Texas AG whistleblowers sue for wrongful firing, retaliation

Texas

DALLAS (AP) — Four former deputies to Texas Attorney General Ken Paxton are suing him for wrongful firing and retaliating against them for reporting him to the FBI for alleged bribery and abuse of office.

Their lawsuit adds to the deepening legal and political peril for the high-profile Republican, who is facing calls for his resignation and a potential federal investigation over his staff’s charge that he used his office to benefit a wealthy donor.

In September, top members of Paxton’s staff reported him to federal authorities for alleged crimes they say he committed in assisting Austin real estate developer Nate Paul. Each of them has since resigned, been put on leave or been fired.

On Thursday, three of the lawyers who accused Paxton and the attorney general’s former head of law enforcement sued, claiming Paxton ousted them as retaliation and then smeared them in the press and to lawmakers.

“Paxton responded to the report immediately and with ferocity, as though he was trying consciously to show Texans exactly what retaliation against whistleblowers looks like,” states the complaint filed in a Travis County court.

Paxton’s office and a lawyer for Paul did not immediately respond to requests for comment Friday. The attorney general has broadly denied wrongdoing and cast blame on “rogue employees and their false allegations.”

The lawsuit paints a picture of the struggle between Texas’ top law enforcement official and the employees convinced he’s been breaking the law. It presents four instances in which the whistleblowers allege Paxton abused his position to help Paul and offers details that raise new questions, including Paxton allegedly “routinely cycling through ‘burner’ cell phones.”

Last year, the FBI raided Paul’s home and offices as part of an investigation that’s yet to result in any public charges.

The lawsuit says Paxton leaned on his deputies to green light the release to the developer’s lawyers of state and federal records related to the searches. The whistleblowers, however, felt this would scuttle long-standing policies that exempt records tied to ongoing investigations from state public records law, “and likely spark innumerable lawsuits.”

In one instance in March, Paul’s attorneys filed a public record request with the Texas Department of Public Safety for records related to a 2019 law enforcement raid of Paul’s properties. Paxton personally spoke with one of the whistleblowers — Ryan Vassar, who was deputy attorney general for legal counsel at that time — and “directed Vassar to find a way to release the information,” according to a copy of the lawsuit obtained by KXAN.

“Vassar struggled with this directive because allowing disclosure of the information requested by Paul would overturn decades of settled expectations,” the lawsuit states.

Vassar remains the only whistleblower still employed by the attorney general’s office. He has been placed on leave without an explanation, according to the lawsuit.

Paxton also directed his office to intervene in a civil case over a business dispute between Paul and The Roy F. and Joann Cole Mitte Foundation, an Austin charity.

The Mitte Foundation invested, and became a limited partner, in several of Paul’s World Class Holdings companies. In 2018, the Mitte Foundation sued several of those companies alleging they could not access financial records.

“Paxton began to take a deep personal interest in this case in May and June of 2020 and had several discussions with OAG staff about intervening in the case,” according to the lawsuit. “Against the advice of OAG staff, including some of the Whistleblowers, and contrary to OAG’s prior decision not to intervene, Paxton directed the Charitable Trusts Division to intervene in the lawsuit on or about June 8, 2020 in order to exert pressure on the parties to settle.”

Paxton’s former first assistant attorney, Jeff Mateer, and another whistleblower in the lawsuit, Blake Brickman, talked Paxton out of personally appearing in one of the hearings on that case, “which would have been an unprecedented event as Paxton has not appeared in any court on behalf of the OAG in years,” according to the suit.

Brickman says he was wrongfully terminated on Oct. 20 for making a whistleblower report.

Mateer was one of the employees that first brought criminal allegations against Paxton to federal authorities. He resigned Oct. 2.

The lawsuit says Paxton also ordered up a legal opinion that protected some of Paul’s properties from being sold in foreclosure.

On about July 31, 2020, Paxton contact one of the whistleblowers, Ryan Bangert, and asked him to research how COVID-19 restriction on group gatherings prevented foreclosure sales.

Paxton later “made clear” he wanted a “specific conclusion” issued that foreclosure sales should not continue. Within two days the attorney general’s office issued an informal opinion stating foreclosure sales should stop due to limits on gatherings.

“Unbeknownst to Plaintiffs at the time, this opinion favored persons such as Paul who hoped to stave off foreclosure sales. According to media reporting, on the very next day, Monday, August 3, 2020, lawyers for Paul showed Paul’s creditors a copy of Paxton’s opinion to prevent the foreclosure sales of Paul’s properties that were scheduled for August 4, 2020.

Bangert resigned his post Oct. 28.

But the act that prompted Paxton’s staff to report him was his hiring an outside lawyer to investigate Paul’s claims that the FBI broke the law in searching of his home and offices. Paxton’s staff concluded the allegations were outside their jurisdiction and unsupported by evidence, according to the complaint.

The outside lawyer obtained 39 grand jury subpoenas that were beyond “the appropriate scope” of the case, the complaint states. It says they appeared to be designed to aid Paul’s various civil suits and “to harass law enforcement agents and federal prosecutors.”

“Paxton and Paul were using their so-called ‘special prosecutor’ to bring the weight of the OAG to bear on Paul’s enemies,” the complaint states.

Another plaintiff in the case, Mark Penley, refused to sign a memo that would approve the outside attorneys hiring and allow him “to take over the investigation of Paul’s complaint.”

Penley said the claims that search warrants used in the raids on Paul’s properties were altered was “unsupported by credible evidence,” according to the lawsuit.

The lawsuit says Penley was terminated Nov. 2.

The lawsuit does not detail a theory of why Paxton would be helping Paul, who gave him a $25,000 campaign donation in 2018. But it does say the men had regular meetings this year, usually without Paxton’s security detail and without marking the meetings on the attorney general’s official schedule. In a deposition last week, Paul said Paxton recommended a woman for her job with the developer’s company. Paxton acknowledged having an extramarital affair with the woman, then a Texas Senate aide, in 2018 but said he ended it, according to two people who said the attorney general informed them of the relationship.

The lawsuit was brought by Brickman, Penley, Vassar and David Maxwell, who was terminated with Penley on Nov. 2.

They are suing for reinstatement, lost wages and other damages. They’ve also asked local prosecutors to fine Paxton $15,000 for each violation of the Texas Whistleblower Act.

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