$3.3M whistleblower settlement with Ken Paxton’s office in jeopardy, lawyers say

AUSTIN — The high-profile settlement agreement reached between a group of whistleblowers and Attorney General Ken Paxton’s office may be in jeopardy, according to the whistleblowers’ lawyers.

The $3.3 million settlement agreement, reached last month, was contingent on funding approval from state lawmakers. But attorneys for the four whistleblowers released a statement on Wednesday stating they are going back to court after they said the agency would not agree to a deadline to secure the money in the current legislative session, which runs through May.

“We would still settle the case if the legislature approved the payment this session, but we cannot and did not agree to give [Office of the Attorney General] the benefit of a settlement while the whistleblowers wait in perpetuity for legislative approval,” the lawyers wrote in a joint statement.

They said they’ll go back to court, “where the taxpayers will end up paying more to defend OAG than they would to settle this case.” The case is pending before the Texas Supreme Court.

“OAG thus reaps all benefits of a settlement, and Respondents achieve none,” the filing said.

Paxton’s agency did not immediately respond to a request for comment Wednesday.

The tentative settlement agreement was met with backlash at the Texas Legislature, as lawmakers balked at having to pay the bill. House Speaker Dade Phelan, R-Beaumont, said he thought it was not a proper use of taxpayer money. His spokesperson declined to comment on the new developments Wednesday.

Paxton’s office, meanwhile, pitched the settlement as a way to avoid expensive litigation costs should the case play out.

The settlement terms include more than a $3.3 million payout for the whistleblowers. Paxton also agreed to apologize for calling them “rogue employees” and state that they “acted in a manner that they thought was right.”

The four former high ranking employees sued Paxton’s office in late 2020, saying they were fired after accusing him of abusing the office to help a campaign donor. They are former Deputy Attorney General for Criminal Justice Mark Penley, former Deputy AG for Legal Counsel Ryan Vassar, former Deputy AG for Policy and Strategic Initiatives James “Blake” Brickman and former Director of Law Enforcement David Maxwell.

Paxton denied their abuse of office allegations and said the ex-employees were perpetrating a politically motivated witch hunt against him.