Third Court of Appeals in Austin Tell AG Ken Paxton to Get Ready for Trial by 4 Whistleblowers

Texas attorney general can’t dodge suit from fired whistleblowers

OCT 21, 2021 | REPUBLISHED BY LIT: OCT 21, 2021

AUSTIN, Texas (CN) — A Texas appeals court in Austin denied Republican Attorney General Ken Paxton’s request to dismiss a case over his firing of four high-ranking staff members who reported him to investigators on claims he accepted bribes from a campaign donor.

Thursday’s ruling from the Third Court of Appeals held that the former state employees can pursue their claims under the Texas Whistleblower Act.

James Blake Brickman, J. Mark Penley, David Maxwell, and Ryan M. Vassar were fired from the Office of the Attorney General last November after they reported to the FBI and the Texas Rangers that Paxton had used his office to interfere with criminal investigations into his campaign donor, Austin real estate investor Nate Paul.

A total of eight employees accused Paxton of wrongdoing, and four of them sued him for retaliation. They demand their jobs back, payment of back wages and unspecified damages for injury to their reputations. They also seek $15,000 in fines for each alleged violation of the Texas Whistleblower Act.

Paxton countered with a motion to dismiss, asserting sovereign immunity from the suit and claiming that the accusations have no basis in fact. Moreover, the attorney general’s office argued that Paxton, as an employer, can fire any employees he feels are not sufficiently loyal or he has lost confidence in.

A trial court judge rejected the attorney general’s argument and the case moved to the Third Court of Appeals, which heard arguments in the case last month.

In Thursday’s ruling, Chief Justice Darlene Byrne wrote that while employers in Texas can generally terminate their employees for any reason, whistleblowers in state government are an exception.

“A state employer cannot fire an employee because he reports illegal conduct by the employer,” wrote Byrne. “We hold that appellees adequately pled that they in good faith reported to appropriate law enforcement authorities suspected violations of the law by the Office of Attorney General and Ken Paxton, as leader of the agency.”

Byrne, a Democrat, concluded that siding with the Republican attorney general’s position on the Texas Whistleblower Act “would have the effect of stripping whistleblower protections from employees who might report misconduct by the thousands of elected officials throughout the state.”

Paxton, who is running for reelection in 2022 and has the backing of former President Donald Trump, was accused of using his position as the state’s top cop to benefit Paul, his friend and donor. Paxton’s connection to the real estate developer is both political and personal. The whistleblowers say Paul has been a financial supporter of Paxton’s political career and Paul remodeled Paxton’s Austin home. They also claim Paul hired a woman whom Paxton was having an affair with.

The lawsuit alleges Paxton helped the developer when many of his properties were in the process of being foreclosed upon. Paul was also being investigated by the FBI at this time and had warrants issued for his home and offices to be searched, according to the complaint.

The whistleblowers say Paxton told staff at the attorney general’s office to “act on Paul’s behalf.” Maxwell and Penley claim they were assigned to investigate a criminal complaint Paul brought accusing those who issued and executed the search warrants for his home and offices of violating his rights.

Maxwell and Penley informed Paul that no evidence supported his complaint and recommended closing the investigation, to which Paxton objected. The attorney general allegedly pressured Vassar to release an unredacted copy of Texas Department of Public Safety documents, despite the FBI urging the office to not release documents pertaining to ongoing investigations.

It is unclear whether Paxton will appeal Thursday’s decision to the Texas Supreme Court.

Paxton has served as Texas attorney general since 2015, and this is not his first time in court since assuming office. In his first year in office, Paxton was indicted on felony securities fraud charges. In that ongoing case, he is accused of attracting investors to purchase shares in a software company without disclosing he would be paid for doing so. That case has been delayed by pretrial motions for more than six years.

In 2018, Paxton won reelection to continue working as the state’s chief law enforcement officer. As he seeks a third term, challengers on both sides of the aisle point to his criminal and civil legal troubles as a reason for voting him out of office.