Donor accuses Texas AG Ken Paxton’s office of mishandling complaint that led to staff mutiny

In his fullest public response yet to allegations that place Austin real estate investor Nate Paul at the center of potential criminal violations by Texas Attorney General Ken Paxton, Paul’s attorney, Michael Wynne, wrote in a letter to the attorney general Sunday that his client’s interests have become “collateral damage of apparent dysfunction in the OAG.”

Several of the most senior staff members at the agency brought criminal allegations against their boss to law enforcement, and have accused Paxton of using government resources to serve the financial interests of Paul, a donor. Paxton, in a process senior aides called improper, hired an inexperienced outside attorney to investigate Paul’s complaint against state and federal authorities who raided his home and office last year. That outside attorney’s work has gone beyond the scope of that complaint against authorities, the aides alleged, and targeted institutions where Paul has financial interests with subpoenas.

But Wynne’s letter places the blame for the debacle on the attorney general’s office, alleging top aides there failed to investigate his client’s claims as they should have and “deprived [Paul] of a proper review.”

“The mishandling of this complaint as outlined below has risen to an alarming level,” Wynne wrote in the letter, which also demands that the agency retain all related documents and files in preparation for potential litigation.

Paul’s complaint alleged wrongdoing by federal authorities, including the FBI and a federal magistrate. It was filed with Travis County authorities but ended up at the attorney general’s office in June 2020 after Paxton sought a meeting with Travis County District Attorney Margaret Moore.

Paxton’s office did not immediately respond to a request for comment on Monday, but he has defended his work in investigating the Paul complaint and dismissed the allegations against him as false and coming from “rogue employees.”

On Friday, Paxton’s office said it had closed its maligned investigation into Paul’s complaint, saying it could “only investigate in response to a request for assistance” from the district attorney’s office. Moore has questioned the integrity of the investigation, and her office announced last week that it has closed its file on the matter.

Wynne questioned the attorney general’s office’s basis for closing the inquiry, accused employees in the attorney general’s office of making “numerous inappropriate and false statements to the media” and said their handling of Paul’s complaint culminated in a “chaotic public spectacle of allegations, mudslinging, and an apparent power struggle” within the agency last week.

Top aides to Paxton have said internal investigations showed that Paul’s complaint lacks “any good-faith factual basis” and have accused their boss of serving a donor’s interest by hiring an outside attorney to pursue it.

Wynne said the circumstances of the federal search were “among the most egregious examples of inappropriate behavior by government officials” that he had witnessed.

In May 2020, Paul “sought guidance on the protocol for reporting a complaint” about the search and was told by Paxton to file it with the Travis County District Attorney’s office.

The next month, the district attorney’s office referred the complaint back to Paxton’s agency after determining it would be “inappropriate” to send it to the Department of Public Safety, which was named in the complaint.

Wynne said “seven weeks of inaction” were followed by a series of meetings between him, Paul and officials in the attorney general’s office, whom he accused of being “hostile.”

At a meeting on July 21, the attorney general’s director of law enforcement, David Maxwell, “berated and insulted” Paul for bringing the complaint and attempted to intimidate them into dropping the matter, Wynne alleged.

He wrote that Maxwell and another top official — Mark Penley, one of the signatories on the letter about Paxton — attended a second meeting, in which Maxwell at one point yelled at Paul and asked “who [does] he think he is?”

At a third meeting, personally attended by Paxton, the review was found to be flawed and “appeared to be an embarrassment to your office,” Wynne alleged.

Paxton appointed an inexperienced outside lawyer — Brandon Cammack, who has ties to Wynne — to investigate Paul’s complaint when it “became clear the [Office of Attorney General] staff would not fairly fulfill its duties to review” it. Wynne, Paul and Cammack met “a few times” in September, Wynne said.

Paxton has since placed both Maxwell and Penley on leave, according to top aides at the agency.

The letter comes a few days after a Travis County judge rebuked Wynne and Paul in a case connected to Paul’s firm and the nonprofit Roy F. & Joann Cole Mitte Foundation. Judge Jan Soifer sanctioned Wynne, and said their lawsuit had been “brought in bad faith” and “for the purpose of harassment.”

Paxton’s office intervened in a legal dispute between the Mitte Foundation and Paul’s companies this summer, but withdrew shortly before the attorney general’s aides complained about their boss.