Texas AG’s Office Asks Judge to Toss Whistleblowers’ Suit

Four former Texas Attorney General’s Office staffers fired after they accused Ken Paxton of criminal corruption say their former boss went to “bizarre” lengths to use his office to help a campaign donor.

State Attorney General Ken Paxton waits on the flight line for the arrival of Vice President Mike Pence at Love Field in Dallas on June 28, 2020. (AP Photo/Tony Gutierrez)

AUSTIN, Texas (CN) — The Texas Attorney General’s Office asked a state judge Monday to dismiss a lawsuit in which four former staffers claim they were fired because they reported to the FBI they believed Attorney General Ken Paxton had illegally used his position to benefit a campaign donor.

According to the lawsuit, Paxton retaliated after eight high-level employees reported to the FBI and Texas Rangers last autumn they believed he had committed the crimes of abuse of office, bribery, tampering with government records and impeding an official proceeding by using his position to help out his friend and campaign donor Nate Paul — an Austin-based real estate developer.

The allegations led the FBI to subpoena Paxton.

Within 50 days of their report, five of the whistleblowers were fired and the other three resigned, reportedly under pressure from Paxton.

To say the case has aired Paxton’s dirty laundry would be an understatement.

He stands accused of getting his mistress a job as a construction manager for one of Paul’s companies and of going to “bizarre” lengths to help Paul pursue investigations of a federal magistrate judge — who had issued search warrants authorizing the FBI to raid his home and offices in August 2019 — the FBI agents and state law enforcement officers who did the raids, and a federal prosecutor who obtained the warrants from the magistrate judge.

The whistleblowers claim Paxon had the Office of the Attorney General hire Houston attorney Brandon Cammack as an outside counsel in September and he issued numerous subpoenas over the FBI raids even though his contract was never approved. 

Cammack also issued subpoenas to a federal bankruptcy judge, a charity involved in real estate projects with Paul’s companies, a receiver appointed to manage some Paul-company properties and a credit union that had a lien on a Paul business property — all of whom Paul believed were conspiring to defraud him, the whistleblowers allege in their second amended complaint filed Feb. 9. 

Paul contributed $25,000 to Paxton’s political campaign committee in October 2018, and the political action committee of a law firm representing some of Paul’s businesses chipped in another $25,000 to Paxton’s campaign coffers last June, shortly after Paxton had his office intervene in litigation to help Paul, according to the whistleblowers.

They say they learned last year Paul’s companies were involved in the renovation of Paxton’s $1 million Austin home.

Despite Paxton’s central role, he is not named as a defendant in the lawsuit.

The whistleblowers sued the Office of the Attorney General in November, claiming it violated the Texas Whistleblower Act. Two of the plaintiffs asked for a temporary injunction ordering the office to reinstate them to their former jobs.

In a dismissal motion hearing conducted remotely Monday, the Office of the Attorney General’s counsel, William Helfand, of the firm Lewis, Brisbois, Bisgaard and Smith, said the trial court lacks jurisdiction.

Helfand argued the Texas Whistleblower Act only applies to employees who make a good-faith report of a violation by their employing government entity or another public employee.

“The Texas Whistleblower Act does not extend its protection to reports of unlawful conduct made about a state elected official,” Helfand said.

He added that the legislature, under the separation of powers established by the Texas Constitution, cannot pass legislation regarding the judicial branch or the executive branch, to which the attorney general belongs.

“Where does your argument end?” Travis County District Judge Amy Clark Meachum interjected. “Are you saying it does not apply to any other public official?”

Helfand said he didn’t know if the actions of county-level elected officials are also immune from Texas whistleblower lawsuits. 

“It almost seems your exception would swallow the rule,” Meachum said. “If it does not apply to any public official or any elected official … who does it apply to?” 

Though Paxton is listed as an employee of the Office of the Attorney General, Helfand said it is not his employer but was created to serve the elected attorney general. 

The Office of the Attorney General hired lead plaintiff James Brickman as a deputy attorney general in February 2020 before firing him in October.

“You could not script more obvious retaliation against whistleblowers,” Brickman’s attorney Thomas Nesbitt, of the Austin firm DeShazo Nesbitt, said in Monday’s hearing. 

Opposing counsel, he said, spent a lot of time trying to convince the judge Paxton is not an employee of the Office of the Attorney General but ignored the part of the statute that says whistleblowers can bring claims if they are accusing the employing government entity of misconduct.

“Acts that Paxton committed in the course and scope of performing his duties, in his official capacity, are acts of the employing government entity under the Texas Whistleblower Act,” Nesbitt said.

Meachum said she would take the motion to dismiss for lack of jurisdiction under advisement and turned to the plaintiffs’ temporary injunction motion.

Apparently assuming his arguments for dismissal were open and shut, Helfand tried to shut the injunction hearing down.

“If the court intends to proceed on the merits of the case, then I need to file a notice of appeal,” he said. Moments later he said he had filed an appeal, which he believes should stay all activity in the trial court.

Meachum forged ahead and the plaintiffs called Jeff Mateer as a witness for the injunction hearing.

As the OAG’s first assistant attorney general from March 2016 until he resigned Oct. 2 after joining the other whistleblowers in reporting Paxton to the FBI, Mateer said he managed the office’s 4,200 staff employees and 800 attorneys and was the only attorney who reported directly to Paxton.

The two plaintiffs who are trying to be reinstated via a temporary injunction are David Maxwell, a career law enforcement officer who served as deputy director of the office’s law enforcement division for 10 years, and Ryan Vassar, who held the position of deputy attorney general for legal counsel.

Mateer testified both Maxwell and Vassar were highly respected within the OAG and he was unaware of any performance-related reasons why either would be terminated.

Mateer’s testimony came in fits and starts due to the constant objections of Helfand, who argued Mateer could not testify about any conversations he had with Paxton while still working for the OAG because it would be protected by attorney-client or work-product privilege.

Vassar’s attorney Joseph Knight, of the Austin firm Ewell Brown Blanke & Knight, argued Paxton’s derogatory public statements about the whistleblowers had nullified any such privilege. 

After the whistleblowers’ complaint came out in news reports, Paxton issued a statement through his office calling them “rogue employees” who had impeded an investigation into the FBI with false allegations.

If Meachum rules against the Office of the Attorney General on the jurisdictional question or the temporary injunction, Knight warned the judge the agency will appeal and “is going to tie this up for however many years that takes.”

Cases involving Paxton do have a way of dragging on for years.

Paxton, the state’s top law enforcement officer, has been under indictment since a Collin County grand jury charged him in August 2015 with two felony counts of securities fraud and felony failure to register with the Texas Securities Board.

The charges stem from his sale of shares in the technology firm Servergy to his friends and fellow Republican state lawmakers when he was a member of the Texas House of Representatives

Paxton’s trial has been delayed by disputes over fees for special prosecutors assigned to the case and their efforts to move it from the Dallas suburb of McKinney to Houston.

Despite the indictment, Paxton won reelection in 2018.

The injunction hearing was set to resume Tuesday at 10 a.m., but a three-judge panel of the Texas Third Court of Appeals in Austin unanimously granted the Attorney General’s Office’s motion to stay the proceeding.

The panel gave the whistleblowers’ attorneys until March 8 to respond to the OAG’s claims state law requires Judge Meachum to issue a final ruling on its motion to dismiss for lack of jurisdiction before she hears testimony on the merits in a temporary injunction hearing.

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