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Texas Lt. Gov. Claims|Adviser Stole $1 Million

AUSTIN (CN) - Texas' lieutenant governor sued his longtime campaign manager, claiming Kenneth Barfield stole more than $1 million in campaign money.

The David Dewhurst Committee and Dewhurst for Texas sued Kenneth Barfield and Alexander Group Consulting, in Travis County Court.

The David Dewhurst Committee (DDC) was formed in 2004 for Dewhurst's state campaigns, and Dewhurst for Texas (DFT) was formed in 2011 for his failed bid for the U.S. Senate.

Dewhurst claims Barfield had been his political consultant since 1998, when Dewhurst first ran for the office of land commissioner.

"Barfield quickly positioned himself as a trusted adviser, becoming Dewhurst's campaign manager and officer and/or director of both DDC and DFT," the complaint states.

"Barfield also owns and operates Alexander Group Consulting, a business that provides ... political consulting services."

Barfield lives and works in Austin. The David Dewhurst Committee was a client, paying a monthly consulting fee.

But "Sometime prior to 2010, Barfield began stealing money from the Dewhurst political committees through a variety of fraudulent schemes," the complaint states. "For example, Barfield would issue numerous invoices from the Alexander Group for services allegedly provided, such as large television ad buys. In realty, such invoices were fake or substantially inflated."

Dewhurst claims the large amount of campaign-year expenditures allowed Barfield to steal hundreds of thousands of dollars.

"In non-campaign years, the scheme was harder to pull off," the complaint states. "Since both committees were required to publicly disclose their finances on a regular basis, Barfield's scheme included creating false deposit slips and checks right before reporting deadlines in order to create the impression that monies had been deposited and thus not funds missing."

Dewhurst claims Barfield goosed the DDC's cash balance by producing fictitious deposit slips that were never received by the bank and did not appear on future bank statements. He claims a pattern of similar fake deposits occurred in and around December 2008, June 2009 and December 2009, coinciding with Texas Ethics Commission reporting deadlines.

"After each deadline, the bank deposits were removed from the cash balance and the undeposited funds and receivables were added back to the balance sheet," the complaint states.

Dewhurst claims that when he failed to win the U.S. Senate primary last year, Barfield hid $750,000 in donor refund checks under his desk, then fraudulently altered federal filings that overstated DFT's contributions and cash balance.

He claims the scheme was discovered in December when Barfield retired from politics and a new campaign adviser was brought in.

"When confronted, Barfield confessed to the scheme and was immediately discharged," the complaint states. "DDC and DFT have now filed amended state and federal campaign reports and are cooperating with law enforcement."

Dewhurst, a native of Houston, has been lieutenant governor since 2003.

He lost the 2012 Republican primary to former Solicitor General, now-Senator Ted Cruz. Cruz, a Tea Party darling, won the seat vacated by Kay Bailey Hutchison, who retired.

Dewhurst's committees The plaintiffs seek actual and punitive damages for fraud, breach of fiduciary duty and theft.

They are represented by Adam Schramek with Fulbright Jaworski in Austin.

Follow @davejourno
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