AUSTIN, Texas – Attorney General Ken Paxton’s office made its case on Tuesday for state budget writers to fund a $3.3 million whistleblower settlement, saying the cost to keep fighting the lawsuit would be far higher.
But the attorney general ducked a question about whether he would tap his own campaign coffers if the Legislature won’t pay the tab with taxpayer dollars.
Paxton and his agency faced lawmakers for the first time Tuesday since agreeing to settle a whistleblower lawsuit with four former high-ranking employees who alleged retaliation after accusing Paxton of serious crimes.
While the terms are set, the agreement is “contingent upon all necessary approvals for funding.”
At a House Appropriations subcommittee hearing, Houston Democratic Rep. Jarvis Johnson asked whether Paxton would be willing to tap his campaign account for the $3.3 million.
Paxton, a third-term Republican, did not answer the question. Instead, agency attorney Chris Hilton, who sat beside him, weighed in.
“I don’t want to speak for the attorney general,” said Hilton, who heads the office’s general litigation division.
“I’ll just say that there is no whistleblower case where any individual has paid anything because the individual is not liable under the terms of the statute,” Hilton said. “Also, under the terms of the settlement, there is no admission of fault or liability or wrongdoing by any party.”
While the whistleblower lawsuit was brought against the agency, many of the allegations center on Paxton’s own actions.
It’s not clear whether the attorney general would be allowed to draw from his campaign coffers to cover the settlement. Typically, state law prohibits putting that money toward personal use, but allows spending on officeholder expenses.
As of January, Paxton had $2.3 million in his campaign account, according to his most recent reporting with the Texas Ethics Commission. Lawmakers and certain statewide officials are not allowed to raise campaign money during the legislative session.
On Tuesday, Hilton told lawmakers it would be more cost effective for the state to settle now, than to keep doing battle in court.
The agency has already spent nearly $600,000 on outside lawyers hired to handle the whistleblower lawsuit, which was filed in late 2020, he said.
“Financially speaking, there is no upside for the state to this case, even total vindication at trial results in a significant expenditure,” Hilton told the committee.
When asked what would happen if the money doesn’t materialize, Hilton said because the lawsuit is still pending he doesn’t want to “get into too many details.”
But he reiterated that the settlement was made “in order to save money for the State of Texas.”
“It’s a settlement that is in the interest of the state,” he said.
Rep. Steve Allison, R-San Antonio, said it strikes him that lawmakers are in between “the proverbial rock and a hard place.”
“We either pay the $3.3 million now or pay far more than that either in additional legal expenses or an unfortunate result,” he said.
Previously, Paxton said that while cost was a factor in settling, so too was the Travis County venue. In a recent interview on conservative talk radio, Paxton described Travis County as “super liberal” and unlikely to give him a fair shake.
Some lawmakers have bristled at paying the $3.3 million tab, including House Speaker Dade Phelan, who told CBS DFW last week that it’s “not a proper use of taxpayer dollars.” On Monday, Abbott told The Texas Tribune that he has to learn more about it.
“It may or may not even reach my desk, but as Speaker Phelan made clear, this is an issue that the attorney general is going to have to fully explain to both the House and the Senate,” Abbott, a third-term Republican told The Tribune.
Meanwhile, attorneys for the whistleblowers have said failure to fund the settlement would set a bad example for other government employees who may want to report possible corruption.
The whistleblowers are former Deputy Attorney General for Criminal Justice Mark Penley, former Deputy AG for Legal Counsel Ryan Vassar, former Deputy AG for Policy and Strategic Initiatives James “Blake” Brickman and former Director of Law Enforcement David Maxwell. All four were fired.
They were among a group of eight top employees at the attorney general’s office who went to law enforcement in late 2020 with allegations that Paxton had abused the office to help a campaign donor.
The FBI opened an investigation into the accusations, which was recently taken over by Justice Department officials in Washington, according to the Associated Press. Paxton has denied wrongdoing. Reelected to a third term last year, the Republican has cast the investigation as a politically motivated witch hunt against him.
When asked about the probe on Tuesday by a lawmaker, Hilton declined to comment, saying it was “outside my scope of expertise.” Paxton did not respond to the question.
The $3.3 million payment is only one aspect of the settlement agreement, which also says Paxton will apologize to the whistleblowers for calling them “rogue employees.” His agency also will delete a news release criticizing the whistleblowers, and the final settlement agreement will include a line that states: “Paxton accepts that plaintiffs acted in a manner that they thought was right.”
The document states that entering into a settlement means there is no admission of “liability or fault” by any party.
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