Texas Attorney General Ken Paxton cleared by his own office of wrongdoing in bribery allegations

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Nearly 11 months after Texas Attorney General Ken Paxton’s former top aides accused him of accepting bribes, Paxton’s office on Tuesday published a 374-page internal report that concludes he's innocent of the allegations.

Last October, seven former employees told authorities that they believed Paxton was using his power as attorney general to aid Nate Paul, a campaign donor and Austin real estate developer, who whistleblowers have said helped Paxton remodel his home and gave a job to a woman with whom Paxton allegedly had an affair. All of those employees were either fired or left the office under pressure after their complaint. Four of the employees filed a whistleblower lawsuit saying Paxton used his position to help Paul’s business interests, investigate his foes and help settle a lawsuit.

But in Tuesday’s report, Paxton’s office said there was no basis for a criminal complaint against their boss, a second-term Republican.

“AG Paxton’s actions were lawful, and consistent with his legal duties and prior actions taken by Attorneys General of Texas,” the report said. “AG Paxton committed no crime.”

The report also said it found “no evidence” that Paxton had taken a bribe or that there was a quid pro quo relationship between Paxton and Paul. And it accuses three of the Paxton aides who reported him of breaking the law.

In a statement, attorneys for the whistleblowers, said 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 FBI is reportedly investigating the claims by Paxton’s former employees.

“Notably, whoever in Paxton’s office wrote this report was not willing to put their name on it. Of course, the one-sided internal report is full of half-truths, outright lies, and glaring omissions,” the statement read. “It is a half-baked self-exoneration by Paxton, who continues to use taxpayer dollars to delay and hide from simple document requests and depositions and pay private lawyers to keep the federal investigation quiet. The truth will come out, but you won’t get it from Ken Paxton.”

Alejandro Garcia, a Paxton spokesperson, did not respond to a question about who had worked on the report and what level of independence the person or persons had from the attorney general. The report states it is rooted in “documents, third-party interviews and the application of Texas law.”

But it also states that the report is limited to events that occurred before Oct. 5, 2020, when the internal investigation began, and the office “reserves the right to update and modify” the report and its conclusions.

The report does not impact the whistleblower lawsuit, which is currently awaiting a hearing at the 3rd Court of Appeals after Paxton asked the court to throw out the case. The four whistleblowers — Ryan Vassar, Mark Penley, James Brickman and David Maxwell — have asked the court to reinstate them and compensate them for lost wages, future loss of earnings and damages for emotional pain and suffering.

Paxton has denied wrongdoing and said he fired the whistleblowers because they had gone “rogue” and made “unsubstantiated claims” against him.

The report claims that the former employees who reported their concerns to authorities ignored facts and sometimes “willfully obfuscated” them. It also pushes back against claims that Paxton accepted bribes and accuses some of the former employees of illegally sharing grand jury information with a private lawyer and getting rid of evidence.

The criminal complaint by former employees alleges that Paxton pressured staff to help Paul’s attorney get information through records requests he had filed with other state agencies. The attorney general is charged with resolving disputes on open records laws. Paul was seeking information related to an August 2019 raid by state and federal authorities on his home office.

The employees also alleged that Paxton took an interest in a routine lawsuit between an Austin charity, the Roy R. and Joann Cole Mitte Foundation, and Paul’s real estate firm. The attorney general’s office had already declined to get involved in the case, but Paxton directed the agency to reverse itself and intervene. The effort, according to the whistleblowers and an attorney for the charity, was intended to help Paul’s interests at the expense of the philanthropic group.

Last July, Paxton directed top aides to issue a legal opinion on foreclosure sales during the COVID-19 pandemic that the whistleblowers said would help Paul stave off foreclosure sales of some of his properties.

And most troubling for the whistleblowers, Paxton hired a 34-year-old Houston defense attorney named Brandon Cammack to investigate claims by Paul that he had been mistreated during the 2019 raid of his home and office.

Two Paxton aides at the time, Maxwell and Penley, had been charged with looking into Paul’s claims but had found “no credible evidence existed to support any state law charges.” Penley tried to close the investigation but Paxton, Paul and his attorney pushed back. Paxton eventually hired Cammack.

The internal report addresses each of the concerns presented in the criminal complaint, saying the attorney general’s office ruled against people connected to Paul in open records disputes multiple times. The report says the office also took a position in the lawsuit involving the Mitte Foundation that was “adverse to Nate Paul,” who would have had to pay a higher settlement under its guidance.

The report states that the foreclosure opinion was in response to a request for guidance from state Sen. Bryan Hughes, R-Mineola, during the height of the COVID-19 pandemic. But it does not state that Hughes has publicly said he filed his request for an attorney general opinion at Paxton’s behest, with the attorney general’s office even providing the wording for it.

The report also said Cammack “legally and properly” exercised authority given to him by the attorney general’s office and the Travis County District Attorney’s office, even though some of the employees who filed a complaint against Paxton said they had no knowledge of the hiring of Cammack as an outside counsel for the office. The report says some of the employees signed off on the hire and should have known about Cammack’s work for the office.

The report alleges that Penley, who the report says should have known about the hire because he had signed off on it, misinformed the district attorney’s office that Cammack was not working for the attorney general and violated Texas law. It also alleges that Vassar committed a crime when he shared information about subpoenas Cammack had filed with a private lawyer who previously worked as a state and federal attorney. The report says Penley also shared subpoena information with the lawyer.

In an email included in the report, Penley asks the lawyer to forward the subpoenas to a law enforcement agency.

The attorney Penley asked previously served as a federal prosecutor, and the internal report says that because Cammack was investigating the raid of Paul’s home by federal authorities, he could have had personal and professional relationships with possible defendants. The whistleblowers’ statement Tuesday did not directly address the allegations made by Paxton’s in the report.

Separately, Paxton has been indicted for felony securities fraud. He is seeking a third term in office in 2022 and has already drawn two Republican opponents in Land Commissioner George P. Bush and former Texas Supreme Court Justice Eva Guzman.

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