Lt. Gov. David Dewhurst says hundreds of thousands of dollars were stolen from his political bankroll by his campaign manager, a prominent Republican consultant who faces the accusations just one month after defaulting on a $506,000 settlement with a land developer that has been owed four times that amount for years, an attorney said Friday.
Dewhurst has accused Kenneth Barfield, who ran Dewhurst's unsuccessful U.S. Senate bid, of funneling money "for his personal benefit." The allegations were made in newly revised state filings that show the Dewhurst campaign with $700,000 less than originally reported.
The revelation came a month after Barfield failed to pay the latest in multiple defaulted settlements with S&K Development Company Inc., said Curtis Kurhajec, an attorney for the developer. A state district judge in 2009 awarded S&K Development a $2.2 million judgment against Barfield and his defunct companies for not delivering on a loan, according to court records.
Neither Barfield, 56, nor his attorney, Brian Casey, immediately returned phone messages Friday.
Prosecutors also confirmed Friday they have opened an investigation surrounding Barfield, who has not been charged.
The David Dewhurst Committee submitted an amended filing with the Texas Ethics Commission last week. Whereas the political action committee originally reported about $770,000 cash on hand in July, a revised copy of the same report now indicates less than $7,300 in the account.
"The misrepresentation of contribution balances was directly related to the misappropriation of committee funds to (Barfield's) own account, for his own personal benefit," the filing reads.
The allegations surrounding the missing funds were first reported by The Dallas Morning News.
S&K Development originally gave Barfield and his companies about $1.7 million, which Kurhajec told The Associated Press was for a development project in Colorado that never broke ground. Kurhajec said Barfield again defaulted on the latest settlement — $506,000 that was due Nov. 1.
During the three-year legal fight, the company accused Barfield in court filings of having a "history of failing to disclose all his bank accounts" and moving money around. That includes $30,000 he was reportedly paid each month by the David Dewhurst Committee, according to court records.
Holly Taylor, a Travis County assistant district attorney, said Friday her office has opened an investigation surrounding Barfield but said she could not comment on the scope or allegations.
"I don't know that it's set in stone," she said.
Ron Johnson, a Dewhurst spokesman, said the lieutenant governor was shocked by the alleged actions of a "trusted" former senior adviser and said the campaign would work with investigators.
"The level of betrayal is stunning," Johnson said.
The allegations involve Dewhurst's PAC for his state races, and not the funds used to finance his expensive but unsuccessful bid to replace outgoing Republican U.S. Sen. Kay Bailey Hutchison. Dewhurst lost to tea party insurgent Ted Cruz despite spending nearly $20 million of his own fortune.
Barfield's name is on Dewhurst's federal campaign filings, too. The Dewhurst for Senate Committee last reported that it was more than $813,000 in debt. Barfield signed the last campaign filing with the Federal Election Commissions as the campaign treasurer on Oct. 30.
According to FEC records, Barfield donated the maximum $5,000 to Dewhurst's campaign for the primary and the run-off.
State campaign finance records show that Barfield's consulting group, Alexander Group Consulting, has been paid nearly $5 million by the Dewhurst campaign since 2009. That year, according to court documents, Barfield listed on tax returns $15,393 in total reported business income.
In 2011, Barfield listed two liens on his home totaling more than $1.5 million, and stated he owned a condo in Alabama and a boat valued at $16,500, court documents show.
Barfield has been a longtime political player in Austin but has done so behind the scenes and out of the spotlight. Among the few times his name has appeared in the media over the past two decades was a 1995 press release listing him as a member of former Republican presidential candidate Bob Dole's steering committee in Texas. Barfield was also identified as working as a political consultant for Koch Industries in 1996.
The allegations were referred to prosecutors last week. Asked if Barfield had spoken with investigators, Taylor said she could not discuss who has been interviewed.
Dewhurst's campaign filed the corrected reports to the Texas Ethics Commission on Dec. 21.