Former aides file whistleblower lawsuit alleging retaliation by Texas Attorney General Ken Paxton

At 9 a.m. on Monday, Nov. 2, David Maxwell and Mark Penley, then two top aides to Texas Attorney General Ken Paxton, reported separately to the agency’s offices, where, they claim, they were subjected to hours of “irregularities, harassment and retaliation.” Then, they say, when pressured to resign, they refused.

Eight hours later, they were fired.

Penley, the agency’s former deputy attorney general for criminal justice, and Maxwell, its former director of law enforcement, claim in a new whistleblower lawsuit that this treatment came after they, along with six of their senior colleagues at the agency, reported Paxton to authorities. They alleged their boss had broken the law by using the agency to serve the interests of a political donor and friend, Nate Paul, an Austin real estate investor.

Maxwell and Penley — who had been on leave for a month before their termination — are two of the four senior aides who sued the Texas attorney general’s office Thursday, claiming they suffered unlawful retaliation. Blake Brickman, who was fired in October, and Ryan Vassar, who has been on paid leave for weeks, also signed on to the lawsuit.

The lawsuit, filed in Travis County District Court under the Texas Whistleblower Act, paints the clearest picture yet about what motivated the whistleblowers to come forward against Paxton, the state’s top legal authority, and the retribution they say they experienced after they made that report.

Over a period of months, they wrote, “the Attorney General became less rational in his decision making and more unwilling to listen to reasonable objections to his instructions, and placed increasing, unusual priority on matters involving Paul.”

Penley and Maxwell were once leaders of the 4,000-person agency. But when they arrived Nov. 2, staff was told that Maxwell, a law enforcement officer for some five decades, could not enter the building armed; Penley was escorted up the elevator by an armed guard, according to the suit.

For hours, Penley and Maxwell claim in the lawsuit, they were interrogated by Paxton’s new deputy, Brent Webster, who refused to bring a witness into the room and “engaged in a charade under the guise of an administrative investigation interview, but it was apparent that the Whistleblowers’ complaints about Paxton’s misconduct were the driving force.”

Spokespeople for Paxton and for the attorney general’s office did not immediately return requests for comment on the lawsuit.

In a Friday interview with KXAN, Paxton said he did not fire the aides in retaliation, but because of "legitimate issues unrelated to me that ended up resulting in their termination." He added that he had not yet read the aides' lawsuit, but dismissed their allegations, claiming, "everything I've seen is untrue."

"It's claims by people, and those things have to be proven in our American system," Paxton said.

In response to the interview, TJ Turner and Tom Nesbitt, attorneys for Brickman, said in a joint statement, "Ken Paxton keeps doubling down on his lies. Fortunately, we do not think anyone believes a word he says."

"We will let our petition, the plaintiffs’ reputations, and Ken Paxton’s reputation speak for themselves," they added.

Eight aides in total made reports to law enforcement. Three have since resigned and one other, Lacey Mase, was fired last month.

“The most senior members of the [office of the attorney general] believed in good faith that Paxton was breaking the law and abusing his office to benefit himself as well as his close friend and campaign donor,” the whistleblowers wrote in the lawsuit. “Paxton responded to the report immediately and with ferocity, as though he was trying consciously to show Texans exactly what retaliation against whistleblowers looks like… It is hard to imagine more flagrant violations of the Texas Whistleblower Act.”

The whistleblowers are asking for reinstatement, as well as compensation for lost wages, future loss of earnings and damages for emotional pain and suffering. If they succeed, it will be taxpayers, not Paxton himself, who bear the majority of the litigation costs.

Under the Texas Whistleblower Act, any adverse action taken against whistleblowers within 90 days of their report to authorities is “presumed” to be retaliation for that report. The firings, as well as other actions alleged in detailed complaints to the agency’s human resources department, all fit within that three-month time frame.

Paxton has dismissed the whistleblowers as “rogue employees” wielding “false allegations.” But media reports in The Texas Tribune and other outlets, as well as public documents, show four instances when the attorney general’s office intervened in a legal matter in a manner that seemed to help Paul — events that are also detailed in the new lawsuit.

Paul and Paxton are friendly, but the full nature of their relationship remains unclear. Paul donated $25,000 to Paxton’s reelection campaign in 2018. Paul said in a court deposition last week that they have known each other for years and sometimes had lunch together. Asked whether they were friends, Paul said, “I consider the relationship, you know, positive.”

Paul also revealed during the deposition that he employed a woman at his company at Paxton’s recommendation. Paul said employing the woman was not a favor to Paxton. But the woman was involved in an extramarital affair with the attorney general, according to two individuals who said Paxton told them of the relationship in 2018.

The 37-page whistleblower suit provides a detailed look at many of the favors that top aides say Paxton did for Paul.

The campaign began in fall 2019, according to the lawsuit, when staff at the attorney general’s office began feeling pressure to help Paul’s attorneys obtain information through a number of open records requests he had submitted to other state agencies. Paul was seeking information related to an August 2019 raid, by state and federal authorities, on his home and office.

The attorney general’s office is responsible for resolving disputes on open records laws, and Paxton urged his staff to allow the documents to be released to Paul and his legal team — even though, in at least one case, “longstanding [office of the attorney general] precedent and sound principles indicated that disclosure of the documents should be prevented,” the lawsuit said.

In June, Paxton took “a deep personal interest” in a routine lawsuit between an Austin charity, the Roy R. and Joann Cole Mitte Foundation, and Paul’s firm. The attorney general’s office had already declined to get involved in the case, but Paxton directed the agency to reverse itself and intervene. The effort, according to the whistleblowers and an attorney for the charity, was intended to help Paul’s interests at the expense of the philanthropic group.

In late July, according to the lawsuit, Paxton directed top aides to issue a legal opinion that would prove critical for Paul’s business interests.

“Paxton made clear that he wanted OAG to express a specific conclusion: that foreclosure sales should not be permitted to continue,” the lawsuit claims.

Just days after the opinion was issued, in early August, Paul’s attorneys used it to stave off foreclosure sales of several of Paul’s properties.

But for the whistleblowers, the most troubling example came this fall, when Paxton hired a 34-year-old Houston defense attorney, Brandon Cammack, to vet complaints made by Paul that he had been mistreated during the 2019 raid on his home and office.

Maxwell and Penley had been tapped to look into Paul’s complaints given their leading roles in law enforcement and criminal justice. But they had found, according to the lawsuit, “no credible evidence existed to support any state law charges.”

When Penley said he believed the investigation should be closed, Paul, his attorney and Paxton all “pushed back.”

Paxton soon turned to an outside investigator, Cammack, to vet Paul’s complaints against authorities, hiring the young lawyer through a process his top aides characterized as unusual and improper.

The office also considered hiring Joe Brown, a former U.S. attorney in the Eastern District of Texas and onetime Grayson County district attorney. Brown told The Texas Tribune he interviewed for the job in late August but eventually negotiations stalled.

Emails Brown sent the agency show he was concerned about allowing the attorney general’s office — or Paxton himself — to direct a probe that would ultimately lead to prosecution. One of the authorities Paul targeted in his complaint was the Texas State Securities Board, which in 2014 fined Paxton $1,000 for violating the Texas Securities Act, a law he was later indicted for violating.

“While I will fully investigate the circumstances related to the referral received, and provide a report related to any potential criminal charges, I am not committing to handling the prosecution of any resulting case,” Brown said in an email to the agency.

But he added that he might be willing to take on such a prosecution “after any ethical conflicts which could arise have been fully considered.”

Ultimately, the agency opted to hire the less experienced Cammack — Paxton’s decision, according to the lawsuit.

Matters came to a head, the whistleblowers say, when Cammack obtained more than three dozen subpoenas that they thought targeted Paul’s enemies.

On Sept. 30 and Oct. 1, the whistleblowers told law enforcement they believed Paxton had broken the law.

The retaliation, they claim, came swiftly, beginning with disparaging statements issued to the media.

The former senior aides said they were excluded from meetings, kept from seeing critical documents, prevented from completing their job responsibilities and believed they were being electronically surveilled after reporting Paxton to law enforcement. Some also complained that an armed guard had been stationed on their floor, in what they saw as an intimidation attempt, and that a stack of cardboard boxes had been delivered near their offices, in what some interpreted as a signal to pack up and leave, according to the complaints filed with human resources.

On Oct. 19, Vassar was called to Webster's office. When Vassar arrived, he claims in the lawsuit, he was put on leave without explanation, his agency-issued devices were confiscated and he was escorted out of the building by a sergeant.

On Oct. 20, Webster called Brickman to his office to discuss a question Brickman had sent via email. Along with Webster, an armed guard and human resources employee were present, the lawsuit states. Webster fired Brickman for being “insubordinate.”