he had everything to gain by cooperating and agreeing to plead guilty without forcing the government to get an indictment from the grand jury, and much to lose by not cooperating.”

Buckley said it also clear the investigation, by prosecutors from the public corruption unit, has been going on for months and there likely is a wider-ranging investigation underway involving multiple defendants.

“My read on this is that this person has something of value to the government,” Buckley said.

He said the documents also indicate “there is an environment in the city of Houston that allows this type of thing to take place.”

I will say up front that I am acquainted with William-Paul. As is the case in this kind of situation, I’m shocked to see the story. I don’t know him well enough to say more than that, but as I have met him and talked to him, I wanted to say so.

I Am Not A Lawyer, and I have no experience in these matters, but it seems to me unlikely that there would be only one such transgression like this. If nothing else, I would think the FBI wouldn’t prioritize a case with one crime of this nature. I’d expect that the bribe payer and whoever was involved with the Fire Department and permitting office will be implicated next. The big question is then whether it goes beyond that, and if so how far. There is certainly the potential for this to be big, but we won’t know until the FBI tells us, and as we know from other experiences that may take a long time. In the meantime, I wouldn’t want to be BUSINESSMAN 1 or anyone else who might be implicated. Don’t take or give bribes, y’all.

Where are we with the Paxton whistleblower lawsuit?

Jun 22nd, 2022

by Charles Kuffner.

1 comment

We are in the familiar position of waiting for the drawn-out appeals process to conclude. Pull up a chair and make yourself comfortable.

Best mugshot ever

The appeals process has grown a bit longer in state Attorney General Ken Paxton’s effort to dismiss a whistleblower lawsuit by four top agency officials who claim they were improperly fired in 2020 after accusing him of accepting bribes and other misconduct.

Paxton turned to the Texas Supreme Court 7½ months ago after two lower courts rejected his bids to toss out the lawsuit.

Last month, the Supreme Court told Paxton and the whistleblowers to provide justices with a deeper dive into the legal issues involved, kicking off a second round of legal briefing that was recently extended when the court granted Paxton’s request for an extra month to file his expanded brief.

Paxton’s brief is now due July 27, and although the court told Paxton that additional extensions aren’t likely to be granted, the move means the final brief isn’t due until Aug. 31 at the earliest.

That moves the case into election season as Paxton seeks a third four-year term against a Democrat, Rochelle Garza, who has made questioning Paxton’s ethics a campaign centerpiece. Three opponents tried the same tactic against Paxton in this year’s GOP primaries without success.

The timing also puts the case close to the two-year anniversary of when eight top officials of the attorney general’s office met with FBI agents and other investigators to relate their suspicions that Paxton had misused the powers of his office to help a friend and political donor, Austin real estate investor Nate Paul.

See here and here for the most recent updates. Paxton’s argument is that as an elected rather than appointed official, he doesn’t count as a “public official” under the Texas Whistleblower Act, so the employees who fired him have no grounds to sue. He has other arguments, but that’s the main thing that will be of interest to the Supreme Court. I’m sure you can surmise what I think, but if you want to dig deeper you can click the Texas Whistleblower Act tag link and review other posts in this genre.

Just as a reminder, we are also waiting for the FBI to take some kind of action in their investigation of the Ken Paxton-Nate Paul dealings, the State Bar complaint against Paxton for his attempt to overthrow the 2020 election should have a hearing sometime later this summer, and of course there’s the granddaddy of them all, the original state charges that Paxton engaged in securities fraud, which are now eight years old. He’s sure been a busy boy, hasn’t he?

Abbott and Patrick ask SCOTx to take up Paxton’s whistleblower appeal

Apr 27th, 2022

by Charles Kuffner.

Comments are off for this post

They sort of have a point, but they should still butt out.

Best mugshot ever

Gov. Greg Abbott and Lt. Gov. Dan Patrick on Monday urged the Supreme Court of Texas to take up Attorney General Ken Paxton’s appeal to throw out a whistleblower lawsuit against him.

The appeal is Paxton’s latest attempt to avoid a trial after eight of his former top deputies accused him of bribery and abuse of office in late 2020. Within seven weeks of their complaint to authorities, all eight had either been fired or driven to leave the agency. Four of the fired employees later filed a whistleblower lawsuit against Paxton saying they were fired in retaliation for their complaint and have asked to be reinstated to their jobs. Paxton denies wrongdoing.

Paxton, a Republican, has fought that lawsuit, claiming that the state’s whistleblower law — which covers public employees, appointed officials and governmental entities — does not apply to him because he is an elected official. A district court and an appeals court have ruled against Paxton’s lawyers and said the lawsuit could move forward. But in January, Paxton’s lawyers asked the Texas Supreme Court to reconsider the matter and throw out the case.

Paxton’s lawyers argue that allowing whistleblowers to sue the attorney general for firing them could hamper the executive power that the state constitution gives him. It is the same argument two lower courts have already rejected after hearing from the whistleblowers’ lawyers, who argue that siding with Paxton would take away whistleblower protections for employees trying to report the misconduct of an elected official.

Lawyers for the governor’s and lieutenant governor’s offices did not indicate whether they agree with Paxton’s argument. The two Republican state officials filed friend of the court briefs asking that the high court take up the case because it is relevant to statewide governance and to the powers of an executive office under the Texas Constitution. Because of that, lawyers for the offices argued the case should be considered by a statewide court and not by the local courts that have already rejected Paxton’s argument.

The two lower courts were filled by Democrats. The Texas Supreme Court is made up of nine Republicans.

See here for the background. I don’t think it’s unreasonable to argue that the state’s high court should weigh in on this question. They could, I suppose, simply issue an order denying the appeal request on the grounds that they’re fine with the lower courts’ rulings. Most cases never get close to the Supreme Court. Indeed, one of the themes I saw in the judicial Q&A responses I got from 1st and 14th Court of Appeals candidates in 2018 and 2020 was precisely that those courts are often the last word on a lot of consequential cases. SCOTx has no obligation to take this up. It’s easy to see why they might want to, but in the end it would be unremarkable if they didn’t.

It’s also easy to see that what Abbott and Patrick want is for a court full of Republicans to have the final word, since I’m sure they don’t consider the lower courts to be valid in the same way. One could perversely assert that only a rejection from the all-Republican Supreme Court will settle this matter in a way that might shut up Paxton and his sycophants, though perhaps the Court of Criminal Appeals would beg to differ.

One more thing:

An attorney whose firm represented Paul, the friend and campaign donor to Paxton, also urged the Supreme Court Monday to weigh in on the case, saying it “presents far reaching consequences for our state government.”

Statewide officials like Paxton need to be able to fire or retain employees based on whether they help advance their goals, wrote Kent Hance, founding partner of the Austin-based law firm Hance Scarborough.

“Inferior officers are carefully chosen by an elected official to provide competent policymaking advice in line with the policymaking goals as defined by the elected official,” Hance wrote. “This works well when the goals are in line with the advice, but what happens when they are at odds?”

A political action committee for Hance’s firm — the HS Law PAC — donated $25,000 to Paxton in June 2020, after he intervened in litigation involving Paul, as Hearst Newspapers reported.

Lawyers for one of the whistleblowers pointed to the donation this week.

“Only somebody as shameless as Ken Paxton would get a lobbyist whose firm donated $25,000 to Paxton while it was representing Nate Paul companies to ask the Texas Supreme Court to re-write the Texas Whistleblower Act,” lawyers TJ Turner and Tom Nesbitt said in a statement. They declined to comment on the briefs by Abbott and Patrick.

Hance did not immediately respond to a request for comment, but managing partner Jay Stewart, who is trustee of the PAC, has told Hearst it operates independent of the firm’s litigation section and that the donation had nothing to do with any cases.

Yeah, that’s a pretty good summary of Texas politics. Political donations never have anything to do with getting the political outcome we prefer. Who would ever think such a thing?

I regret to inform you that Ken Paxton may not be an honest broker

Feb 22nd, 2022

by Charles Kuffner.

3 comments

You should maybe be sitting down for this.

Best mugshot ever

The whistleblowers who sued Texas Attorney General Ken Paxton after he fired them for accusing him of bribery and abuse of office are speaking out against him publicly for the first time since filing their lawsuit, in response to what they say are Paxton’s “numerous false and misleading public statements” on the campaign trail.

The four whistleblowers – former deputy attorneys general James Blake Brickman, Mark Penley, and Ryan Vassar, as well as the office’s former director of law enforcement David Maxwell – said they previously intended to stay silent about their case while it played out in the judicial system.

“Our preference was to remain silent while the wheels of justice turned, and our civil case progressed in the courts,” they said in a joint statement Monday. “However, in recent weeks, Paxton has made numerous false and misleading public statements that we feel obligated to correct.”

The whistleblowers also said they had remained quiet to respect the “ongoing FBI investigation,” indicating that a federal criminal probe into Paxton continues. The FBI has declined to comment on the matter in the past.

“The most basic qualifications of an attorney general are respect for truth and respect for the law. Ken Paxton has neither,” the whistleblowers said in their statement. “The day will come when Ken Paxton must testify under oath about his and his agency’s actions. Until then, we call on Ken Paxton to start telling the truth to the people of Texas.”

[…]

Many of what the whistleblowers call Paxton’s “misleading public statements” came during a Jan. 31 interview with conservative radio host Mark Davis about the attorney general’s race. In the interview, Paxton claimed the whistleblowers “didn’t come to him” and “didn’t explain” the issues they had with the behavior that led to their complaints. In a separate interview with conservative outlet Texas Scorecard this month, Paxton claimed the FBI had “infiltrated” his office to investigate him before the whistleblowers made their complaint.

But the whistleblowers said in their statement they approached Paxton multiple times about their concerns with his push to get involved in Paul’s affairs before reporting him to the FBI. Their whistleblower lawsuit details specific dates when the whistleblowers individually and as a group warned Paxton that his actions in legal matters related to Paul were unlawful.

They said they first reported their concerns to the FBI on Sept. 30, 2020 after they could not convince Paxton to follow the law.

“We had no previous contact with the FBI before that date and believe this was the first time the FBI became involved with the investigation of Paxton and his office,” they wrote in their statement released Monday.

The whistleblowers also took issue with Paxton’s comment on Davis’ show that “no one has ever disputed” an unsigned 374-page report generated by his office in August that exonerated him of the whistleblower’s allegations.

“This is false. Paxton’s self-exonerating report is directly disputed by the detailed allegations in the whistleblower lawsuit,” the statement read. “Unsurprisingly, Paxton’s report selectively ignored some of the most troubling allegations we reported to the FBI, like Paxton providing blatant political favors to a campaign donor – the same campaign donor who has admitted in sworn testimony to hiring a woman at Paxton’s behest, a woman with whom media reports reveal Paxton had an extramarital affair.”

The whistleblowers also blasted Paxton for accusing them of committing crimes in the Davis interview, calling his accusations “ridiculous.”

“We confronted Ken Paxton about his and his agency’s corrupt and criminal conduct, and, when he would not abide by the law, we reported him to the FBI,” they said in their statement. “Paxton is under criminal investigation, not the whistleblowers.”

Paxton also told Texas Scorecard that he still does not know the specific allegations against him. The whistleblowers said the allegations against him are clearly spelled out in their lawsuit and include: bribery, tampering with government records, obstruction of justice, harassment and abuse of office.

See here for the latest installation of the Paxton whistleblower lawsuit saga, in which he tries to get the Supreme Court to wipe the slate clean, and here and here for the incredible self-exoneration report. If only the world worked this way for all of us! (“I conducted a thorough investigation into the allegations against me, honey, and I can confirm that I did in fact take the garbage out last night.”) I realize that I am a bitter, shriveled husk of a man, but nothing on this earth will give me more joy right now than seeing the FBI perp-walk Paxton out of his office. We all do what we need to do to get through the day. The Chron has more.

Paxton asks Supreme Court to toss that pesky whistleblower lawsuit

Jan 9th, 2022

by Charles Kuffner.

Comments are off for this post

Same argument, different court. Either Ken Paxton can be held accountable, or he gets a free pass to do whatever he wants.

Best mugshot ever

Texas Attorney General Ken Paxton has asked the Texas Supreme Court to toss out a whistleblower lawsuit by four former officials who say they were improperly fired after accusing Paxton of accepting bribes and taking other improper acts.

Paxton told the court that his agency “enjoys … the right to fire its employees — especially employees whose political appointments require they act on behalf of the duly elected Attorney General — at will.”

Paxton also argued that he can’t be sued because the Texas Whistleblower Act was intended to protect government employees from on-the-job retaliation by another public employee.

“The Attorney General is not a ‘public employee,'” said the appeal, filed Wednesday and made public Thursday. “Like the Governor, the Lieutenant Governor, and members of this Court, he is an elected officer, chosen by the people of Texas to exercise sovereign authority on their behalf.”

Paxton made similar arguments before the Austin-based 3rd Court of Appeals, but that court allowed the lawsuit to continue, ruling in October that the whistleblower act protects government workers from being fired for making “a good-faith report of illegal conduct … by the employer.”

Interpreting the act to exclude elected officials as employers would create a substantial loophole that runs counter to the law’s purpose of improving transparency and accountability, the 3rd Court ruled.

[…]

In his appeal to the Texas Supreme Court, Paxton characterized the complaints as matters involving policy disagreements — not a good-faith report of potential crimes as required by the whistleblower act.

“Plaintiffs were political appointees of the Attorney General who were dismissed from their posts following several policy disagreements. These disagreements each regarded duties well within the Attorney General’s authority, such as whether to retain outside counsel, issue a legal opinion, investigate potentially criminal acts and intervene in pending litigation,” the appeal said.

Paxton urged the all-Republican Supreme Court to reject the whistleblowers’ “vague, conclusory and speculative allegations,” saying they do not constitute a good-faith report of wrongdoing.

Lawyers for the whistleblowers will have the opportunity to respond to Paxton’s appeal in the coming weeks.

See here for the previous update. Paxton made the same argument to the Third Court, while also arguing that none of the whistleblowers had actually accused him of a crime, which meant they weren’t really blowing the whistle. I’m sure the plaintiffs will mostly repeat their earlier arguments as well. As for what the Supreme Court will do, or when they might do it – I for one will not be shocked if they wait until after the election – your guess is as good as mine. Reform Austin and KVUE have more.

Third Court rejects Paxton attempt to kill whistleblower lawsuit

Oct 23rd, 2021

by Charles Kuffner.

Comments are off for this post

Good.

Best mugshot ever

A state appeals court found Thursday that former deputies of Attorney General Ken Paxton who were fired after accusing the Republican official of abusing his office are protected under the state’s whistleblower law, allowing their lawsuit against Paxton to proceed.

Paxton’s lawyers had argued in court that he’s exempt from the Texas Whistleblower Act because he’s an elected official, not a public employee. But the court upheld a previous lower court decision that denied Paxton’s attempt to dismiss the case.

In its opinion, Texas’ 3rd Court of Appeals rejected the attorney general’s interpretation of the Texas Whistleblower Act, “which would have the effect of stripping whistleblower protections from employees who might report misconduct by the thousands of elected officials throughout the State — particularly by those who direct and lead the agencies of this State.”

[…]

In its opinion, the court wrote that the former employees “sufficiently alleged illegal conduct by their employing governmental entity as contemplated by the Act” and disagreed with Paxton’s characterization of the whistleblower law, writing that while “Texas is an employment-at-will state,” the act “provides an exception to that general rule.”

“Although loyalty and confident are important considerations in employment matters,” it wrote, “the Act provides that a State employer cannot fire an employee because he reports illegal conduct by the employer, even when it is that act of reporting that causes the employer to lose confidence or feel the employee lacks loyalty.”

See here for the previous update, and here for a copy of the ruling. The justices seemed pretty skeptical of Paxton’s argument at the hearing, so this is no surprise. Paxton could ask for an en banc hearing or he could appeal to the Supreme Court. The former means another couple of months that the lawsuit is on ice, but the odds of success are low. The latter is more likely to get a favorable ruling for Paxton, but if he loses he’s out of options and we move on to the next phase. I’m guessing he would rather avoid discovery, because it seems very likely that a weasel like Paxton has stuff to hide, so we’ll see if he decides to draw it out or not. Maybe, if we’re very lucky, we’re a step closer to Ken Paxton facing a bit of accountability for once in his life. The Chron has more.

Appeals court appears skeptical about Paxton’s whistleblower defense

Sep 23rd, 2021

by Charles Kuffner.

1 comment

As well they should be.

Best mugshot ever

A panel of Texas 3rd Court of Appeals justices expressed skepticism of an argument from Attorney General Ken Paxton’s lawyers on Wednesday that he is exempt from the state’s whistleblower act because he’s not a public employee and a case against him should be thrown out.

Former Paxton deputies in the Office of the Attorney General claim in a whistleblower lawsuit that they were fired for reporting alleged crimes by Paxton to law enforcement. Paxton’s lawyers are trying to get the case dismissed and asked the appeals court to throw out the case on the grounds that Paxton is not subject to the whistleblower law. A lower court denied Paxton’s motion to dismiss the case in March.

Barely a minute into oral arguments, Justice Chari L. Kelly began questioning Solicitor General Judd E. Stone II, who is representing Paxton in the suit.

“Isn’t the action of every employer at the OAG’s office an action by the employee governmental agency?” Kelly said.

Justice Gisela D. Triana questioned Stone’s argument that all elected officials are exempt from the whistleblower law and Chief Justice Darlene Byrne asked whether his interpretation would give Texas Supreme Court justices immunity from sexual harassment claims from their employees.

Stone said employees filing sexual harassment claims would have other avenues for relief outside the whistleblower law, but argued that the attorney general as an elected official cannot be sued under the law, which covers public employees, appointed officials and governmental entities.

[…]

Stone argued that barring the attorney general from firing employees when they disagree with legal positions or have lost his trust would be an infringement on the elected official’s power.

But Kelly questioned that argument and nodded to claims by the whistleblowers’ lawyers that Paxton is a public employee because he receives checks from the state and participates in its retirement system, and that he acts as the entity because he is its titular head.

“If he can go in and change any decision internally … If he truly has the power to have the last say on anything that comes out of the agency. How is he not the agency?” she asked.

Stone said the justices should interpret the law as it was written, which did not include elected officials in the text of those who can be sued on whistleblower claims.

But Joe Knight, who argued for the whistleblowers’ lawyers, blasted the idea that the Legislature wrote a statute meant to ensure public employees complied with the law and then exempted elected officials without explicitly saying so. He said the drafting of the law in such a way would be “strange and unlikely,” and said the “Legislature does not hide elephants in mouseholes.”

In briefings to the court, the whistleblowers’ lawyers said when lawmakers intend to exempt elected officials from being labeled as public employees, they do so in the text of the law. The Texas Whistleblower Act does not.

The whistleblowers’ lawyers said exempting the attorney general would rob the law of its purpose to protect public employees reporting wrongdoing by government entities.

Stone also argued in briefs that the former officials did not make the reports to law enforcement authorities required to invoke whistleblower protection, and that even if they had, they reported only potential crimes, not crimes that had actually happened.

The whistleblowers’ lawyers attacked that argument, saying their clients reported their concerns to the Travis County District Attorney’s Office, the FBI, the Texas Rangers and the attorney general’s human resources office.

The lawyers also said their clients believed Paxton had already abused his office, tampered with government records, taken bribes and obstructed justice through his interactions with Paul when they brought their concerns to law enforcement.

See here, here, and here for some background. It must be noted that all three appellate court justices are Democrats, so their opinions will carry limited weight before the Court of Criminal Appeals, no matter how ridiculous Paxton’s arguments are. That’s just how it is, I don’t make the rules. No indication when the court may rule, but the initial suit was filed last November, the motion to dismiss was denied in March, and the appeal to the Third Court was made in June, so as far as that goes, we’re moving at a decent pace.

More on the Paxton self-exoneration report

Aug 26th, 2021

by Charles Kuffner.

1 comment

More and more ridiculous.

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Texas Attorney General Ken Paxton’s office refuses to release the names of the authors or the taxpayer cost of the internal report published Tuesday that concluded that whistleblowers’ accusations that Paxton broke the law were unfounded.

Yet the body of the report indicates that a key author was Paxton’s top deputy, First Assistant Attorney General Brent Webster, who was hired on Oct. 5 — the same day the internal investigation was initiated and just days after seven senior officials at the agency had notified Paxton that they had reported him to law enforcement.

Webster, whose annual salary was $265,000 as of July, was hired to replace Jeff Mateer, one of the whistleblowers, who resigned Oct. 2. Webster did not respond to a request for comment Wednesday.

[…]

An AG spokesman, Alejandro Garcia, said Tuesday that the report was written by a group of lawyers who “were not involved in the underlying matters that were the subject of the report.” He did not respond to questions about why the office was declining to provide their names.

In response to an open records request by Hearst Newspapers, the attorney general’s office said it cannot calculate the cost to taxpayers of the 10-month internal investigation because the authors belong to the executive administration and do not keep timesheets. Lauren Downey, the agency’s public information coordinator, would not name the authors, saying the office did not have a list.

Under the General Appropriations Act, the state’s biennial budget, the office is required to “continue an accounting and billing system by which the costs of legal services provided to each agency may be determined.”

The internal report contains multiple references to Webster, including one instance in which Webster told the Travis County District Attorney’s office attorneys that he was conducting an investigation in an Oct. 8 email.

“General Paxton recently appointed me to be his First Assistant Attorney General,” he wrote. “One of my tasks is to collect our agency documents and other evidence to determine what has transpired internally with our agency … If you have any documents or email communications you are willing to release to me that would assist me in understanding what has transpired, I would appreciate it.”

Webster’s name also appears in annotations on various documents included in the report, and he is described at least five times in the report as someone asking questions of others at the agency or collecting information about whistleblower-related issues.

See here for the background. We’re not going to tell you who wrote this thing, we’re not going to tell you how much it cost to write it, and you’re just going to have to take our word on everything because we’ve established such a long track record of truthfulness and reliability. I think that about covers it.

Stop investigating yourself, you’ll go blind

Aug 25th, 2021

by Charles Kuffner.

2 comments

There’s not enough snark on the Internet for this.

Best mugshot ever

Texas Attorney General Ken Paxton’s office on Tuesday released an internal report that found that Paxton did not accept bribes and did not misuse his office to benefit his friend and campaign donor Nate Paul, despite a continuing FBI investigation of the matter.

The office did not immediately respond to questions about who completed the unsigned report, or why the office handled the matter internally, rather than hiring outside investigators to avoid a possible conflict of interest.

The bribery and abuse of office accusations were made by eight of Paxton’s top aides last fall. Four of the whistleblowers have sued Paxton for retaliating against them for reporting him to law enforcement.

“The takeaway from this internal report is that, although Ken Paxton remains under active federal investigation, the people who still work for Paxton say he did nothing wrong,” the whistleblowers’ attorneys said in a joint statement. “Of course, the one-sided internal report is full of half-truths, outright lies, and glaring omissions.”

The attorneys added that it was notable that “whoever in Paxton’s office wrote this report was not willing to put their name on it.”

The “report”, if you can even call it that, is here. The only appropriate response to this is guffaws and mockery, so I’ll start with my own.

.
Did they also recommend that he be named the next host of “Jeopardy”?

— kuff (@kuff) 1:57 PM – 24 August 2021

.
Didn’t See That Coming: Ken Paxton Concludes Ken Paxton Not Guilty of Any Crimes #txlege

Read more: http://texasdemocrats.org/media/didnt-see-that-coming-ken-paxton-concludes-ken-paxton-not-guilty-of-any-crimes/

— Texas Democrats (@txdemocrats) 2:19 PM – 24 August 2021

OK, fine, a little sober skepticism is all right, too.

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An internal investigation into allegations of bribery and misuse of office against AG Ken Paxton concludes that the AG broke no laws.
I’m still reading it, but one section strains my confidence in this document.
https://texasattorneygeneral.gov/sites/default/files/images/admin/2021/Press/Internal%20Report.pdf
A thread:

— Chuck Lindell (@chucklindell) 9:56 AM – 24 August 2021

You can read the rest yourself. Honestly, this is one of those situations where the headline to the story tells you all you need to know. Save the self-serving BS for the appellate court and quit insulting our intelligence, please. The Trib, which has quite a few details, has more.

Whistleblowers respond to Paxton’s appeal brief

Jun 24th, 2021

by Charles Kuffner.

Comments are off for this post

That title is a dry way of saying that they basically accused him of lying in his filing to the 3rd Court of Appeals.

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A group of former top aides to Texas Attorney General Ken Paxton reiterated in a court filing this week that they believe Paxton committed crimes while in office, and suggested that Paxton is intentionally mischaracterizing witness testimony in their whistleblower case against him for political reasons.

The aides are taking issue with a brief and a press release issued on June 2 where Paxton’s lawyers asked the 3rd Court of Appeals to throw out the case four aides filed against the state’s top lawyer in which they allege he fired them for reporting his alleged illegal behavior to federal and state authorities. Paxton, who has denied the charges, said he fired aides last year because they had gone “rogue” and made “unsubstantiated claims” against him.

Paxton’s lawyer said in June that in a trial court hearing on March 1, former First Assistant Attorney General Jeff Mateer would not say he specifically saw Paxton commit a crime, but only that he had “potential concerns” about Paxton’s dealings with real estate developer Nate Paul. Paul is a political donor and friend of Paxton who the whistleblowers allege Paxton helped with his legal issues in exchange for personal favors.

Paxton’s lawyers argued that the appeals court should overturn a trial court decision denying the Office of the Attorney General’s plea to dismiss because the court doesn’t have the jurisdiction to hear the case.

But in a new brief filed on Monday by the whistleblowers’ lawyers, they argue Paxton’s lawyers took the exchange they cited out of context to argue Mateer never saw Paxton commit a crime. They said Mateer’s comment was in response to a specific question about whether any employees raised concerns about Paxton’s behavior in June 2020, three months before former employees reported Paxton’s behavior to law enforcement.

“This claim distorts Mateer’s testimony,” the brief states. “In fact, Mateer testified unequivocally that he believed at the time of Appellees’ FBI report—and still believes today—that Paxton committed crimes, including abuse of office and bribery.” They also point out that Mateer signed a letter on Oct. 1, 2020 that alerted the attorney general’s office that the whistleblowers had reported Paxton’s behavior to the FBI, further proving Mateer believed Paxton had violated the law.

[…]

The whistleblowers’ attorneys say the AG’s office did not accurately explain to the appeals court that Mateer’s potential concerns were specifically in response to a question about Paxton and Paul’s relationship in June 2020.

“OAG took even greater license in its [June] press release, predicting victory because its brief shows that Mateer “swore under oath that Paxton committed no actual crimes,” the lawyers wrote in a footnote in the brief. “Given the … OAG’s mischaracterization of what Mateer ‘swore under oath,’ perhaps this portion of OAG’s brief was written for an audience other than the justices of this Court.”

A lawyer in the case told The Texas Tribune they believed the press release was written for Paxton’s supporters and Texas voters, rather than to make a legal argument.

See here for the previous update. That last paragraph is both shocking and completely on brand. A press release is of course not the same thing as a legal filing, but in general judges tend to take a dim view of lawyers misrepresenting the facts. If what the plaintiffs are saying here is accurate, I would think that the Third Court justices might have some sharp words for Team Paxton. And yes, as noted in the story, that press release came out just before P Bush officially launched his challenge against Paxton. Totally coincidental, I’m sure.

The lawyers asked the 3rd Court of Appeals to consider this appeal without hearing oral arguments. If the court decides to hear arguments, the aides requested it happen as quickly as possible.

The four former aides also laid out in detail in the filing the specific instances where they believe Paxton broke the law.

We’re familiar with the outline of the charges the plaintiffs have made against Paxton, but go ahead and read on if you want to remind yourself. The reasons behind Paxton’s bizarre, corrupt actions are still unclear – one assumes that financial reward was part of it, and if the allegations about Paxton’s affair are true that likely was a factor as well – but there’s no good way to spin them if they happened as alleged. It’s hardly bold to say that Ken Paxton has no integrity, but it’s still appalling to see the things he is said to have done. And if the Third Court agrees that oral arguments aren’t needed, that would be pretty amazing as well.

Paxton appeals to 3rd Court to dismiss whistleblower lawsuit

Jun 3rd, 2021

by Charles Kuffner.

1 comment

Next stop on the train.

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In an 85-page brief filed Tuesday with the 3rd Court of Appeals, Paxton’s lawyers argue that under state law, a whistleblower must believe someone has broken the law, but the aides only reported that “they expected laws might be violated.” As a result, they argue, the court should overturn a trial court decision denying the Office of the Attorney General’s plea to dismiss because the court doesn’t have the jurisdiction to hear the case. The lawyers have repeatedly argued Paxton cannot be sued under the Whistleblower Act because he is not a public employee.

This appellate brief was made public hours before Texas Land Commissioner George P. Bush is expected to announce at an event that he will run against Paxton for attorney general. Bush has made the allegations of Paxton’s former aides and separate felony securities fraud charges against Paxton a line of attack as he prepares to announce his run.

In particular, the brief states that at a March 1 hearing on the case, one of the whistleblowers who is not a plaintiff in the suit, former First Assistant Attorney General Jeff Mateer, would not specifically state that he saw Paxton commit a crime.

“Instead, he explained he ‘had potential concerns,’ and that he and his colleagues concluded that ‘had they gone down this path, would be in a position to assist and/or cover up with what … would be a crime,’” the brief states.

“… Speculative concerns about potential future illegal activity do not fall within the [Whistleblower] Act’s narrow scope,” it states.

Mateer did not immediately respond to a request for comment. In a statement, Carlos Soltero, the attorney representing appellee David Maxwell, said the four aides are “far from ‘rogue.'”

“They did exactly what Texans would hope their public servants would do,” Soltero said. “They reported corruption to the FBI and the Texas Rangers. Now, after Paxton lost his first appeal, lost at the trial court again, he brings yet another appeal to avoid testifying like he has something to hide.”

[…]

The brief argues the plaintiffs have not provided specific proof of a bribe by Paxton or Paul, but only speculated they “might” have had business dealings.

“None of these allegations of perfectly lawful conduct come close to making out a claim for bribery,” the brief states.

See here for the update. What Paxton is claiming is that these attorneys, his former top assistants, that he fired do not have any grounds to sue him under the Whistleblower Act because they didn’t have proof that he was committing a crime at the time. They only had serious concerns that he was committing a crime, and that’s not good enough. I guess the average news consumer doesn’t have the wherewithal to understand the finer points of the legal arguments being made – in the end, if he wins he’s just going to claim he was being railroaded by a bunch of whiny liberal losers anyway – but if one tries to parse the lawyerese, it sure doesn’t paint him in the most flattering light. This isn’t a full-throated assertion of innocence, it’s a “well, actually, you can’t prove any of that, so I win”. You play the hand you’re dealt, I suppose. We’ll see what the Third Court makes of it.

Paxton whistleblower lawsuit can proceed

Mar 15th, 2021

by Charles Kuffner.

1 comment

First step in a long road.

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The 3rd Court of Appeals on Friday denied a petition from Texas Attorney General Ken Paxton’s office to stop a trial court hearing in a suit filed by whistleblowers who claim they were wrongfully terminated after reporting Paxton to law enforcement for alleged bribery and other public corruption.

Attorneys for the office did not immediately respond to a request for comment, but they are likely to appeal the decision to the Texas Supreme Court.

“We were pleased, but not surprised, by the 3rd Court’s ruling,” said Carlos Soltero, who represents David Maxwell, the agency’s former director of law enforcement who was fired in November. “This brings us closer to being able to move forward and present our case on the merits, which we are looking forward to doing.”

[…]

A Travis County trial court on March 1 heard a motion by Paxton’s attorneys to dismiss the case. When the judge left the issue under advisement and continued on to entertain an injunction hearing in the case, Paxton’s attorneys appealed, arguing she needed to first rule on the motion to dismiss before proceeding. The appellate court temporarily stayed all further action in the case; the stay was lifted with Friday’s order.

We know about the whistleblower lawsuit. Paxton’s response to the charges against him are that the Office of the Attorney General is not subject to the state’s whistleblower laws and thus this lawsuit is moot and should be dismissed. Travis County judge Amy Clark Meachum denied the motion to dismiss the lawsuit on March 1, and when she attempted to proceed to the next phase of the suit, which involved hearing from the plaintiffs, Paxton’s lawyers objected:

Bill Helfand, an outside lawyer hired to represent the agency in the whistleblower case, argued that the motion to dismiss raised questions about the appropriateness of the lawsuit that needed to be addressed before any other matters could be considered.

Meachum noted that she had made no ruling that could be appealed, but Helfand insisted that “diving into the substantive issues” of the case was no different from issuing a ruling denying the motion to dismiss, allowing him to file an appeal that should have ended matters until the 3rd Court of Appeals could rule.

Meachum disagreed and opened the second hearing, where for the first time a court heard from two of those who accused Paxton of misconduct.

The first was Jeff Mateer, the former second-ranking executive at the attorney general’s office who resigned Oct. 2, two days after joining six other top executives in telling FBI agents that he believed Paxton was misusing the powers of his office to help Austin businessman Nate Paul.

Mateer, a lawyer, said he stood by his accusations against Paxton, but when he was asked to discuss them, he was interrupted by repeated objections from Helfand, who said providing details would violate attorney-client privilege and get into internal office deliberations that could not be discussed in court.

Mateer also testified that the two executives who want to be reinstated to their jobs — David Maxwell, former director of the agency’s Law Enforcement Division, and Ryan Vassar, former deputy attorney general for legal counsel — had performed their jobs well when he ran the office.

The court also heard from Vassar, who was fired in November and testified that he had received no criticism of his job performance or reprimands before speaking to FBI agents last year. Vassar was in the early stages of his testimony and was set to resume Tuesday morning.

The Third Court of Appeals initially ruled for Paxton and halted any further testimony until it issued a decision. This was the decision, which will now be appealed to the Supreme Court. Remember how every little thing in the securities fraud case against Paxton got appealed all the way up to the Court of Criminal Appeals before anything could be done, which is why that case is more than five years old now? Yeah, that’s the likely situation here as well. The FBI can’t arrest his ass fast enough.

Has Ken Paxton been lying about his travel schedule?

Mar 2nd, 2021

by Charles Kuffner.

Comments are off for this post

Would anyone be surprised if he had been?

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When the media reported that Texas Attorney General Ken Paxton had flown to Utah with his wife in the middle of the state’s power crisis last week, Paxton called it a business trip that had been planned in advance.

Now a group of whistleblowers from his office who sparked an FBI investigation of Paxton are casting doubt on Paxton’s explanation.

In court records filed Friday, the whistleblowers say the attorney general had told a Travis County judge he could not appear at a hearing in their case because he was scheduled to be in Austin on Feb. 18 for a House appropriations committee hearing. The committee later canceled the hearing because of the state’s weather disaster.

Instead, the spokesman for Utah Attorney General Sean Reyes said Paxton met with Reyes on the afternoon of Feb. 19 and again on Feb. 21, as first reported by The Dallas Morning News. Paxton has not said when he arrived in Utah; he returned on Feb. 23.

“This begs the question: did Paxton pre-plan his Utah trip with plans to skip his legislative testimony, the hearing before this Court, or both?” the whistleblowers’ attorneys wrote in a filing Friday. “Or was Paxton simply lying to Texans about his trip to Utah having been pre-planned?”

See here for background on the Paxton travel situation, and here for the most recent update about the whistleblower lawsuit. It’s nice having a group of people who know Ken Paxton and his bullshit inside and out who are so motivated to call him on it. Other than adding to the public store of data about Ken Paxton’s dishonesty and lack of character, it’s not clear to me what effect this has on that lawsuit. The reason for asking to move the hearing was presumably legitimate, and for sure it would not have been heard on the original date once the committee meeting was canceled. I expect this is just to impugn Paxton’s credibility in the lawsuit, and to that extent it works as intended. The dude just can’t help himself. Reform Austin has more.

Quid pro Paxton

Feb 12th, 2021

by Charles Kuffner.

Comments are off for this post

How tawdry. And I can’t wait to hear more.

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Late last year, Texas Attorney General Ken Paxton fired multiple senior aides who accused him of accepting a bribe. A court filing obtained by The Texas Tribune reveals for the first time what four of those aides believe Paxton received in exchange for helping a donor with his business affairs.

An updated version of a lawsuit filed by the four whistleblowers claims that Austin real estate developer Nate Paul helped Paxton remodel his house and gave a job to a woman with whom Paxton allegedly had an affair.

In return, the aides allege, Paxton used his office to help Paul’s business interests, investigate Paul’s adversaries and help settle a lawsuit. The claims in the filing provide even more details about what the former aides believe Paxton’s motivations were in what they describe as a “bizarre, obsessive use of power.”

“Some of Paxton’s actions directing the [Office of the Attorney General] to benefit Paul were criminal without regard to motive,” the amended petition reads. “Others were so egregious and so contrary to appropriate use of his office, that they could only have been prompted by illicit motives such as a desire to repay debts, pay hush money, or reciprocate favors extended by Paul.”

[…]

The latest filing is vague on many details. It says that Paxton purchased a home worth around $1 million in the Tarrytown neighborhood of Austin in 2018. In 2020, the filing says, the house underwent renovations, “although permitting records in Travis County could not be located.”

“In mid-2020, some of the Plaintiffs received information suggesting that Nate Paul, either personally or through [a] construction company he owns and controls, was involved in the project,” the lawsuit states.

The filing doesn’t describe the nature of Paul’s alleged involvement or how they received the information.

The whistleblowers for the first time also allege that Paxton may have helped Paul because the developer gave a job to a woman with whom he had an extramarital relationship. The lawsuit notes that the woman had no previous experience in the construction industry, “much less managing construction projects.” The woman, who the Tribune is not naming because she is not a public figure, did not return a call for comment.

See here, here, and here for some background. It’s important to remember that what have here are allegations, not evidence. This could all fall apart in court, if it ever makes it that far. Which doesn’t mean we can’t enjoy it for what it is, and hope that it all makes Paxton SO MAD. We just need to maintain perspective for the time being.

Ken Paxton couldn’t be more on brand if he tried

Jan 15th, 2021

by Charles Kuffner.

1 comment

News item: Texas laws protecting whistleblowers don’t apply to Attorney General Ken Paxton, his agency argues in bid to quash lawsuit. Who among us didn’t already know that Ken Paxton doesn’t think the law applies to him?

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The Texas Attorney General’s Office is attempting to fight off efforts by four former aides to take depositions and issue subpoenas in their lawsuit claiming they were illegally fired after telling authorities they believed Attorney General Ken Paxton was breaking the law.

The agency is arguing that Paxton is “not a public employee” and thus the office cannot be sued under the Texas Whistleblower Act, which aims to protect government workers from retaliation when they report superiors for breaking the law.

Four former Paxton aides claim they were fired in retaliation for telling authorities they believed Paxton had done illegal favors for a political donor, Austin real estate investor Nate Paul. The whistleblowers’ allegations have reportedly sparked an FBI investigation.

In seeking reinstatement and other financial damages, the whistleblowers want to question Paxton himself under oath, as well as Brent Webster, his top deputy at the attorney general’s office, and Brandon Cammack, a Houston lawyer Paxton hired to investigate complaints made by Paul in what aides say was a favor to the donor. They also issued subpoenas to Paul’s company and a woman alleged to have been Paxton’s mistress.

[…]

The whistleblowers sought to question Paxton, Webster and Cammack under oath as soon as next week. Michael Wynne, an attorney for Paul, accepted the subpoenas for both World Class and the woman, court documents show. She could not be reached for comment and Wynne did not return a request for comment.

But in a filing last week, the attorney general’s office asked the judge to quash the depositions and the subpoenas, and prevent the whistleblowers from conducting any discovery.

“The OAG is doing everything they can muster to avoid having Ken Paxton answer basic questions under oath about the facts,” said Carlos Soltero, an attorney for one of the whistleblowers.

Instead, the agency said, the Travis County judge should dismiss the case entirely on procedural grounds.

The Texas Whistleblower Act — the basis for the lawsuit — is designed to provide protection for public employees who, in good faith, tell authorities they believe their superiors are breaking the law. But the attorney general’s office claims the agency cannot be sued under the law because Paxton is an elected official.

“The Attorney General is neither a governmental entity nor a public employee and, thus, the Whistleblower Act does not extend protection to reports of unlawful conduct made against the Attorney General personally,” the agency argued. “The Act does not apply… for reports made about actions taken personally by the elected Attorney General.”

Comparing Paxton’s authority to that of the president of the United States, the agency claimed that the attorney general had the right to fire the employees, despite their claims of retaliation.

Under that theory, “he’s saying that elected officials aren’t accountable” for violating the Whistleblower Act, said Jason Smith, a North Texas employment attorney who has handled whistleblower cases.

“It appears that General Paxton is trying to get off on a technicality that doesn’t exist,” he added.

See here and here for the background. I don’t have anything clever to add here, just that I hope this defense is as successful as his lawsuit to overturn the Presidential election was.

Another way Ken Paxton is costing you money

Jan 6th, 2021

by Charles Kuffner.

Comments are off for this post

He’s something else, this guy.

Best mugshot ever

Texas may pay tens of millions of dollars to outside attorneys hired to handle a major lawsuit against Google — money the state did not plan to spend before a scandal enveloped Texas Attorney General Ken Paxton this fall.

That’s under agreements signed last month with outside lawyers based in Chicago, Houston and Washington, D.C., including high-profile plaintiffs’ attorney Mark Lanier and the law firm Keller Lenkner, who will lead Texas’ multi-state antitrust lawsuit against Google.

The lawsuit came out of a Texas-led investigation launched more than a year ago. But until fall 2020, top agency staff intended to handle the case internally, instead of paying costly outside lawyers, a former senior Paxton aide told The Texas Tribune. The Associated Press first reported the timeline on Tuesday.

Jeff Mateer, who led the attorney general’s office for years as Paxton’s top deputy, said that when he resigned in October, the agency had no intention of hiring outside lawyers. Darren McCarty, another senior attorney, was leading an internal team on the case.

“Darren was more than able to do it,” Mateer told the AP.

But Mateer and McCarty were among the eight whistleblowers who left the agency after telling law enforcement they believed Paxton broke the law by doing favors for a political donor. Both resigned last fall, part of a notable exodus of the agency’s top staff.

The whistleblowers’ allegations have reportedly sparked an FBI investigation, but Paxton has insisted that the agency’s work has not been interrupted by the criminal investigation of him. Still, the contracts for the Google lawyers are an early indication of what cost taxpayers may bear for the latest drama surrounding Texas’ embattled attorney general.

The attorney general’s office will ask the Legislature for $43 million to pay the outside lawyers, according to a contract obtained by The Texas Tribune. If lawmakers do not grant that money — which may be a tall order during what’s expected to be a tight budget debate — the outside attorneys will be paid solely out of whatever monetary damages are recovered from Google, dollars that would have otherwise flowed into state coffers.

[…]

The expensive outside counsel contracts were inked in December, the same day the case was filed in federal court. The law firms were brought on only after the agency staff leading the probe fled the attorney general’s office in the wake of a fresh Paxton scandal.

Lanier told the Tribune he met with Paxton in Austin in November to discuss the possibility of working on the case, and emphasized that his team’s work was not intended to be “a big financial bonanza for the Lanier firm,” but rather to force a major restructuring of Google.

Lanier has given political contributions to Paxton, among a number of other top Texas officials.

The case, which comes alongside a number of other major government lawsuits against Google and other tech giants, takes aim at the company’s advertising practices.

Though it’s not yet clear exactly how much Texas could end up losing to the outside attorneys, it could be a massive figure. The outside lawyers’ contingency fee will either be based on an hourly rate equation — which could net the most senior attorneys as much as $3780 per hour — or be calculated as a percentage of the total Google settlement, whichever is less.

See here for the last update on the latest Paxton scandal. I will try, at least for a moment, to be as objective as I can about this. Paying the fee up front is a hedge against having to cough up a much larger amount of a hypothetical future award or settlement agreement, not to mention the time and effort it will surely take to haggle over the proper cut of said award. Lawyers cost money, this is going to run into some bucks no matter how you slice it, may as well get some certainty.

On the other hand:

1) The plaintiffs may lose this lawsuit, or have it overturned or any award reduced on appeal. We’d also be splitting any award a couple dozen ways, so it would have to be pretty freaking big for the attorneys’ cut to be more than $43 million.

2) Any future award is just that, in the future, likely years in the future. $43 million bucks now is worth more than an equivalent amount in, say, 2027. This is why Lottery winners who get the up-front payout instead of the over-20-years payout get a lot less than the stated prize amount.

3) Not to put too fine a point on it, but we don’t have an extra $43 million lying around right now. Yeah, sure, Rainy Day Fund yadda yadda yadda, but we know how that works. And yeah, $43 million is couch money compared to the real budget, but what would you rather spend it on this biennium – Ken Paxton’s fancy outside attorneys, or vaccines and the people to administer them? I know where my money would go.

4) Again not to nitpick, but if Ken Paxton hadn’t been a fucking awful Attorney General, we wouldn’t be in this predicament right now. He drove off the senior staff who could have handled this in house. Every dollar that Texas loses out on as a result of this, either up front or down the line, is his fault.

So yeah, I’m a big No on paying the outside attorneys at this time. I’ll roll the dice on the future award being either sufficiently small that the contingency fee is a bargain compared to the $43 million, or so freaking enormous that who cares if the Lanier firm makes out like bandits. And maybe, just maybe, we can get a new Attorney General in 2022 and we can hire another good senior staff, and maybe take the case back from the outsiders. I’ll be very, very interested to see what the Republicans in the Legislature make of this.

Paxton denies whistleblower allegations

Dec 16th, 2020

by Charles Kuffner.

Comments are off for this post

Pretty standard response.

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The Texas attorney general’s office will pay outside counsel $540 an hour to defend the state agency against accusations that it was retaliating against top aides when it fired them just weeks after they reported their boss, Ken Paxton, to authorities for possibly breaking the law.

William Helfand, a Houston attorney with Lewis Brisbois Bisgaard & Smith LLP, will make $540 per hour for his work on the case while an associate attorney and a paralegal will make $350 and $215 per hour, respectively, according to a contract with the agency.

They filed the agency’s first official response Monday to a lawsuit filed by four of eight whistleblowers who left the agency after leveling the accusations. Paxton’s attorneys roundly rejected pages and pages of allegations of wrongdoing and retaliation in just a few brief sentences.

The agency “generally denies each and every claim and allegation” made by the whistleblowers, attorneys for the state wrote in the brief filing.

“Any action Plaintiffs allege to be an adverse employment action was the result of each Plaintiff’s own misconduct, lack of competence, and/or disloyalty to the Office,” the outside attorneys for the agency wrote.

Paxton is reportedly being investigated by the FBI over the allegations raised by the aides.

Separately, he has been under indictment since 2015 on felony securities fraud charges but has yet to stand trial amid side issues over venue and prosecutor pay. Notably, his defense team and political allies have loudly objected to the special prosecutors in the case making $300 per hour — far lower than the pay scale for the outside attorneys in the whistleblower case.

That point was not lost on Brian Wice, one of the special prosecutors, who said it was “ludicrous for Paxton to believe that a seven-year attorney, not to mention a paralegal, should be paid more for defending him than two lawyers with over 80 years of combined experience should be paid for prosecuting him.”

“And it is outrageous that the taxpayers of Texas will be obligated to pay the legal fees for defending Paxton’s alleged misconduct that has reportedly triggered an FBI investigation,” Wice added.

See here and here for some background. Even I recognize this as Basic Lawyering 101, nothing new or unusual to see here. Where it gets exciting is in discovery, where Paxton will have to start coughing up some documents. As for how much the defense attorneys are being paid, as a theoretical matter the office of Attorney General deserves competent representation in matters like this. But the same is very much true for the special prosecutors, who have had to deal with a huge amount of political interference on Paxton’s behalf just to get paid. Surely if Paxton’s defense attorneys are worth that kind of fee, then we ought to see Brian Wice and Kent Schaffer as relative bargains. At least if Paxton does eventually get busted by the FBI, it’ll be the feds paying for that trial. In this case, we know Ken Paxton is going to raise money off of his latest legal travails. If the plaintiffs win, he can damn well kick in some of that loot to pay for the defense of his misdeeds.

FBI serves subpoenas in Paxton case

Dec 12th, 2020

by Charles Kuffner.

Comments are off for this post

Quite the timing, no?

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Federal agents served at least one subpoena Wednesday on the office of Texas Attorney General Ken Paxton in an ongoing investigation into allegations that Paxton abused his authority by helping a friend and campaign donor.

Three sources confirmed to the American-Statesman and KVUE-TV that FBI agents delivered the request for information to the agency’s headquarters on West 14th Street. The sources did not immediately know how many subpoenas were issued or what information FBI agents sought.

Federal authorities are investigating claims by former top Paxton aides that he used his position to aid Austin investor Nate Paul, whose offices were raided by the FBI last year.

FBI spokeswoman Michelle Lee said Thursday that she could not comment, and the bureau has not publicly confirmed an investigation.

Paxton said in a statement Thursday evening: “At all times, as in every matter, I ask my staff only to search for the truth, wherever it leads. That’s my responsibility as Attorney General of Texas.”

The issuance of a federal subpoena on a state agency, and especially involving the state’s top attorney, is a highly unusual move that likely would have required higher level approval from the U.S. Justice Department.

You saw the tweet, now you see the story. We’ll know more when there’s more to be known. In the meantime, Paxton is building his brand with the sedition section.

But even as the investigation deepens, Paxton’s political star looks to be rising, at least on the right. In contesting the results of the election in Georgia, Pennsylvania, Michigan and Wisconsin, he has catapulted himself into the country’s biggest political news story — a settled election that the president continues to contest, now relying heavily on an unprecedented lawsuit that has drawn the involvement of nearly every state. On Wednesday, Paxton joined Lou Dobbs and Glenn Beck to talk about the case, which conservatives have cheered; on Thursday, he joined Trump for lunch at the White House.

It wouldn’t be the first comeback for the attorney general. He managed to hold on politically after a failed bid for Texas House speaker 10 years ago. And he was reelected as attorney general in 2018 despite the felony indictment that has dogged him for years.

In fact, the long-shot election case — which has become yet another high-stakes test of loyalty to the president — has played so well for Paxton that some are accusing him of filing it for his own benefit.

“It looks like a fella begging for a pardon filed a PR stunt rather than a lawsuit — as all of its assertions have already been rejected by federal courts and Texas’ own solicitor general isn’t signing on,” U.S. Sen. Ben Sasse, R-Neb., said.

Progressive groups have eagerly made similar accusations.

A spokesperson for Paxton dismissed the pardon speculation as “an absurdly laughable conspiracy theory” and said “this lawsuit is about preserving the integrity of our elections.”

[…]

It’s not hard to imagine Paxton filing such a lawsuit even under better personal circumstances. He has made himself a staunch Trump ally who plays up their relationship in public appearances and often greets Air Force One when it touches down in Texas. The two often line up in legal fights, and Paxton is frequently the first — or at least loudest — state attorney general to support a controversial Trump move, like a ban on travel from Muslim-majority nations.

Whatever Paxton’s intentions, the lawsuit has already had helped bring him back into the good graces of some prominent conservatives, and back into the spotlight — to tout his pro-Trump message, not to defend himself against serious criminal accusations. State officials who distanced themselves from Paxton or avoided speaking about the attorney general entirely have now emerged as cheerleaders for the lawsuit.

On his radio show this week, Beck asked Paxton about criticism that the attorney general filed the lawsuit to distract from his personal political problems — or in a bid for a presidential pardon.

“Look, for six years I’ve been fighting for what I thought was right,” Paxton responded. “I’m not gonna stop just because people have assaulted me. … No matter what they accuse me of, no matter what they want to do to me — I’m here to do my job.”

He’s got the victim rhetoric down, you have to give him that. The story suggests that even if Paxton gets the pardon he’s so clearly seeking, the current investigation could be done at the state level, if the Travis County DA wanted to pick it up. Let’s not get ahead of ourselves here. Keep your eye on the game Paxton is playing right now.

Of course Nate Paul’s attorney donated to Ken Paxton

Dec 5th, 2020

by Charles Kuffner.

Comments are off for this post

I mean, duh.

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Several weeks after Texas Attorney General Ken Paxton made the unusual move of intervening in a civil lawsuit involving his friend and campaign donor Nate Paul, Paxton received a $25,000 donation from the law firm hired by Paul in the case, records show.

Involving his office in the civil case was just one of a handful of apparent interventions by Paxton on behalf of Paul that troubled the attorney general’s top aides, leading seven of them to report Paxton to law enforcement for potential corruption charges in early October, including bribery and abuse of office. Those accusations are now being investigated by the FBI.

A political action committee for the Austin-based law firm Hance Scarborough — the HS Law PAC — gave Paxton donations of $20,000 and $5,000 on June 30, records show.

Neither the attorney general’s office nor a campaign spokesman for Paxton responded to requests for comment. Paxton has denied wrongdoing.

Reached Tuesday, Paul’s former attorney Terry Scarborough said he “did not know anything about our PAC contributions” because he is not the managing partner of the firm and declined to comment. Scarborough withdrew from the still-pending civil case this fall and no longer represents Paul’s business entities.

Managing partner Jay Stewart, who is trustee of the PAC, said it operates independent of the firm’s litigation section and that the donation had nothing to do with any cases.

“That was a contribution that we routinely make,” Stewart said. “I wasn’t even aware of that piece of litigation that Mr. Scarborough worked on.”

He said the firm, which represents clients in matters relating to regulatory and public policy law, has been giving to the attorney general’s office for years, even before Paxton took office. The firm has also donated to Paxton since his days as a Texas legislator, he said.

State campaign finance data shows the PAC last donated to Paxton in 2014, a total of $10,000 in the runup to Paxton’s first election.

Still, the donation this past summer marks the second financial tie, albeit an indirect one, between Paul and Paxton to come to light. The Houston Chronicle first reported in October that Paul had donated $25,000 to Paxton in 2018 for his re-election campaign.

There’s almost too much backstory on this to read if you need to catch up, but this and this will get you started. There are two obvious facts here to state. One is that contributions like this are in fact routine and common and under normal circumstances would not merit any scrutiny. You can feel about that however you want to feel about it. The second is that Ken Paxton deserves zero benefit of the doubt at this point. These contributions by themselves are perfectly legal and don’t mean anything, and yet in the context of the larger story they’re yet another piece of a big puzzle. The picture that puzzle represents is already quite clear.

The last whistleblower

Nov 27th, 2020

by Charles Kuffner.

2 comments

Nothing like a fully cleaned house.

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The Texas attorney general’s office has fired the last remaining whistleblower who alleged Ken Paxton broke the law in doing favors for a political donor — just days after aides had sued the agency alleging they suffered retaliation for making the report.

Deputy Attorney General for Legal Counsel Ryan Vassar — who had already been placed on paid leave — was fired Nov. 17, according to internal personnel documents obtained by The Texas Tribune, making him the fifth whistleblower to be fired from the agency in less than a month. The three others who reported Paxton to law enforcement have resigned.

On Nov. 12, Vassar and three of his former colleagues filed a whistleblower lawsuit against the Texas attorney general’s office, claiming they had suffered retaliation after they told law enforcement they believed Paxton broke the law by using the agency to serve the interests of a political donor and friend, Nate Paul.

Joseph Knight, Vassar’s attorney in the lawsuit, said the justification Vassar was given for his termination amounted to “made-up, nonsense reasons” — and that he believes the firing was an act of retaliation. Vassar was hired by the agency in 2015.

Neither the attorney general’s office nor Ian Prior, a political spokesman for Paxton, returned requests for comment on why Vassar was terminated, though Prior has said previous terminations were not acts of retaliation but rather related to policy violations.

See here for more on the whistleblowers’ lawsuit. As we know, the FBI is investigating Paxton for the allegations that have been leveled against him regarding Nate Paul. Nothing else new to report here, so just let the anticipation wash over you.

So the FBI is indeed investigating Ken Paxton

Nov 18th, 2020

by Charles Kuffner.

1 comment

Sources say so.

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The FBI is investigating allegations that Texas Attorney General Ken Paxton broke the law in using his office to benefit a wealthy donor, according to two people with knowledge of the probe.

Federal agents are looking into claims by former members of Paxton’s staff that the high-profile Republican committed bribery, abuse of office and other crimes to help Austin real estate developer Nate Paul, the people told The Associated Press. They insisted on anonymity to discuss the investigation because it is ongoing.

Confirmation of the criminal probe marks mounting legal peril for Paxton, who’s denied wrongdoing and refused calls for his resignation since his top deputies reported him to federal authorities at the end of September.

A criminal defense attorney for Paxton, Philip Hilder, declined to comment. Spokespersons in the attorney general’s office did not immediately respond to requests for comment.

[…]

Paxton said in a Tuesday statement to the Austin American-Stateman that, “after reviewing the claims made by former employees of this office, their allegations are overblown, based upon assumptions, and to a large degree misrepresent the facts.”

KXAN has Paxton’s full statement, if for some reason you need to see it. Just the other day I was saying that we needed to be patient, because it usually takes a long time to find out what’s happening with this sort of thing. This is one of those times when I’m quite happy to be wrong. The Trib has more.

The life and times of Ken Paxton

Nov 15th, 2020

by Charles Kuffner.

1 comment

This long Trib story is basically a biography of Ken Paxton, with a focus on his ethical and legal travails since 2014. Most of what’s in here you already know, but if you need a refresher or you know someone who wants to get up to speed on the saga, this would be an excellent starting point. I’m going to highlight a couple of bits, mostly from the end, to illustrate where we are now.

Best mugshot ever

Although Democrats continue to make major hay of the [2015 securities fraud] charges, Paxton maintained enough support from conservatives to stay in office. Supporters compared his case to that of former Gov. Rick Perry, whose team spun the former governor’s indictment for abuse of power as a political hit job, and whose case was eventually dismissed.

With the securities fraud accusations, conservatives didn’t necessarily think Paxton was blameless — but he looked “sloppy” more than anything else, conservative political consultant Luke Macias said.

“The past accusations were more like Democrats trying to impeach Trump,” Macias said. This time is different, he said: The allegations are more serious, and they’re coming from attorneys respected on the right for their legal abilities and their conservative credentials.

[…]

Federal authorities have declined to say whether they are investigating Paxton, and the Texas Rangers said they referred complaints against Paxton to the FBI. But legal experts say it’s all but certain federal authorities are vetting the accusations against Paxton.

It would be “highly unusual” for federal authorities not to investigate, given the seriousness of the allegations and the presumed credibility of the accusers, said Edward Loya, a Dallas attorney and former prosecutor for the U.S. Department of Justice who handled public corruption investigations.

“That is a serious claim made by law enforcement professionals who, we expect, understand the gravity of such an accusation,” Loya said. He added that it’s unlikely any major developments would become public about the investigation for several months.

We may grind our teeth at Luke Macias’ words, but we must recognize that having a Jeff Mateer call Ken Paxton a crook is going to be taken more seriously by Republicans than having any Democrat call Paxton a crook. And yes, I know, it was a grand jury in Collin County that returned the indictments, but don’t let the facts get in the way of the story. Also, we need to be patient, because it will be a long time before we know for sure if this is a real thing that is going somewhere or just a lot of smoke that was never a fire.

Now, Paxton sits at the head of an agency that is hemorrhaging senior staff even as its workload — a slew of election-related lawsuits, thousands of child support cases, an argument at the U.S. Supreme Court — remains heavy and urgent.

In addition to the eight whistleblowers, Paxton has lost Ben Williams, who had worked with the attorney general since his days in the Legislature and ran Paxton’s campaign for House speaker and state Senate. Williams resigned just days after the allegations were made public. Katherine Cary, the agency’s chief of staff, was already set to retire this fall. Marc Rylander, a longtime Paxton ally and the agency’s former communications director, left in September. And Simpson, who headed the agency’s human resources department during the debacle, retired at the end of October.

At a senior staff meeting last month, before the whistleblowers had left or been fired, Darren McCarty, a former senior aide, asked Paxton whether the agency would stop bashing them in statements to the media. There was no response.

In an Oct. 16 letter to the Legislature, Paxton insisted that the agency was forging ahead full bore — a characterization some current and former agency staff members consider far rosier than the truth.

Some attorneys in litigation-heavy divisions of the agency fear his reputation will hurt their credibility in court.

“Any action taken by the AG’s office under General Paxton is suspect,” said Shane Phelps, who was a senior deputy at the agency under former attorneys general Cornyn and Dan Morales. The agency has to keep litigating its thousands of cases, on everything from child support to the death penalty, but now judges will “be on the lookout for any indication that it’s being handled irregularly, in any way that is coming from the top and for all the wrong reasons.”

“It has damaged the credibility and the ability of the AG’s office to further the interest of the state of Texas in court,” Phelps said, and “given all sorts of ammunition for anybody opposing the AG’s office in court to start talking about these things.”

“Something needs to happen,” Phelps said. “It sounds like he’s getting pretty brazen.”

I’d say Ken Paxton been pretty brazen for some time now, but I take his point. As for the current functional capacity of the AG’s office, on the one hand I’m happy to have our eventual Democratic candidate beat Paxton over the head about how his own actions have severely shackled the agency. But on the other hand, given that this AG’s office almost never does something I approve of, I’m not exactly heartbroken by this turn of events. May he stay limited in his ability to cause damage until such time as he is ejected from that office. Reform Austin has more.

(Note: This story came out one day before the four whistleblowers filed their lawsuit against Paxton. I had figured I could wait to publish this till the weekend, since it wasn’t breaking news or anything. Life comes at you fast.)

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