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Paxton reaches tentative deal to pay $3.3M to former staff. Where will the money come from?

Texas Attorney General Ken Paxton.
Jorge Sanhueza-Lyon
Texas Attorney General Ken Paxton.

Attorney General Ken Paxton and four former top deputies who said he improperly fired them after they accused him of crimes have reached a tentative agreement to end a whistleblower lawsuit.

In October 2020, the former deputies accused Paxton of using his office for political favors for one of his friends and political donors. They claimed Paxton got involved in the legal case of his friend Nate Paul, a real estate developer, while his business was under federal investigation.

The four staffers were then fired and claimed it was in retribution for speaking up. The terms of the settlement require Paxton to apologize and pay his former staff $3.3 million.

Sergio Martínez-Beltrán, who covers state politics for the Texas Newsroom, said that despite the apology, Paxton did not admit any wrongdoing in the settlement.

“In his filing, his attorney said that he accepted that plaintiffs are getting the money that they thought was right and apologized for referring to them as ‘rogue employees.’ That’s the term he used to refer to the whistleblowers in a news release in 2020,” he said. “Paxton also said that he decided to settle because he wanted to serve his third term unburdened by unnecessary distractions.”

It is still unclear where the $3.3 million promised in the settlement will come from.

“Usually when a government agency or entity has to pay as part of a lawsuit or a settlement, it is the government who pays for it. So the taxpayers, you and I, pay for it,” Martínez-Beltrán said. “But the Texas Legislature has to approve the payment, and we are starting to see some opposition there.”

This opposition is coming from members of Paxton’s own Republican Party, including House Speaker Dade Phelan, who said in an interview with CBS Dallas that Paxton will have to come in front of a House panel and justify why taxpayers need to pay for the settlement.

Another key Republican lawmaker, Rep. Jeff Leach, who chairs the Judiciary and Civil Jurisprudence Committee in the House, also said he was troubled with taxpayers footing the bill for the settlement.

“If the Legislature decides not to appropriate the money, I don’t think we’re clear what would happen,” Martínez-Beltrán said. “State law says that in cases of retaliation, the plaintiffs can sue the state agencies or local government entities. So, again, that’s why I say we’re not completely clear. We don’t know still if the money would have to come out of the attorney general’s pockets at the end of the day.”

Democrats in the Legislature have also expressed opposition to using state funds to pay the settlement. And Martínez-Beltrán said the whistleblowers have expressed concerns about what will happen if the state does not agree to allocate funding for the settlement.

“They are worried about the precedent this would set. They are very concerned about Dade Phelan’s decision to not support using public funds to pay for the settlement,” he said. “I think it’s important to mention that one of the things that they told the Texas Tribune is that state employees cannot be expected to report government corruption in the future if they know the Legislature won’t back their rights. So that’s where they’re standing right now.”

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