Paxton whistleblowers urge lawmakers not to oppose settlement that will be paid with taxpayer dollars

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Attorneys for four former employees who accused Attorney General Ken Paxton of corruption urged lawmakers on Friday not to oppose their $3.3 million settlement — which must be approved by the Legislature because it’s being paid out with taxpayer money.

The attorneys for Blake Brickman, David Maxwell, Mark Penley and Ryan Vassar — all former top deputies to Paxton in the attorney general’s office — said their clients “courageously reported what they believed to be corruption and put the investigation in the hands of law enforcement where it belongs” and were now asking lawmakers to back their efforts to report wrongdoing.

Rejecting the settlement could discourage others from coming forth to report wrongdoing in state agencies in the future, they said.

“No Texas legislator should oppose these whistleblowers’ hard-fought claim for compensation to which they are entitled under the Texas Whistleblower Act,” the attorneys wrote. “State employees cannot be expected to report government corruption in the future if they know the Legislature won’t back their rights under the statute it passed for the very purpose of protecting them.”

The plea from the lawyers comes after prominent lawmakers like House Speaker Dade Phelan, a Beaumont Republican, and state Rep. Jeff Leach, a Plano Republican who leads the House Judiciary and Civil Jurisprudence Committee, have questioned the use of state dollars to pay Paxton’s settlement.

On Wednesday night, Phelan, who leads the House, said he did not support the move and did not expect the chamber’s budget to include money for a settlement payment.

“I don’t think it’s proper use of taxpayers’ dollars,” he told CBS 11 in Dallas.

Leach said in a statement the day the settlement was announced that he was troubled that “hardworking taxpayers might be on the hook for this settlement between the Attorney General and former employees of his office” and that lawmakers would have questions and expect answers about the payout.

Paxton’s office did not immediately respond to a request for comment. But in his initial statement responding to the settlement, he said he was saving taxpayers money by ending the litigation.

In October 2020, eight of Paxton’s top deputies accused him of doing political favors for real estate developer Nate Paul, a friend and political donor who had given Paxton’s campaign $25,000 in 2018. The employees told authorities that Paxton had improperly tried to aid the donor by becoming involved in Paul’s legal cases, over their objections. They also alleged Paxton was indebted because Paul had helped him remodel his multimillion-dollar home and given a job to a woman with whom they said Paxton had an extramarital affair.

Paxton is married to state Sen. Angela Paxton, R-McKinney. Ken Paxton and Paul have both denied wrongdoing.

The settlement agreement was announced last Friday and would include the $3.3 million payments to the four employees who were fired and lost wages after reporting what they believed to be Paxton’s crimes. It would also include an apology from Paxton, the retraction of a news release that called the former deputies “rogue employees” and a statement that neither side admits fault in the case.

But the proposed settlement has garnered some opposition from the public and lawmakers because it would be paid out of state funds. Budget writers in the Senate, like Dallas Democrat Royce West, have also expressed skepticism about the agreement.

Under the Texas Whistleblower Act, plaintiffs are allowed to sue the employing agency where the retaliation happened, but not a specific employee in their personal capacity. That is why the payment would be paid out of state funds and not Paxton’s personal funds.

In their statement, the attorneys told lawmakers that the former employees had unfairly lost their jobs and been smeared by Paxton in news stories for reporting what they believed to be serious crimes.

On Thursday, the Supreme Court of Texas, which had been considering a Paxton appeal to the whistleblower suit, put the case on hold to give the parties time to finalize the agreement. The parties have until April 3 to figure out whether lawmakers will agree to the settlement and must notify the court about any changes in the proceedings.

The deputies’ reports to authorities in October 2020 led to an FBI investigation into Paxton. No charges have been filed, but this week, state prosecutors handling a separate securities fraud case against Paxton said federal authorities in Washington, D.C., are now handling the case, indicating that the probe is ongoing.