Investigators detail years of alleged misconduct by Texas AG Ken Paxton in stunning House Committee hearing

A Texas House committee heard stunning testimony from investigators Wednesday over allegations of a years-long pattern of misconduct and questionable actions by Attorney General Ken Paxton, the result of a probe the committee had secretly authorized in March.

In painstaking and methodical detail in a rare public forum, four investigators for the House General Investigating Committee testified that they believe Paxton broke numerous state laws, misspent office funds and misused his power to benefit a friend and political donor.

Their inquiry focused first on a proposed $3.3 million agreement to settle a whistleblower lawsuit filed by four high-ranking deputies who were fired after accusing Paxton of accepting bribes and other misconduct.

Committee Chair Andrew Murr said the payout, which the Legislature would have to authorize, would also prevent a trial at which evidence of Paxton’s alleged misdeeds would be presented publicly. Committee members questioned, in essence, if lawmakers were being asked to participate in a cover-up.

“It is alarming and very serious having this discussion when millions of taxpayer dollars have been asked to remedy what is alleged to be some wrongs,” Murr said. “That’s something we have to grapple with. It’s challenging.”

Many of the allegations detailed Wednesday were already known, but the public airing of them revealed the wide scope of the committee’s investigation into the state’s top lawyer and a member of the ruling Republican Party. The investigative committee has broad power to investigate state officials for wrongdoing, and three weeks ago the House expelled Bryan Slaton, R-Royse City, on its recommendation.

In this case, it could recommend the House censure or impeach Paxton — a new threat to an attorney general who has for years survived scandals and been reelected twice despite securities fraud charges in 2015 and news of a federal investigation into the whistleblowers’ claims in 2020.

Erin Epley, lead counsel for the investigating committee, said the inquiry also delved into the whistleblowers’ allegations by conducting multiple interviews with employees of Paxton’s agency — many of whom expressed fears of retaliation by Paxton if their testimony were to be revealed — as well as the whistleblowers and others with pertinent information.

According to state law, Epley told the committee in a hearing at the Capitol, a government official cannot fire or retaliate against “a public employee who in good faith reports a violation of law … to an appropriate law enforcement authority.”

The four whistleblowers, however, were fired months after telling federal and state investigators about their concerns over Paxton’s actions on behalf of Nate Paul, an Austin real estate investor and a friend and political donor to Paxton.

“Each of these four men is a conservative Republican civil servant,” Epley said. “Interviews show that they wanted to be loyal to General Paxton and they tried to advise him well, often and strongly, and when that failed each was fired after reporting General Paxton to law enforcement.”

Epley and the other investigators then walked the committee through the whistleblowers’ allegations, including that Paxton gave Paul help that went beyond the normal scope of his duties.

“I ask that you look at the pattern and the deviations from the norm, questions not just of criminal activity but of ethical impropriety and for lacking in transparency,” Epley told the committee. “I ask you to consider the benefits [for Paxton].”

In an effort to help Paul with various legal troubles, investigators said they believe Paxton committed possible crimes and ignored subordinates who warned that what he was doing was illegal. Investigator Donna Cameron said these include the felony offenses of:

• Abuse of official capacity, for allegedly diverting senior employees to perform work that benefited Paul, providing at least $72,000 in taxpayer-funded labor costs.
• Misuse of public information, for allegedly providing Paul with an internal FBI file related to an investigation into the developer.
• Misapplication of fiduciary property, for allegedly hiring an outside lawyer for $25,000 to work inside the attorney general’s office, without the knowledge or consent of senior staff, to perform work that principally benefited Paul.

The public hearing to receive the investigators’ verbal report was rare for a committee that typically conducts its business in private. After listening to three hours of testimony, committee members gathered in a nearby room shortly after 11 a.m. to discuss the information in private, emerging about an hour later to report that no action had been taken in executive session.

Committee members declined to discuss the day’s events.

Minutes into the hearing, Paxton called into a Dallas radio show and blasted the investigation as unprecedented. As for the settlement, Paxton told host Mark Davis that his office always knew it would be the Legislature’s decision whether to authorize taxpayer money for it,adding that he was shocked the Republican-controlled House has not.

Paxton later released a statement blasting the “committee appointed by liberal Speaker Dade Phelan” for sabatoging his work as attorney general.

“Every allegation is easily disproved, and I look forward to continuing my fight for conservative Texas values,” he said.

As the hearing unfolded, Public Citizen, a consumer advocacy nonprofit, called on Paxton to resign.

“If he refuses to go willingly, the Texas Legislature must act to remove him,” Adrian Shelley, Public Citizen’s Texas director, said in a statement. “A running series of scandals and an alleged pattern of corruption have clouded Paxton’s entire time in office. The people of Texas simply can’t trust that he is working for their interests, not his.”

Rep. Jeff Leach, a Plano Republican and chair of the Judiciary and Jurisprudence Committee, urged his Twitter followers to watch Wednesday’s hearing on “an issue of vital importance to all Texans.”

“Make no mistake: The Texas House will do our job and uphold our oaths of office,” he added.

The hearing capped a whirlwind 24 hours at the Capitol during which Paxton unexpectedly called on Phelan to resign, alleging the Beaumont Republican recently presided over the chamber while drunk. Hours later, the investigative committee revealed it was looking into Paxton, and Phelan dismissed the attorney general’s request that he step down as a “last ditch effort to save face.”

Phelan's spokesperson, Cait Wittman, went further Wednesday afternoon.

“The Attorney General appears to have routinely abused his powers for personal gain and exhibited blatant disregard for the ethical and legal propriety expected of the state’s leading law enforcement officer," Wittman said, adding that Phelan would support whatever actions the committee may recommend.

Spokespeople for Gov. Greg Abbott and Lt. Gov. Dan Patrick did not respond to requests for comment.

During Wednesday's hearing committee investigators said their probe involved Paxton’s actions to help Paul, who contributed $25,000 to Paxton’s campaign in 2018.

The relationship between Paxton and Paul was the basis of whistleblower complaints to state and federal authorities. They alleged that Paxton had used his office to benefit his friend. That sparked an FBI investigation in November 2020.

Lawyers for the whistleblowers thanked the committee for its work, saying it helped to combat corruption and protect the public. Noting that the investigation would not have been possible without their clients’ report to authorities, the lawyers also urged lawmakers to approve their settlement with Paxton.

“The Committee recognized that these men suffered real harm in retaliation for their loyalty to their oaths as public servants. Now the State must honor its solemn promise to compensate them for their lost wages and other damages,” they said in a statement after the hearing. “Good governance demands nothing less. No public employees, especially those left at the AG’s office, are going to report this kind of public corruption in the future if the legislature leaves our clients hung out to dry.”

The committee began the hearing by introducing its team of five investigators, including multiple attorneys who have served as prosecutors specializing in white-collar crime and public integrity cases.

The team included Epley, a former prosecutor for Harris County who also worked for former U.S. Attorney Ryan Patrick, a President Donald Trump appointee and Lt. Gov. Dan Patrick’s son; Terese Buess, a veteran prosecutor with the Harris County district attorney’s office; Mark Donnelly, who served 12 years as a prosecutor for the U.S. attorney’s office for the Southern District of Texas and served for two years as that office’s fraud division chief, specializing in white-collar crimes; Cameron, a career prosecutor in various Texas counties with experience prosecuting public officials; and Brian Benken, a former prosecutor with the Harris County district attorney’s office with more than 30 years of legal experience. The group also worked with a former Houston Police Department officer in its investigation.

The investigators interviewed 15 employees for the attorney general’s office, including Joshua Godby, who worked for the open records division when Paxton pressured the division’s staff to get involved in a records fight to benefit Paul in a lawsuit.

Out of the 15 people, investigators said, all except one expressed concern about retaliation from Paxton for speaking on the matter. The investigators also interviewed a special prosecutor, Brian Wice, in a separate securities fraud case that has been ongoing for eight years, as well as representatives for the Mitte Foundation, an Austin nonprofit involved in a legal dispute with Paul.

The investigators outlined the alleged favors Paxton did for Paul. In exchange, Paul helped with a “floor-to-ceiling renovation” of Paxton’s Austin home and employed a woman with whom Paxton was allegedly in a relationship. Paxton is married to state Sen. Angela Paxton, R-McKinney, who learned of the affair in 2019, leading to a brief hiatus in the relationship before it resumed in 2020, Epley told the committee.

No building permits for the renovation work were filed with the city of Austin, and the committee previously issued subpoenas to an unnamed individual and to a Paul-owned business for additional information, according to Wednesday’s testimony.

Investigators also found that Paxton and his wife owned a condo and home in Austin, a house in College Station and another in Collin County — with an indication that two properties have a homestead exemption when state law allows for only one.

“That’s duly noted,” Murr said.

The investigative committee has broad power to investigate potential wrongdoing by House members as well as officials and departments throughout state government. It can subpoena witnesses and records and recommend the impeachment of state officials.

This session, the committee’s three Republicans and two Democrats have demonstrated they take this oversight role seriously. The committee quickly investigated allegations that Slaton had an inappropriate sexual relationship with a 19-year-old aide in his office and also provided her alcohol. The committee’s report found these claims to be true, and the House expelled Slaton on May 9 based on its recommendation.

Only the Texas House can bring impeachment proceedings against state officials, which would lead to a trial by the Senate. Removal requires two-thirds support in both chambers. This has only happened twice in Texas history, to Gov. James Ferguson in 1917 and District Judge O.P. Carrillo in 1975.

Paxton served 10 years in the Texas House beginning in 2003, followed by two years in the Senate, before becoming attorney general in 2015.

Although the regular legislative session will end Monday, the House investigative committee can meet whenever it pleases. A special session to consider impeachment can only take place, however, with the permission of the governor, of the House speaker and 50 members, or of a majority of all House members.