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Will Texas taxpayers foot Paxton's $3.3 million whistleblower settlement bill? Maybe.

Jorge Sanhueza-Lyon
Four of Ken Paxton's top deputies accused the attorney general of using his office to provide political favors for political donors and one of his friends.

The Texas Office of the Attorney General hinted on Tuesday that it’s unlikely Ken Paxton will have to pay out-of-pocket for a $3.3 million settlement.

This could mean taxpayers would have to pay the millions of dollars on his behalf.

“Under the [Texas] Whistleblower Act, the agency, the Office of the Attorney General, is the proper defendant,” Chris Hilton, chief of the agency’s general litigation division, told lawmakers. “Because the agency is a defendant, that money needs to be specifically appropriated by the Legislature.”

The multimillion-dollar settlement stems from a 2020 lawsuit brought under the Texas Whistleblower Act. Four of Paxton’s top deputies accused him of using his office to provide political favors for political donors and one of his friends.

Under the recent settlement agreement, Paxton did not admit any wrongdoing. Instead, his attorneys said “Paxton accepts that plaintiffs acted in a manner that they thought was right and apologizes for referring to them as ‘rogue employees.'”

In a House Appropriations Committee hearing Tuesday, Chair Rep. Mary González, D-Clint, asked what would happen if the Legislature decides to not appropriate the funds for the settlement. Hilton responded that the settlement is “in the best interest of the state.”

“The agreement itself is contingent on legislative funding,” he said. “It's a settlement that we made in order to save money for the state of Texas — It was the prudent thing to do to minimize litigation risk.”

Hilton added that the state has already spent nearly $600,000 defending the case, and if they were to litigate the case and lose in court, the state could end up paying more than the $3.3 million agreed to under the settlement.

When asked whether the money can come from Paxton’s campaign account, Hilton said, “there is no whistleblower case where any individual has paid anything because the individual is not liable under the terms of the statute.”

Phelan other Republicans show resistance

Securing the funding for the settlement seems like it could be somewhat challenging for Paxton.

House Speaker Dade Phelan recently told CBS Dallas that Paxton will have to convince House members to foot the bill.

“He's going to have to appear before the appropriations committee and make a case to that committee as to why that is a proper use of taxpayer dollars,” Phelan told the news outlet. “He's going to have to sell it to 76 members of the Texas House.”

Phelan said he doesn’t support using taxpayer dollars for the settlement.

Meanwhile, Gov. Greg Abbott told The Texas Tribune last week, “this is an issue that the attorney general is going to have to fully explain to both the House and the Senate.”

But the attorneys for the whistleblowers have said they are concerned with the opposition from lawmakers to pay for the settlement.

According to The Tribune, the attorneys for the four former employees said “state employees cannot be expected to report government corruption in the future if they know the Legislature won’t back their rights under the statute it passed for the very purpose of protecting them.”

Sergio Martínez-Beltrán is the former Texas Capitol reporter for The Texas Newsroom.
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