Paxton’s office: Cheaper to settle suit
Push for state to pay now comes after Phelan knocked using taxpayer funds to resolve case
Days after the Texas House speaker openly opposed using taxpayer dollars to settle a whistleblower suit against Attorney General Ken Paxton’s office, a top agency lawyer said avoiding the payout would only end up costing the state more.
“It’s ultimately in the interest of the state from a financial perspective” to pay the settlement now, Assistant Attorney General Chris Hilton told a panel of House budget writers. “Financially speaking, there is no upside for the state to this case; even total vindication at trial results in a significant expenditure.”
Hilton said the agency has already racked up $600,000 in legal fees fighting the lawsuit. The agency is required to use outside lawyers in the case because of the conflict of interest, which has driven up the cost, Hilton said.
The settlement, announced earlier this month, would end a two-year-old complaint from former aides who said Paxton fired them in retaliation for alleging he had taken bribes and abused his power to help a friend and campaign donor. If the Legislature does not approve the funds, the lawsuit will continue unless Paxton can find an alternative funding source.
House Speaker Dade Phelan, R-Beaumont, said last week that he didn’t think the settlement was a proper use of taxpayer money and that Paxton was going to have to “make a case” to lawmakers otherwise.
Paxton, a Republican, was present Tuesday but deferred to his team for most answers.
State Rep. Jarvis Johnson, D-Houston, asked Paxton directly whether he would use his own campaign dollars. Hilton interjected, noting that the lawsuit is against the agency, not Paxton personally.
“There is no whistleblower case where any individual has paid anything because the individual is not liable under the terms of the statute,” Hilton said. He added, “Under the terms of the settlement, there is no admission of fault or liability or wrongdoing by any party.”
Under the state’s election
code, Paxton is allowed to use campaign funds to cover his legal defense. Since he was sued in his official capacity, those costs are not considered a “personal use.”
It’s a different scenario than in 2016 when Paxton wanted to use out-ofstate gifts to cover his legal defense in the ongoing securities fraud case against him. The Texas Ethics Commission at the time warned Paxton he would violate the law if he used those funds because the accusations in that case did not stem from his officeholder duties.
On Thursday, state prosecutors said the Department of Justice had transferred the most recent corruption case out of the hands of federal attorneys in Texas and into the Washington-based Public Integrity Section.
The reason for the shift was unclear, though Paxton’s attorneys had requested it.
Tuesday’s budget hearing was the first time Paxton has faced lawmakers since the settlement was announced. Some House members seemed resigned about their options.
Texas Rep. David Spiller, R-Jacksboro, and Rep. Steve Allison, R-San Antonio, said the state seems to lose no matter if they pay now or after a hypothetical trial concludes.
“Even if you win, there is no ‘win,’” Spiller said, referring to how the state would still owe outside lawyers.
“We’re kind of in the proverbial rock and a hard place," Allison said.”Either we pay $3.3 million now or pay far more than that either in additional legal expenses or (because of) an unfortunate result.”
State Rep. Mary González, an El Paso Democrat who chairs the subcommittee, questioned whether Paxton is acting in the public’s interest.
She noted Paxton has declined to represent some state agencies, a key duty of his office, leaving them to pay for outside legal counsel out of their own budgets and at an additional cost for taxpayers. An ongoing case by a conservative activist against the Texas Ethics Commission, for instance, has cost the state more than $1 million.
Hilton said that occurs only in a “tiny percentage” of cases, about 60 in the last year, most of which he said were because the agencies had asked for their own counsel. Others were because the statute did not allow the office to represent an agency, Hilton said, and a smaller amount were because a case conflicted with the state’s obligation to “uphold the Constitution.”
“That’s your opinion, in some ways,” González said.
Paxton responded himself, saying in some cases “they’re asking us to go out and represent a position that’s opposite to what we’ve taken in other cases” and the office can’t do that. “I think of 38,000 cases, it is rare that we assert the constitutional issue,” he said. “If we’re given a case that appears to us clearly to be unconstitutional, they want us to take a position against the constitution, that’s a real problem for me, given my oath.”