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On a late-September Wednesday in 2020, several of Attorney General Ken Paxton’s highest-ranking deputies walked into the FBI’s Austin office to make an explosive accusation: Their boss, one of the state’s most influential Republicans, appeared to be dirty.
Paxton, they said, had personally directed his powerful agency to take unusual and probably illegal actions to help a friend and campaign donor, Austin real estate investor Nate Paul, who was under federal investigation for fraud.
Paxton’s interest in Paul’s plight was bizarre, obsessive and so far beyond normal operations at the attorney general’s office that the agency’s top officials struggled to convey their concerns during the hourslong meeting with two FBI agents.
In addition to obstruction of justice, harassment and abuse of office, they added, Paxton had apparently accepted bribes from Paul.
Back in the office the next day, seven of the agency’s top-ranking officials sent Paxton a text message saying they had reported him to the authorities and asking him to meet them in an eighth-floor conference room in two hours “to discuss this matter.”
Paxton did not respond.
It was Oct. 1, 2020. By mid-November, three of the officials had resigned, and the other four had been fired. An eighth official, David Maxwell, who ran the law enforcement division, was on vacation and unavailable to meet with the FBI agents. He made a separate report to authorities. He, too, was fired.
Paxton said he had committed no crimes and claimed all eight executives were “rogue employees” bent on impeding his agency’s legitimate investigation into disturbing allegations made by Paul, who claimed federal search warrants had been tampered with after his home and businesses were searched in 2019.
According to several of the fired officials, however, forensic experts concluded that there was no evidence that the warrants had been doctored. Paxton rejected the conclusion, then skirted agency rules to hire an outside lawyer to investigate Paul’s tampering claim.
It was one of several occasions when Paxton took an unprecedented personal interest in Paul’s affairs, according to a 2020 whistleblower lawsuit by four former executives who claimed they were wrongly fired in retaliation for reporting Paxton to the authorities.
The FBI opened an investigation but has said nothing publicly in the years since. Earlier this year, the investigation was transferred to the U.S. Justice Department, again with no status updates in the meantime.
Two recent events, however, returned the spotlight to Paxton, Paul and their relationship:
- Relying heavily on the allegations of impropriety detailed by the whistleblowers, the Texas House voted overwhelmingly on May 27 to impeach Paxton, setting up a future trial in the Texas Senate.
- On June 9, a federal grand jury indictment was unsealed that accused Paul of eight counts of lying to financial institutions to fraudulently obtain loans. The same federal prosecutor who oversaw the 2019 search warrants on Paul’s properties represented the government at Paul’s first court hearing last week.
Here is an examination of the whistleblowers’ four main allegations against Paxton, supplemented by findings recently released by investigators with the state House General Investigating Committee, which drafted the articles of impeachment after spending almost three months examining the allegations and other suspected wrongdoing by Paxton.
Paxton hires an outside lawyer to investigate Paul’s claims
The attorney general’s office opens about 2,000 criminal investigations and 400 criminal cases each year, but Paxton rarely showed interest in the work — except when Paul asked for help with his allegations of altered search warrants, the whistleblowers alleged in their lawsuit.
In May 2020, Paxton set up and attended a meeting with Paul and his lawyer at the Travis County district attorney’s office, where officials concluded that it wasn’t the right agency to investigate Paul’s complaint. Then-District Attorney Margaret Moore referred the matter back to Paxton’s agency without looking into it.
Paxton next asked Maxwell and another top deputy, Mark Penley, to investigate Paul’s complaint. (Maxwell and Penley would later join the whistleblower lawsuit against Paxton and his agency.)
During the third of three meetings with Paul and his lawyer — this one also attended by Paxton and two forensic experts from the agency’s Criminal Investigations Division — Penley and Maxwell said a review found no evidence of tampering on the search warrants. Even so, Paxton pushed back against closing the investigation, the whistleblower lawsuit said.
Paul had a stronger reaction, becoming so angry that he “dressed down the office of the attorney general senior staff as if they were his own employees,” according to Mark Donnelly, an investigator for the House committee.
Soon after, Paxton took a different path, seeking an outside lawyer despite his agency employing about 750 attorneys, many with specialized skills and expertise, to investigate Paul’s allegations.
Paxton disregarded the normal process of hiring an outside lawyer, in which candidates are vetted for a contract that requires approval from about 10 members of the agency’s staff, the whistleblowers said.
Paxton narrowed the list of candidates to a veteran former state and federal prosecutor and Brandon Cammack, a five-year lawyer with no experience as a prosecutor. House investigators said Paul had recommended Cammack to Paxton.
Paxton chose Cammack in early September 2020 and asked top deputies to approve a contract.
About three weeks later, Cammack requested documentation identifying him as an attorney working for the attorney general’s office but was told that his hiring was still in the internal review process. Later that day, Paxton called Deputy Attorney General Ryan Vassar — who would later join the whistleblower lawsuit — to ask why the contract was delayed, adding that he was “tired of people not doing what he had asked,” the lawsuit said.
Penley, who was in charge of the criminal justice division, declined to approve the contract, saying Cammack wasn’t needed because a forensic analysis found no evidence of a crime. Paxton summoned Penley to McKinney, Paxton’s hometown, to pressure him to allow Cammack to be hired, but Penley declined, instead supplying several pages of his concerns and warning Paxton that he was “exposing himself to potential criminal liability,” Donnelly said.
“Paxton responded at that point that Brandon Cammack had been working on the case for two weeks and needed to be paid. This was the first time that any senior staff member had learned that,” Donnelly told the House investigating committee.
According to Donnelly, when Penley declined to supervise Cammack, Paxton responded: “Don’t worry, I will.”
On Sept. 28, 2020, two days before they’d make their complaint to FBI agents in Austin, top agency officials learned that Cammack had begun obtaining grand jury subpoenas — 39 in total — for financial institutions that had done business with Paul, for law enforcement personnel and others involved in the 2019 search of Paul’s home and businesses, and for others involved in an unrelated legal fight between Paul and a charity.
To get the subpoenas, Cammack identified himself as a “special prosecutor” for the attorney general’s office. However, a copy of Cammack’s $25,000 one-year contract — which had been signed by Paxton — shows he was hired as an outside counsel who was not supposed to represent the agency in litigation or provide prosecutorial services.
News of the subpoenas sent shockwaves through the agency. Few executives had known that Cammack had been hired, and his aggressive campaign of subpoenas had the appearance of a vendetta against Paul’s opponents, the whistleblower lawsuit said.
“Leadership falls into what I think they would tell you is not just grave concern but chaos,” House investigator Erin Epley told the committee. “They’re concerned that Brandon Cammack has gone rogue.”
Two days after meeting with FBI agents, Penley asked a state district judge in Travis County to quash the subpoenas, saying Cammack was not authorized to represent the attorney general’s office as a special prosecutor. Less than 40 minutes later, the judge canceled the subpoenas.
On Oct. 9, 2020, Travis County’s district attorney sent Paxton a letter saying her office would have nothing to do with the Paul investigation. Moore also took note of news stories about the allegations against Paxton.
“The newly surfaced information raises serious concerns about the integrity of your investigation and the propriety of your conducting it,” Moore wrote.
Release of law enforcement documents related to Paul
Before a government-affiliated agency can deny a request made under the state’s open records laws, the attorney general’s office must confirm that the information is not subject to disclosure.
In 2019 and 2020, Paxton got involved in three public information matters related to Paul.
Seeking information on the search warrants for his properties in fall 2019, Paul’s lawyers requested copies of the affidavits of probable cause, including unredacted information about why law enforcement wanted to conduct the searches. That information, however, was under court seal. It also fell under a broad law enforcement exception to the Texas Public Information Act that shields documents involved in ongoing investigations, House investigators said.
Paxton, saying he also had been treated unfairly by law enforcement, asked a deputy attorney general to look into Paul’s request and was unhappy with the decision to withhold the release of the affidavits, according to House investigators. Paxton requested a copy of his agency’s open records handbook, held a lengthy meeting with the chief of his open records division and pressured a deputy to release the records — but the information was ultimately withheld, according to House investigators and the whistleblower lawsuit.
The attorney general’s office receives 30,000 to 40,000 requests each year to rule on open records requests, but this was the first time Paxton had taken a direct interest in a public information matter, according to House investigators.
Paxton also got involved in two other open records requests by Paul for information related to the search warrants.
In March 2020, Paxton asked Vassar, a new deputy who oversaw the agency’s open records division, for information about a records request made to the state Department of Public Safety about its role in the search of Paul’s properties, according to House investigators.
That request contained information the FBI wanted to keep private, saying its release could undermine an ongoing investigation. As a normal part of the open records process, the FBI and DPS provided the attorney general’s office with unredacted copies of the documents so the information they wanted to shield could be reviewed.
During several meetings, Vassar told Paxton that the documents could not be released because the law enforcement exception was “black and white,” House investigator Terese Buess told the committee. Vassar also said releasing the documents would upend years of legal precedent, force law enforcement agencies to sue the state to protect ongoing investigations and ultimately force the attorney general’s office to release documents related to the agency’s own ongoing investigations, Buess said.
“Paxton told him that he had spoken with Nate Paul and that [Paul] was being railroaded. He said he did not want to use his office, the OAG, to help the feds or DPS,” Buess said.
Paxton also directed Vassar to find a way to release the documents, the whistleblower lawsuit said, then later ordered the agency’s written opinion, issued June 2, 2020, to take no position on whether the information should be released.
“That type of a position had not been taken since the 1980s. Very unusual,” Buess told the House committee.
In May 2020, Paul’s attorney made a third records request, this time for a copy of an FBI legal brief opposing the release of DPS records to Paul.
The FBI was notified of the request but did not respond in time to seek approval to withhold the brief. Still, House investigators said, the attorney general’s office could have withheld the documents based on the law enforcement exception.
Instead, Paxton directed the brief to be released, and the agency’s July 24, 2020, opinion concluded that the document could not be withheld.
“These actions of OAG, Paxton, and Vassar at Paxton’s direction are inexplicable in the absence of an illicit motive by Paxton to personally assist his friend, donor and financial associate, Nate Paul and to thereby benefit Paxton himself,” the whistleblower lawsuit said.
Paxton involved AG’s office in Mitte Foundation lawsuit
In 2011, the Roy F. and Joann Cole Mitte Foundation, an Austin nonprofit, invested about $3 million to become a limited partner in several of Paul’s downtown Austin properties.
In 2018, the foundation sued Paul for fraud after he refused to let them see financial documents related to their investments. The two sides agreed to settle the case for $10.5 million, which was due to be paid by Aug. 20, 2019, House investigators told lawmakers.
The FBI raided Paul’s home four days before the deadline, and Paul ultimately defaulted on the settlement, investigators said.
The attorney general’s Charitable Trusts Division has the power to intervene in lawsuits to protect a charity’s assets. Notified, as required by law, about the lawsuit between the Mitte Foundation and Paul’s real estate company, World Class Holdings, the division filed a court notice in January 2020 declining to get involved in the dispute.
Four or five months later, however, Paxton began asking whether his agency should enter the fray but was told intervention was unnecessary because the Mitte Foundation had sued to protect its interests and had hired competent lawyers to do so, the whistleblower lawsuit said.
Even so, Paxton directed the Charitable Trusts Division to intervene in the lawsuit, an action taken “for the purpose of exerting pressure on the Mitte Foundation to settle on terms favorable to Nate Paul,” the whistleblowers alleged.
Josh Godbey, who ran the Charitable Trusts Division, told House investigators that Paxton had never before been so deeply involved in one of his cases.
According to House investigators, Paxton even argued with top agency lawyers, saying he should appear in court to personally argue the Mitte Foundation lawsuit. Paxton had never argued a case on behalf of the attorney general’s office and had left that work to its litigation experts, Buess said.
Godbey told investigators he followed Paxton’s order to file a motion to stay the lawsuit and force the parties into mediation, essentially putting the case on hold until both sides came to an agreement. That went against the wishes of the Mitte Foundation, which was ready to go to trial and whose interest the attorney general’s office was supposedly representing, Buess said.
“The reality of this particular situation was that Nate Paul and World Class were stalling,” Buess told the House committee. “They were stalling any settlement and would drag things out as long as they could.”
Paul and his attorney refused to participate in the mediation. Instead, the Mitte Foundation and the attorney general’s office tried to negotiate a settlement price, according to House investigators. The arrangement was strange because the attorney general’s office was supposed to be working on behalf of the nonprofit, but instead appeared to be pursuing a tactic that would benefit Paul, the whistleblower lawsuit said.
Ray Chester, an attorney for the Mitte Foundation, told investigators that an attorney general employee and a lawyer for Paul pressured him to agree to a new settlement that was worth less than half of the original settlement. The nonprofit’s board rejected that offer.
In October 2020, around the time some of Paxton’s top lieutenants reported his actions to law enforcement, the attorney general’s office withdrew from its intervention in the Mitte Foundation lawsuit.
Paxton presses for legal opinion on foreclosure sales
In the summer of 2020, as Republican state officials were struggling to keep businesses open in the early months of the COVID-19 pandemic, Paxton took an unusual step that perplexed other agency officials, the whistleblower lawsuit said.
On July 31, 2020 — a Friday — Paxton asked Deputy Attorney General Ryan Bangert to research whether in-person foreclosure sales violated COVID-19 protocols, with a legal opinion on the matter to be drafted by the end of the weekend, House investigators told lawmakers.
Not only was that an extraordinarily fast deadline, it “completely thwarted” the established process for issuing legal opinions on public matters, said Donnelly, one of the House committee’s investigators.
Normally, the process begins with a written request from an elected or state agency official. The attorney general’s office has 180 days to respond and frequently takes most of that time to issue an opinion that had been reviewed by several layers of staff. The agency would also give that request a tracking number.
None of those procedures was followed, Donnelly said. According to Paxton, the opinion request was made by phone. But when agency employees called the number provided by Paxton, the person who answered was unaware of the request, which also had no tracking number, Donnelly said.
State Sen. Bryan Hughes, R-Mineola, soon submitted a written request for an opinion on foreclosure sales during the pandemic. Hughes would later say that Paxton staffers asked his office to submit the request and provided the wording for it, House investigators said.
The original version of the written opinion concluded that public foreclosure sales did not violate COVID-19 protocols, but the author was told that Paxton “wanted to find a way to stop the foreclosure sales and that the opinion needed to change,” Donnelly told the House committee.
The opinion was reworked to say public foreclosure sales were not allowed under orders that limited gatherings to 10 people — an unusual position for Paxton to take because the attorney general consistently opposed other restrictions intended to limit the spread of COVID-19, Donnelly said.
Also unusual was the agency’s haste in releasing the opinion by posting it online around 1 or 2 a.m. on a Sunday.
Lawyers for Paul used the opinion to halt a foreclosure sale on several Paul-controlled properties the following Tuesday and later that month, Donnelly said.
“The opinion letter was used by Nate Paul attorneys to attempt to stop foreclosures on some 12 to 13 properties,” he added.
Donnelly also pointed out Paul’s statements, under oath, in a 2021 deposition on a separate legal matter.
“When specifically asked, ‘Did you, Nate Paul, contact Attorney General Ken Paxton regarding foreclosure sales in Texas before the issuance of the attorney general letter?’ — his answer was, ‘Yes, I had. I had contact with him before that, yes,’” Donnelly said.
What Paxton allegedly received in return
According to the whistleblowers, several top officials grew increasingly concerned with Paxton’s advocacy on Paul’s behalf, particularly after learning about several actions that had the appearance of bribes.
Paul donated $25,000 to Paxton’s campaign in 2018, and another $25,000 contribution was made in 2020 by a political action committee associated with the law firm that represented Paul in his legal fight with the Mitte Foundation. Top officials began to believe Paxton was using his office to benefit Paul so those political donations would continue, the whistleblower lawsuit said.
Paul had also apparently helped Paxton fund a remodel of his Austin home in 2020, the whistleblower lawsuit said. The project started as repairs for water damage but turned into a “full renovation of the home, floor to ceiling,” Epley told the House committee.
During those repairs, according to an attorney general’s office employee interviewed by House investigators, Paxton told the on-site contractor that his wife wanted to replace the granite countertops. The contractor responded that the work would cost $20,000, adding: “I’ll have to check with Nate,” Epley said.
Asked if investigators believed the contractor was referring to Nate Paul, Epley replied: “I don't know of another Nate that is relevant to any portion of the inquiry in any way. I know that Nate Paul has ties to commercial real estate and real estate in the Austin area.”
The whistleblowers and House investigators also alleged that Paul hired a woman with whom Paxton was having an extramarital affair.
According to the whistleblower lawsuit, Paxton admitted to several top aides in late 2019 or 2020 that he was in a relationship with a woman who previously worked for a state senator other than his wife. Paxton is married to state Sen. Angela Paxton, R-McKinney, who investigators say learned of the affair in 2019.
In a deposition in the Mitte Foundation lawsuit, Paul said Paxton had recommended the woman for the job at one of his construction companies. But during the deposition, Paul could not say how much she was paid or what construction projects she worked on.
Several employees who learned of the affair — and raised concerns about it to Paxton — were transferred to different jobs and isolated, Epley said. Though given raises, the employees were moved to jobs that had less contact with others in the office, she said.
“The affair was not public,” Epley said. “There was a desire to keep it private.”
Before the House impeachment vote, state Rep. Ann Johnson, a Houston Democrat who was part of the committee that investigated the whistleblower allegations, said the job in Austin saved Paxton from having to drive to San Antonio to see the woman.
The job also helped hide an affair that would be a political liability, she said.
“The affair is important because it goes to Ken Paxton’s political strength,” Johnson said. “He knows that with his folks, he is ‘family values,’ he is a Christian man, and the idea of the exposure of the affair will risk him with his base.”
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