Dewhurst Adviser, Accused of Embezzlement, Faces Criminal Inquiry

Kenneth “Buddy” Barfield, a top adviser to Lt. Gov. David Dewhurst, is facing a criminal investigation amid accusations from the Dewhurst campaign that he embezzled hundreds of thousands of dollars from political accounts and falsified campaign finance reports from 2008 to the present to hide his actions.

Barfield is accused of falsifying bank deposit slips, vendor invoices and other documents to cover up his alleged actions and to make the balances appear legitimate. An accountant in Dewhurst’s campaign found a discrepancy this month, and that led to the discovery that at least $600,000 was missing from the state campaign’s account. Barfield was confronted the next day and asked to leave; he told campaign officials he would pay the money back, but hasn’t done so. And the alleged pilfering, first reported by The Dallas Morning News, has been referred to the Travis County district attorney for possible prosecution.

“All I can say is that the lieutenant governor is shocked and dismayed that a trusted former senior adviser would steal from a campaign account for his own gain,” said Rob Johnson, a former adviser to Dewhurst who is acting as the campaign’s spokesman. “The level of money is shocking.”

Barfield did not return calls seeking comment.

State law requires candidates to correct their reports within 14 days of finding errors. Campaign officials scrambled to get the right numbers together by that deadline. In the week before Christmas, they filed corrected reports with the Texas Ethics Commission, correcting the stated cash-on-hand numbers and explaining bluntly what happened.

“It was recently discovered, unknown to the officeholder and the treasurer of the committee, that the contribution balance shown on the original report was false,” the corrected reports said. “The correct contribution balance is stated herein. The incorrect balance was the result of Mr. Kenneth A. Barfield, an official of the campaign, supplying false information. Unknown to the officeholder and treasurer, this person, who was responsible for compiling the information used for the report, intentionally submitted false and incorrect amounts and documentation. This misrepresentation of contribution balances was directly related to the misappropriation of committee funds to his own account, and for his own personal benefit. Appropriate actions are being taken to obtain full restitution to restore to the committee the misappropriated funds.”

The corrected state campaign finance report covers a period dating from the beginning of 2008 to now. The campaign’s cash on hand was overreported in each of the 11 reports; differences between what was originally reported to the state and the corrected amounts reported this month range from a low of $600,562.12 to a high of $1,296,358.14.

Dewhurst campaign treasurer Howard Wolfe, an attorney, said he would have no comment, referring questions to Johnson, the lieutenant governor’s former chief of staff and former campaign manager.

The campaign called in Travis County prosecutors, who confirmed they received a complaint and that they have opened an investigation, but would say nothing more.

Barfield has been involved in Republican politics in Texas for years, working on Clayton Williams’ unsuccessful campaign for governor in 1990 and then for the Kansas-based Koch brothers on political issues in the early 1990s before going to work for Dewhurst. He has been one of Dewhurst’s most trusted advisers, most recently serving as manager of Dewhurst’s campaign for U.S. Senate. Friends and associates of the two describe them as very close and said Dewhurst was, in the words of one, “deeply hurt by the level of betrayal.” The two have also done personal business together over the years.

For Barfield, the transparent part of his association with Dewhurst has been lucrative. The Senate campaign, which lasted less than two years, reported paying Barfield $143,196 directly, and paying his company, Alexander Group Consulting, or AGC, another $1.1 million for advertising, media buys and direct mail. From 2002 through mid-2011, the state campaign paid him $161,639 directly, according to its reports with the Texas Ethics Commission. From 2009 to this year, the state campaign paid AGC $4.88 million for consulting and media buys, according to the TEC.

Dewhurst’s campaign is still digging through financial records to see whether his federal reports — filed in connection with his unsuccessful race for U.S. Senate earlier this year — need any corrections. None have been filed so far. And they are still working on the details of exactly what happened and how much might have been misappropriated. Because of the 14-day deadline for reporting mistakes on state reports, their first efforts went to that.