Prosecution attorneys in the impeachment of Texas Attorney General Ken Paxton sought to demonstrate through a bank official witness that in 2020 the AG stalled foreclosure of properties owned by developer Nate Paul by using a rushed late-night opinion based on COVID restrictions.
The restrictions include prohibiting people from gathering. The AG opinion issued after-business-hours has been called “the midnight opinion.”
Kendall Garrison president and CEO of Amplify Credit Union on Tuesday told prosecuting attorneys the August 2020 midnight foreclosure letter came after Paul had defaulted on loans to the credit union. The letter opinion from Paxton’s office halting foreclosures Garrison said came as a surprise.
“It prohibited foreclosures,” he said. “We had no choice but to pull them.”
“On all three properties to Paul?” Erin Epley the prosecution attorney asked.
“Yes,” Garrison said.
Garrison said options were sought to avoid filing for bankruptcy, that the bank maintained control of the loan notes and in September sold the loans to a third party.
Epley asked who benefitted from the midnight opinion.
“Paul,” Garrison answered.
On cross examination Mitch Little Paxton’s attorney said COVID restrictions including tenant evictions had been suspended under the federal Corona Virus Aid (CARES Act).
“Did the bank want to get back its money as fast as possible?” Little asked.
“By whatever means possible,” Garrison said.
“You sold all three (properties)?” Little asked.
“Right,” Garrison answered.
“You lost zero dollars?” Little said.
“Correct.”
Amplify held notes on three of Paul's Austin properties (worth $11.9 million). Paul eventually lost $138 million from nine foreclosed properties according to KVUE.
On Wednesday the prosecution finished presenting its witnesses. The defense is to call its first witness on Thursday.
Paxton faces 16 articles of impeachment from an original 20 including disregard for public duty, making false statements, bribery, obstructing justice, conspiracy to defraud, dereliction of duty, violation of public trust and using his office to benefit Paul.
Paul has been a political donor for Paxton, a Republican.
Paul claimed that federal officials who raided his home and business in 2019 did so improperly, changing a search warrant from a search for guns and drugs into a search for records.
Paxton allegedly accepted favors from Paul including making renovations to the AG’s residence and a job for a woman with whom Paxton was having an extramarital affair.
Paxton is also accused of seeking revenge against seven AG staffer whistleblowers who went to the FBI.
Defense attorneys from the beginning of the trial have maintained the case was brought about by disloyal staffers who falsely assumed wrongdoing by Paxton and then refused to admit error.
Paul was charged in an eight-count federal indictment in June of 2023 alleging federal crimes in 2017 and 18. Whistleblowers said in return for an opinion from Paxton halting the foreclosures of Paul’s Austin properties under pandemic rules, Paul donated $25,000 to Paxton’s campaign, remodeled his house and provided a job for Paxton’s then-mistress Laura Olson.
Paxton is also accused of directing employees to intervene in a 2018 lawsuit filed by directors of the Roy F. and Joann Cole Mittee Foundation, a quality of life charity nonprofit. The Mitte Foundation invested millions in Paul’s World Class companies in 2011 and then in a dispute over getting access to Paul’s records and getting their money back sued Paul in 2018. In July of 2019 the parties reached a settlement agreement to have World Class buy Mittee’s interest in the companies for $10.5 million.
Prosecution attorneys said the settlement deal Mittee received was at a loss to the charity.
During Tuesday’s session Brandon Cammack the outside attorney hired by Paxton (over the objections of his staff) testified. Cammack was to investigate the legality of federal officers’ search of Paul’s home and business. He told Rusty Hardin the prosecution attorney he was hired by Paxton because as the AG put it, Paxton’s staffers refused to do the investigation.
He added that he found Paul’s allegations of an altered search warrant “convincing.”
“My reaction was that if the allegations were true it was serious,” Cammack said.
“Did you trust the AG?”
“Yes sir.”
“Did you trust Michael Wynne (Paul’s attorney)?”
“Yes.”
Cammack began serving grand jury subpoenas including to banks to obtain information but then received a cease-and-desist letter in late September of 2020 from Mark Penley, a deputy AG and one of the seven whistleblowers.
Cammack said he stopped work on the case after he was told he was being terminated by Paxton’s assistant Brent Webster, at a meeting held at a Starbucks with Paxton and two men in attendance. Cammack said he had a $14,000 invoice for his work to date. He was told to “eat it,” and that Webster had a similar non-paid $40,000 invoice.
The meeting broke off. The participants drove off leaving Cammack without a ride from Starbucks.
“They left you in the street?” Hardin asked.
“That’s what it looked like,” Cammack said.
On cross examination Dan Cogdell Paxton's attorney asked Cammack, “You never believed you were part of a baseless complaint?”
“No sir.”
“You were not there to benefit Paul?”
“No, I never knew him or his entities.”
“If it was suggested it was somehow illegal to investigate a search warrant, that’s not in your world.”
“I would agree,” Cammack said.
Cogdell said Jeff Mateer Paxton’s first assistant AG and one of the whistleblowers never told Cammack, “no no,” (don’t investigate), or that a crime had been committed.
Cammack agreed saying “He (Mateer) was disengaged. He said, ‘Oh, I know something about that (investigation).’”
Cammack said he never got any “push-back” from AG staff until he received the cease-and-desist letter.
“Did Paxton ever ask you to misrepresent?” Cogdell asked.
“No,” Cammack said.
“To lie, cheat or steal?”
“No.”
“To this day you’ve never been paid?”
“Zero dollars,” Cammack said.
“That should have never happened,” Cogdell said. “I apologize.”
“Thank you,” Cammack responded.
Andrew Wicker an executive aide with Paxton was responsible for the AG’s scheduling and worked closely with him including visits to Paxton’s home in Tarrytown, a suburb of Austin.
During testimony on Wednesday, Wicker told Epley he overheard Kevin Wood a contractor say three times in regard to renovation of Paxton’s home that he would check with “Nate” (Paul).
An invoice bank wire regarding Cupertino Builders the Delaware-based contracting firm in October 2020 showed a renovation amount of $121,000.
Wicker said Wood’s references to Paul concerned him. However, he said Paxton gave him assurance that he was not receiving contributions from Paul for the remodeling.
“I was still uneasy,” Wicker said.
Under cross examination Tony Buzbee the attorney for Paxton called Wicker the guy who spent more time than anyone else with Paxton. Buzbee said Wicker had not accused the AG of doing anything wrong and had never seen Paul and Paxton reach any kind of agreement.
Wicker agreed.
“Do you know who paid for the home renovations?” Buzbee asked.
“No.”
“Did house managers (prosecution attorneys) show you receipts?”
“No.”
Buzbee exhibited a (summer 2020) photo of the Paxton kitchen.
“We can see no work was done on the countertops,” Buzbee said.
“The countertops have not been altered,” Wicker agreed.
Blake Brickman a former attorney general for policy and strategy told Hardin that Paxton had praised him through May of 2020 including a personally inscribed book and an award. The good will changed after Brickman said he became concerned that Paxton was breaking the law over his involvement with Paul.
“I witnessed Paxton do brazen things to benefit Paul,” Brickman said.
The whistleblowers went to the FBI without documentary evidence, just their personal recollections.
“You took yourselves to the FBI?” Hardin asked.
“Yes,” Brickman answered.
“These were witness accounts?”
“Yes.”
After Brickman joined the whistleblowers he said Brent Webster Paxton’s assistant came into his office with a woman armed with a gun and threatened his job. Two weeks later Brickman said he was offered by Webster severance pay upon departure or immediate termination.
Declining the severance Brickman recalled that he said, “Brent I did nothing wrong."
Brickman told Hardin, "He (Webster) terminated me."
Brickman said Paxton adopted stalling tactics for two years saying the whistleblower law didn’t apply to him. Called “slow-walking,” the stalling was allegedly designed to keep from the public news regarding the whistleblower lawsuits until after Paxton was reelected to office last year.
A settlement with four of the whistleblowers for $3.3 million was eventually offered. Brickman declined to settle.
“I wanted vindication (instead),” he said.
“What were your conditions (to settle)?” Hardin asked.
Brickman said he wanted Paxton to apologize for calling the whistleblowers “rogue employees” and to agree not to dismiss the whistleblower lawsuit.
Later in the day Hardin exhibited a document from the contractor Kevin Wood (Cupertino Builders) in which the contractor sent emails to Paul in July of 2020 and notified him of the Paxton home renovations as they were being made.
Laura Olson a real estate agent and the woman with whom Paxton was allegedly having an extramarital affair was present in the courtroom, but the presiding judge Lt. Gov. Dan Patrick said she was unavailable to give testimony.
The impeachment trial appears to be moving quicker than earlier expected. The prosecution wrapped up its presentation of witnesses on Wednesday though Hardin admitted to an error when he announced it without allowing the defense to question his last witness. Senators filed out to confer on the matter. Procedurally at this point the trial could have been ended from a motion by Buzbee called a "directed verdict" asking if there was a sufficiency of evidence in the case. If 16 senators voted yes, the motion would pass. The prosecution had an opposing motion. Instead both motions were withdrawn. The senators voted to continue the trial tomorrow with the defense presenting its first witness.