Tag: Bribery

NYC’s ex-school food chief convicted in bribery case tied to icky chicken tenders

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NEW YORK — A man who oversaw food service for New York City schools was convicted Wednesday in a bribery case that picked apart how chicken tenders riddled with bone and bits of metal were served for months in the nation’s biggest public school system.

Former city Department of Education official Eric Goldstein and three men who founded a school food vendor — Blaine Iler, Michael Turley and Brian Twomey — were found guilty of bribery, conspiracy and other charges after a monthlong trial.

It delved into school menus, from yogurt parfait to ravioli. And the trial gave jurors a stomach-churning look at what some students and school staffers encountered when a brand called Chickentopia turned up on their plates in 2016 and 2017.

“Our children depended on nutritious meals served in schools and, instead, got substandard food products containing pieces of plastic, metal and bones,” Brooklyn-based U.S. Attorney Breon Peace said in a statement Wednesday. He called the case “a textbook example of choosing greed” over children’s well-being.

Goldstein’s attorney, Kannan Sundaram, declined to comment. Messages seeking comment were sent to the city Education Department and to attorneys for Iler and Twomey, both from Dallas, and Turley, of Fayetteville, Arkansas.

The charges carry the potential for 20 years in prison. No date has yet been set for sentencing.

As head of the school system’s Office of School Support Services from 2008 to 2018, Goldstein oversaw functions including the food service operation, known as SchoolFood. Iler, Twomey and Turley had a company, SOMMA Food Group, with its eye on the New York City school system.

Around the same time, the three men and Goldstein formed another company to import grass-fed beef. Prosecutors argued that the venture amounted to a conduit for paying Goldstein off.

The SOMMA founders “made sure that they got the key decision-maker at SchoolFood in their pocket so that he would make sure that the D.O.E. served a lot of their food products,” Assistant U.S. Attorney Laura Zuckerwise said in a closing argument this week. “Eric Goldstein got what he wanted, too. He cashed in the power and the resources and the influence of his office to enrich himself.”

According to prosecutors, Iler, Turley and Twomey paid thousands of dollars to Goldstein and his divorce lawyer. Meanwhile, Goldstein helped ensure that the school system bought Chickentopia items and other SOMMA products, sometimes on a fast track.

Then, in September 2016, SOMMA hit a snag: A school system employee choked on a bone in a supposedly boneless Chickentopia chicken tender and needed the Heimlich maneuver, according to documents presented at the trial. For a time, the schools stopped serving the company’s chicken tenders.

They were allowed back two months later — a day after the SOMMA founders agreed to pay Goldstein $66,670 and gave him their shares of the beef business. Goldstein then signed off on reintroducing Chickentopia products, prosecutors said.

The tenders reappeared. So did complaints about foreign objects in them. SchoolFood ultimately ditched SOMMA products in April 2017, according to prosecutors.

Goldstein testified that he couldn’t singlehandedly get a product purchased, saying that the “heavily gated process” could involve a dozen decision-makers. Fast-tracking didn’t mean skipping steps, he said.

He insisted that he was careful to separate his personal business from his city work.

“I always made sure that my D.O.E. responsibilities came first,” he told jurors.

His defense rebuffed the argument that the payments from his beef business partners were bribes, saying the sums were for such things as reimbursing travel expenses.

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June 28, 2023
NYC’s ex-school food chief convicted in bribery case tied to icky chicken tenders

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NEW YORK — A man who oversaw food service for New York City schools was convicted Wednesday in a bribery case that picked apart how chicken tenders riddled with bone and bits of metal were served for months in the nation’s biggest public school system.

Former city Department of Education official Eric Goldstein and three men who founded a school food vendor — Blaine Iler, Michael Turley and Brian Twomey — were found guilty of bribery, conspiracy and other charges after a monthlong trial.

It delved into school menus, from yogurt parfait to ravioli. And the trial gave jurors a stomach-churning look at what some students and school staffers encountered when a brand called Chickentopia turned up on their plates in 2016 and 2017.

“Our children depended on nutritious meals served in schools and, instead, got substandard food products containing pieces of plastic, metal and bones,” Brooklyn-based U.S. Attorney Breon Peace said in a statement Wednesday. He called the case “a textbook example of choosing greed” over children’s well-being.

Goldstein’s attorney, Kannan Sundaram, declined to comment. Messages seeking comment were sent to the city Education Department and to attorneys for Iler and Twomey, both from Dallas, and Turley, of Fayetteville, Arkansas.

The charges carry the potential for 20 years in prison. No date has yet been set for sentencing.

As head of the school system’s Office of School Support Services from 2008 to 2018, Goldstein oversaw functions including the food service operation, known as SchoolFood. Iler, Twomey and Turley had a company, SOMMA Food Group, with its eye on the New York City school system.

Around the same time, the three men and Goldstein formed another company to import grass-fed beef. Prosecutors argued that the venture amounted to a conduit for paying Goldstein off.

The SOMMA founders “made sure that they got the key decision-maker at SchoolFood in their pocket so that he would make sure that the D.O.E. served a lot of their food products,” Assistant U.S. Attorney Laura Zuckerwise said in a closing argument this week. “Eric Goldstein got what he wanted, too. He cashed in the power and the resources and the influence of his office to enrich himself.”

According to prosecutors, Iler, Turley and Twomey paid thousands of dollars to Goldstein and his divorce lawyer. Meanwhile, Goldstein helped ensure that the school system bought Chickentopia items and other SOMMA products, sometimes on a fast track.

Then, in September 2016, SOMMA hit a snag: A school system employee choked on a bone in a supposedly boneless Chickentopia chicken tender and needed the Heimlich maneuver, according to documents presented at the trial. For a time, the schools stopped serving the company’s chicken tenders.

They were allowed back two months later — a day after the SOMMA founders agreed to pay Goldstein $66,670 and gave him their shares of the beef business. Goldstein then signed off on reintroducing Chickentopia products, prosecutors said.

The tenders reappeared. So did complaints about foreign objects in them. SchoolFood ultimately ditched SOMMA products in April 2017, according to prosecutors.

Goldstein testified that he couldn’t singlehandedly get a product purchased, saying that the “heavily gated process” could involve a dozen decision-makers. Fast-tracking didn’t mean skipping steps, he said.

He insisted that he was careful to separate his personal business from his city work.

“I always made sure that my D.O.E. responsibilities came first,” he told jurors.

His defense rebuffed the argument that the payments from his beef business partners were bribes, saying the sums were for such things as reimbursing travel expenses.

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June 28, 2023
Businessman linked to Texas AG Ken Paxton’s impeachment charged with lying to get $172M in loans

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AUSTIN, Texas — A Texas businessman at the center of the scandal that led to the historic impeachment of state Attorney General Ken Paxton was charged Friday with making false statements to mortgage lenders to obtain $172 million in loans.

The federal indictment of real estate developer Nate Paul is the result of a yearslong FBI investigation — a probe Paxton involved his office in, setting off a chain of events that ultimately led to his impeachment and suspension from office last month.

Paul was charged with eight counts of making false statements while seeking loans from mortgage lenders in the U.S. and Ireland. There was no mention of Paxton or the attorney general’s office during the hearing.

Paul, 36, who entered the federal courtroom shackled and wearing jeans, a blue shirt and Nikes, did not enter a plea during his initial appearance in an Austin court nor visibly react as the charges were read. He was released ahead of trial but ordered to surrender his passport and inform the court of any travel outside Texas.

Paul is “adamant that he is not guilty,” defense attorney Gerry Morris said after hearing, adding that he did not know when his client last spoke with Paxton. An attorney for Paxton did not immediately respond to a request for comment Friday.

Paul is accused of overstating his assets and understating his liabilities while seeking loans in 2017 and 2018, including by giving financial institution false and counterfeit records. In one case, prosecutors said, Paul told banks he had $18 million in an account when he had less than $13,000. In another case laid out in the 23-page indictment, Paul is accused of having $28 million in liabilities but giving a credit union in 2018 a far lower number.

FBI agents examining Paul’s troubled real estate empire searched his Austin offices and palatial home in 2019. The next year, eight of Paxton ’s top deputies reported the attorney general to the FBI on allegations of bribery and abuse of office, including for hiring an outside lawyer to examine the developer’s claims of wrongdoing by federal agents.

The allegations by Paxton’s staff prompted an FBI investigation, which remains ongoing, and are central to 20 articles of impeachment overwhelmingly approved by the GOP-led state House of Representatives. They include abuse of public trust, unfitness for office and bribery.

The impeachment accuses Paxton of using his office to help Paul over his unproven claims of an elaborate conspiracy to steal $200 million of the developer’s properties. The bribery counts say that in return the developer employed a woman with whom Paxton had an extramarital affair and paid for expensive renovations to the attorney general’s million-dollar Austin home.

Paxton’s lawyers sought to rebut the latter claim this week by releasing a bank statement that included a 2020 wire transfer purportedly showing Paxton, and not a donor, paying more than $120,000 for a home renovation. But the document raised new questions about the men’s dealings.

The wire transfer was dated Oct. 1, 2020 — the same day Paxton’s deputies signed a letter informing the head of human resources at the Texas attorney general’s office that they had reported their boss to the FBI. The $121,000 payment was to Cupertino Builders, whose manager had done work for Paul and had an email address with his company, state corporation and court records show.

Paul has faced numerous lawsuits from creditors and business partners over the years, with several of his companies filing for bankruptcy or being placed under the supervision of court-appointed overseers. Last year, one of those receivers wrote in a report that Cupertino Builders was used for “fraudulent transfers” from Paul’s business.

Paul has denied bribing Paxton. The attorney general has also broadly denied wrongdoing and said he expects to be acquitted during an impeachment trial in the state Senate, where his wife is a member.

The Senate will set its own rules for a trial that has little precedent, given that Paxton is just the third sitting official in Texas history to be impeached. The proceeding is set begin no later than Aug. 28.

Paxton was separately indicted on securities fraud charges in 2015, though he has yet to stand trial.

___

Bleiberg reported from Dallas.

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June 9, 2023
Texas House votes to impeach Republican Attorney General Ken Paxton

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The Texas House of Representatives voted Saturday to impeach scandal-plagued Republican Attorney General Ken Paxton, triggering his immediate suspension from duties and setting up a trial that could permanently remove the state’s top lawyer from office.

The 121-23 vote constitutes an abrupt downfall for one of the GOP’s most prominent legal combatants, who in 2020 asked the U.S. Supreme Court to overturn President Joe Biden’s electoral defeat of Donald Trump. It makes Paxton only the third sitting official in Texas’ nearly 200-year history to have been impeached.

The historic vote came after a months-long House investigation into the three-term attorney general that resulted in 20 charges alleging sweeping abuses of power, including obstruction of justice, bribery and abuse of public trust.

Paxton, 60, is just the third sitting official to be impeached in the state’s nearly 200-year history.

The House is controlled by Republicans and the matter now moves to the Republican-controlled state Senate. A two-thirds vote by the 31-member Senate would be enough to remove him from office.

Paxton’s wife, two-term state Sen. Angela Paxton, could be among those casting a vote on her husband’s political future.

Paxton has criticized the impeachment effort as an attempt to “overthrow the will of the people and disenfranchise the voters of our state.” He has said the charges are based on “hearsay and gossip, parroting long-disproven claims.”

Texas’ Republican-led House of Representatives launched historic impeachment proceedings against Attorney General Ken Paxton earlier on Saturday as Donald Trump defended the scandal-plagued GOP official from a vote that could lead to his ouster.

The House convened in the afternoon to debate whether to impeach and suspend Paxton over allegations of bribery, abuse of public trust and that he is unfit for office — just some of the accusations that have trailed Texas’ top lawyer for most of his three terms.

The hearing set up what could be a remarkably sudden downfall for one of the GOP’s most prominent legal combatants, who in 2020 asked the U.S. Supreme Court to overturn President Joe Biden’s electoral defeat of Trump.

Paxton, 60, has decried what he called “political theater” based on “hearsay and gossip, parroting long-disproven claims,” and said it’s an attempt to disenfranchise voters who reelected him in November. It’s unclear where the attorney general was Saturday, but during the House proceeding he was sharing statements from supporters on Twitter.

“No one person should be above the law, least not the top law enforcement officer of the state of Texas,” Rep. David Spiller, a Republican member of the committee that investigated Paxton, said in opening statements.

Rep. Ann Johnson, a Democratic member, told lawmakers that Texas’ “top cop is on the take.” Rep. Charlie Geren, a Republican committee member, said without elaborating that Paxton had called lawmakers and threatened them with political “consequences.”

As the articles of impeachment were laid out, some of the lawmakers shook their heads.

Paxton has been under FBI investigation for years over accusations that he used his office to help a donor and was separately indicted on securities fraud charges in 2015, though he has yet to stand trial. Until this week, his fellow Republicans had taken a muted stance on the allegations.

Lawmakers allied with Paxton tried to discredit the investigation by noting that hired investigators, not panel members, interviewed witnesses. They also said several of the investigators had voted in Democratic primaries, tainting the impeachment, and that they had too little time to review evidence.

“I perceive it could be political weaponization,” said Rep. Tony Tinderholt, one of the House’s most conservative members. Republican Rep. John Smithee compared the proceeding to “a Saturday mob out for an afternoon lynching.”

Impeachment requires just a simple majority in the House.

Texas’ top elected Republicans had been notably quiet about Paxton this week. But on Saturday both Trump and U.S. Sen. Ted Cruz came to his defense, with the senator calling the impeachment process “a travesty” and saying the attorney general’s legal troubles should be left to the courts.

“Free Ken Paxton,” Trump wrote on his social media platform Truth Social, warning that if House Republicans proceeded with the process, “I will fight you.”

Abbott, who lauded Paxton while swearing him in for a third term in January, has remained silent. The governor spoke at a Memorial Day service in the House chamber about three hours before the impeachment proceedings began.

Republican House Speaker Dade Phelan also attended but the two appeared to exchange few words, and Abbott left without commenting to reporters.

In one sense, Paxton’s political peril arrived with dizzying speed: The House committee’s investigation came to light Tuesday, and by Thursday lawmakers issued 20 articles of impeachment.

But to Paxton’s detractors, the rebuke was years overdue.

In 2014, he admitted to violating Texas securities law, and a year later he was indicted on securities fraud charges in his hometown near Dallas, accused of defrauding investors in a tech startup. He pleaded not guilty to two felony counts carrying a potential sentence of five to 99 years.

He opened a legal defense fund and accepted $100,000 from an executive whose company was under investigation by Paxton’s office for Medicaid fraud.

An additional $50,000 was donated by an Arizona retiree whose son Paxton later hired to a high-ranking job but was soon fired after displaying child pornography in a meeting.

In 2020, Paxton intervened in a Colorado mountain community where a Texas donor and college classmate faced removal from his lakeside home under coronavirus orders.

But what ultimately unleased the impeachment push was Paxton’s relationship with Austin real estate developer Nate Paul.

In 2020, eight top aides told the FBI they were concerned Paxton was misusing his office to help Paul over the developer’s unproven claims that an elaborate conspiracy to steal $200 million of his properties was afoot.

The FBI searched Paul’s home in 2019, but he has not been charged and denies wrongdoing. Paxton also told staff members he had an affair with a woman who, it later emerged, worked for Paul.

The impeachment accuses Paxton of attempting to interfere in foreclosure lawsuits and issuing legal opinions to benefit Paul. Its bribery charges allege that Paul employed the woman with whom Paxton had an affair in exchange for legal help and that he paid for expensive renovations to the attorney general’s home.

A senior lawyer for Paxton’s office, Chris Hilton, said Friday that the attorney general paid for all repairs and renovations.

Other charges, including lying to investigators, date back to Paxton’s still-pending securities fraud indictment.

Four of the aides who reported Paxton to the FBI later sued under Texas’ whistleblower law, and in February he agreed to settle the case for $3.3 million. The House committee said it was Paxton seeking legislative approval for the payout that sparked their probe.

“But for Paxton’s own request for a taxpayer-funded settlement over his wrongful conduct, Paxton would not be facing impeachment,” the panel said.

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May 27, 2023
US seeks dismissal of corruption charges against Florida 2018 Democratic governor nominee Gillum

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Federal prosecutors have asked a judge to dismiss remaining corruption charges against Andrew Gillum, the Democratic nominee for Florida governor in 2018

ByCURT ANDERSON Associated Press

Federal prosecutors asked a judge Monday to dismiss the remaining corruption charges against Andrew Gillum, the Democratic nominee for Florida governor in 2018, after a jury deadlocked on all but one count following a trial earlier this month.

Prosecutors had said they intended to retry Gillum after the trial concluded on May 4, but reversed course in a one-paragraph motion that also seeks dismissal of the case against his co-defendant, Sharon Lettman-Hicks.

Jurors acquitted Gillum of lying to the FBI but could not reach a verdict on more than a dozen fraud and conspiracy charges contending Gillum and Lettman-Hicks diverted tens of thousands of dollars in campaign contributions for his personal use.

Gillum’s defense team, led by Miami attorney David O. Markus, said in an email that he can now “resume his life and public service.”

“Andrew Gillum had the courage to stand up and say ‘I am innocent.’ And that is finally being recognized. We want to thank the hard working jury who did their job and explained to the government why it should drop the case,” the statement said.

U.S. District Judge Allen Winsor, who presided over the trial, did not immediately rule Monday on the motion but generally judges give deference to prosecutorial discretion. There was no comment from the U.S. attorney’s office beyond the court filing.

Gillum, 43, is a former Tallahassee mayor who sought to become the first Black governor in Florida history when he ran in 2018. He lost to Republican Ron DeSantis by less than 34,000 votes, which triggered an automatic recount.

Prosecutors had claimed Gillum committed fraud because he was struggling financially after quitting his $120,000-a-year job with the progressive People for the American Way group when he decided to run for governor. Lettman-Hicks, a longtime political adviser to Gillum and former executive with the group, was accused of conspiring with Gillum to divert the contributions to his personal accounts. Jurors also deadlocked on those counts.

The jury found Gillum not guilty of charges that he lied about his interactions with undercover FBI agents posing as developers who paid for a 2016 trip he and his brother took to New York, which included a ticket to the hit Broadway show “Hamilton.” Gillum contended his brother provided the ticket.

Gillum’s attorneys had argued that the indictment was politically motivated, but Winsor refused last year to dismiss the case, ruling that Gillum and Lettman-Hicks had to be tried together because their actions were so closely intertwined.

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May 15, 2023
Lobbyist pleads guilty to conspiracy in scheme to bribe Michigan marijuana board chair

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A fourth person has pleaded guilty in a scheme to bribe the head of a Michigan marijuana licensing board

GRAND RAPIDS, Mich. — A fourth person pleaded guilty Friday in an investigation of bribery at the now-defunct Michigan marijuana licensing board.

A lobbyist, Brian Pierce, said he conspired to give $42,000 and other benefits to Rick Johnson to help clients with marijuana license applications before the board was disbanded in 2019.

Johnson pleaded guilty in April, admitting that he accepted at least $110,000 in exchange for approving applications. A businessman and another lobbyist have also pleaded guilty in the FBI investigation.

Johnson, a former Republican state lawmaker, served as speaker of the House from 2001 through 2004.

Gov. Gretchen Whitmer abolished the medical marijuana board a few months after taking office in 2019 and put oversight inside a state agency.

Michigan voters legalized marijuana for medical purposes in 2008. Voters approved the recreational use of marijuana in 2018.

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May 12, 2023
Lobbyist pleads guilty in Michigan marijuana bribery probe

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A lobbyist has pleaded guilty to conspiring to pass bribes to the head of a Michigan marijuana licensing board

GRAND RAPIDS, Mich. — A lobbyist pleaded guilty Friday to conspiring to pass bribes to the head of a Michigan marijuana licensing board, the third conviction since charges were announced just a few weeks ago.

Vincent Brown acknowledged that he had a role in getting $42,000 and other benefits to Rick Johnson before the board was disbanded in 2019.

Brown’s goal was to drum up business for his lobbying firm by promoting his access to Johnson. The board reviewed and approved applications to grow and sell marijuana for medical purposes.

Johnson pleaded guilty to bribery Tuesday, admitting he accepted at least $110,000 in exchange for approving applications for lucrative licenses. Years ago he was a powerful state lawmaker, serving as speaker of the Republican-controlled House from 2001 through 2004.

A Detroit-area businessman, John Dalaly, pleaded guilty last week. He said he provided at least $68,200 in cash and other benefits to Johnson.

Another lobbyist, Brian Pierce, is scheduled to plead guilty May 5.

Gov. Gretchen Whitmer abolished the medical marijuana board a few months after taking office in 2019 and put oversight inside a state agency.

Michigan voters legalized marijuana for medical purposes in 2008. Voters approved the recreational use of marijuana in 2018.

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April 28, 2023
Ex-head of Michigan marijuana panel pleads guilty to bribery

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The former head of a Michigan marijuana licensing board has pleaded guilty to bribery

ByJOEY CAPPELLETTI and ED WHITE Associated Press

GRAND RAPIDS, Mich. — The former head of a Michigan marijuana licensing board pleaded guilty to bribery Tuesday, acknowledging he accepted at least $110,000 in exchange for approving applications for the lucrative business.

Rick Johnson’s appearance in federal court in Grand Rapids was a remarkable fall. Years ago he was a powerful state lawmaker, serving as speaker of the Republican-controlled House from 2001 through 2004.

The investigation so far has centered on corruption at the marijuana board before it was disbanded in 2019. The board reviewed and approved applications to grow and sell marijuana for medical purposes.

A Detroit-area businessman, John Dalaly, pleaded guilty last week. He said he provided at least $68,200 in cash and other benefits to Johnson, including two private flights to Canada.

Johnson, 70, answered a series of questions from the judge during the hourlong hearing but wasn’t asked to explain his motive for taking bribes. Johnson and defense lawyer Nick Dondzila declined to comment outside court.

Two lobbyists, Brian Pierce and Vincent Brown, have agreed to plead guilty to conspiring to pass bribes to Johnson. All four men are cooperating with the FBI, which could help them at sentencing.

Johnson’s plea agreement states that he must provide investigators with information about “any and all criminal activity of which he is aware” and testify in court or to a grand jury if necessary. That provision isn’t limited to his work on the marijuana board.

“We may or may not bring future charges in this case,” U.S. Attorney Mark Totten told reporters. “What I can say is that the investigation and prosecution of public corruption is a priority for our office. We will follow it wherever we find it.”

Prosecutors agreed not to bring charges against Johnson’s wife, Janice. Dalaly said Rick Johnson told him to hire her to work on license applications.

Gov. Gretchen Whitmer abolished the medical marijuana board a few months after taking office in 2019 and put oversight inside a state agency.

Michigan voters legalized marijuana for medical purposes in 2008. Voters approved the recreational use of marijuana in 2018.

___

White reported from Detroit.

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April 25, 2023
Longtime LA politician guilty on federal corruption charges

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LOS ANGELES — A longtime Los Angeles politician was convicted Thursday on federal corruption charges in a scheme in which prosecutors said he promised to help steer a multimillion-dollar government contract to the University of Southern California if his son got a scholarship and a teaching job.

Former Democratic City Councilman Mark Ridley-Thomas — a one-time legislator, county supervisor and a fixture in local politics for decades — was found guilty in U.S. District Court of seven felonies, including conspiracy, bribery and fraud.

The jury’s verdict marked a stunning fall for a once-commanding figure in Los Angeles County politics known for his involvement in civil rights and racial issues.

Marilyn Flynn, who was dean of USC’s School of Social Work from 1997 to 2018, pleaded guilty last year to one count of bribery in the case. Prosecutors said that as part of the plot, she concocted a scheme to funnel $100,000 that Ridley-Thomas provided from campaign funds through the university to a nonprofit run by his son.

“When elected leaders engage in acts of corruption, our community suffers immense damage. Ridley-Thomas engaged in a corrupt conspiracy with a university dean to steer taxpayer-funded contracts to the school in exchange for benefits for his son,” U.S. Attorney Martin Estrada said in a statement.

Ridley-Thomas, then a county supervisor, offered to support county contracts for USC’s School of Social Work that could potentially bring the institution millions of dollars in new revenue in return for helping his son, Sebastian Ridley-Thomas, according to prosecutors. At the time, the school had a multimillion-dollar budget deficit.

Sebastian Ridley-Thomas was a state assemblyman who resigned the last day of 2017 while facing allegations that he made an unwanted sexual advance toward a Capitol staffer. The $100,000 went to his organization, known as the Policy, Research & Practice Initiative, prosecutors said.

The son later received a $26,000 graduate scholarship for 2018 and was offered a paid teaching position with a $50,000 salary, even though being a student and a teacher would violate school policy, authorities said.

The Los Angeles City Council suspended Mark Ridley-Thomas in October 2021, shortly after he was charged in the case. With his conviction on felony charges, Council President Paul Krekorian said in a statement the seat was vacant under city law.

Krekorian said he was appointing Councilwoman Heather Hutt as a caretaker of the seat, who earlier had been named to temporarily fill the post after Ridely-Thomas was suspended. Krekorian said he would urge the council at its next meting to appoint Hutt to hold the office for the remainder of Ridley-Thomas’ term.

Ridley-Thomas, who denied wrongdoing, left the courthouse after the verdict without speaking to reporters. A representative for his defense team told the Los Angeles Times that he would appeal.

He will be sentenced in August.

Los Angeles Mayor Karen Bass, a longtime friend and political ally, called the verdict a “sad day for Los Angeles.”

USC wasn’t accused of wrongdoing in the criminal case but it further tarnished the school’s elite image, already battered by a series of scandals.

USC was one of the universities embroiled in an admissions cheating scandal in which wealthy parents sought to get their undeserving offspring into college by falsely portraying them as star athletes. Dozens of parents and athletic coaches nationwide were charged and more than 50 people were convicted in the “Operation Varsity Blues” case. They include TV actresses Felicity Huffman and Lori Loughlin, and Loughlin’s fashion designer husband Mossimo Giannulli.

In 2021, USC agreed to an $852 million settlement with more than 700 women who accused the college’s longtime campus gynecologist of sexual abuse. It was believed to be a record amount for such a lawsuit. When combined with an earlier settlement of a separate class-action suit, USC has agreed to pay out more than $1 billion for claims against the doctor, who worked at the school for nearly three decades.

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March 30, 2023
Donald Trump indicted in Stormy Daniels case — first former U.S. president to ever be criminally charged

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The Teflon Don is facing his biggest test.

After years of investigations and probes into Donald Trump for a wide variety of alleged crimes, a Manhattan grand jury voted Thursday to indict him, marking the first time in U.S. history a former president will face criminal charges.

The indictment has yet to be unsealed so the specifics of the charges weren’t immediately clear, but the Manhattan district attorney has alleged that Trump had broken the law for his role in a hush-money payment to porn star Stormy Daniels at the height of the 2016 presidential election to silence her story claiming they once had an affair. Despite years of various investigations, Trump had so far avoided prosecution.

The New York Times was first to report the indictment, which was confirmed by Trump’s lawyers, Joe Tacopina and Susan Necheles, late Thursday. “President Trump has been indicted,” they said in a statement. “He did not commit any crime. We will vigorously fight this this political prosecution in court.”

In his own statement, Trump called the indictment “political persecution and election interference at the highest level,” and accused Democrats of “cheating” and “weaponizing our justice system.”

In an emailed statement Thursday, a spokesperson for Manhattan District Attorney Alvin Braggs said arrangements are being made for Trump’s surrender: “This evening we contacted Mr. Trump’s attorney to coordinate his surrender to the Manhattan D.A.’s Office for arraignment on a Supreme Court indictment, which remains under seal. Guidance will be provided when the arraignment date is selected.”

There were news reports that Trump would turn himself in next week, and in an email to MarketWatch, Necheles said Trump’s arraignment is expected to be Tuesday.

Also see: Donald Trump has been indicted. Could he still run for president?

The hush-money charges mark an extraordinary turn of events for Trump, who has been under investigation for election interference in Georgia and the storage of classified documents at his Florida mansion, as he seeks to make a political comeback with a run for the White House in 2024.

Daniels, whose real name is Stephanie Clifford, was paid $130,000 by Trump’s then-personal lawyer, Michael Cohen, after she had approached the National Enquirer offering to sell her kiss-and-tell story about having sex with Trump at a celebrity golf tournament in 2006.

Clifford then signed a non-disclosure agreement and the National Enquirer never published the story — a tabloid journalism practice known as “catch and kill.”

Cohen initially made the payment using money he took from a home equity loan on his house, and funneled it to Clifford through a shell company he created in Delaware. Cohen, who pleaded guilty in 2018 in federal court to campaign finance violations for his role in the payoff, said he was directed to make the payment by Trump who later reimbursed him.

That payment was recorded by Trump’s company as being for legal services. Federal prosecutors had argued that the payments amounted to illegal, unreported assistance to Trump’s campaign.

Trump was never charged in the federal probe but was listed in court documents as “co-conspirator number one.”

The former president has denied having an affair with Clifford and has characterized her selling the story as extortion.

Cohen had also been involved in orchestrating an earlier “catch-and-kill” payment in 2016 to former Playboy bunny Karen McDougal, who was given $150,000 for her story of having an affair with Trump by the National Enquirer, which then never ran an article.

The editor and publisher of the National Enquirer were given non-prosecution agreements in exchange for their cooperation with the federal investigation.

Trump has been facing an FBI investigation into his keeping boxes of highly classified documents after he left the White House following his defeat by President Joe Biden in 2020. He also has been subject to a grand jury probe into his alleged tampering with the election process in Georgia.

His real estate company, the Trump Organization, has been the subject of a lawsuit by the New York Attorney General’s office for allegedly falsifying business and tax records. The Manhattan district attorney had similarly looked into Trump’s business practices but has so far declined to press charges.

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March 30, 2023
Trump grand jury reportedly taking break for most of April

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The Manhattan grand jury probing former President Donald Trump’s alleged role in a hush money payment to a porn star is scheduled to break for about a month, reports said Wednesday.

Politico said the break is largely due to a previously scheduled hiatus, citing a person familiar with the proceedings.

CNN reported that the grand jury is scheduled…

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March 29, 2023
FTX founder Sam Bankman-Fried charged with bribing Chinese government officials: court document

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Sam Bankman-Fried, the founder and former chief executive of bankrupt crypto exchange FTX, is facing new charges for bribery, according to an indictment on March 28.

It claims Bankman-Fried in 2021 transferred over $40 million worth of cryptocurrency to Chinese government officials. The founder allegedly made the transfer to “influence and induce them to unfreeze the accounts” of Alameda Research, which contained over $1 billion in cryptocurrency that Beijing had frozen, according to the document.

The indictment contains 12 charges that Bankman-Fried previously was facing, plus the additional one for conspiracy to violate the Foreign Corrupt Practices Act, bringing the new tally to a 13-count indictment.

Bankman-Fried’s lawyer didn’t immediately respond to a MarketWatch request for comment.

Bankman-Fried has been restricted from using messaging apps, but prosecutors and Bankman-Fried’s attorneys have asked U.S. District Judge Lewis Kaplan to approve a new set of proposed restrictions that would limit his access to electronic devices and the internet.

He has pleaded not guilty to eight counts over the collapse of FTX and is currently under house arrest with his parents in Palo Alto, Calif.

U.S. District Judge Lewis Kaplan set a new hearing for Thursday.

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March 28, 2023
Former Ohio House speaker convicted in $60 million bribery scheme | CNN Politics

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CNN
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A former Republican speaker of Ohio’s House of Representatives was convicted by a federal jury Thursday on racketeering conspiracy charges in connection with a $60 million bribery scheme.

Former Speaker Larry Householder and former Ohio Republican Party Chair Mathew Borges, who was also convicted Thursday, could face up to 20 years in prison for orchestrating the scheme to accept bribes in exchange for ensuring the passage of a billion-dollar bailout for a nuclear energy company.

“As presented by the trial team, Larry Householder illegally sold the statehouse, and thus he ultimately betrayed the great people of Ohio he was elected to serve,” said US Attorney Kenneth Parker.

Steven Bradley, an attorney for Householder, expressed disappointment with the verdict.

“We will take some time to discuss and evaluate our legal options moving forward and will most certainly pursue an appeal,” he said. “Larry is looking forward to going home and spending time with his family after what has been an exhausting seven week trial.”

CNN reached out to an attorney for Borges for comment.

The release did not explicitly identify the nuclear energy company involved in the scheme but noted that utility company FirstEnergy Corp. previously agreed to pay a $230 million penalty for “conspiring to bribe public officials and others” as part of a deferred prosecution settlement.

Jennifer Young, a manager for external communications at FirstEnergy Corp., told CNN that “while it would be inappropriate to comment on the verdict, FirstEnergy has taken decisive actions over the past several years to strengthen our leadership team and ensure a culture of strong ethics, integrity and accountability across the company.”

Jeffrey Longstreth, Householder’s longtime campaign and political strategist, and Juan Cespedes, a lobbyist, previously pleaded guilty to their roles in the racketeering conspiracy.

Beginning in March 2017, FirstEnergy began making quarterly $250,000 payments to Householder’s tax-exempt social welfare account named Generation Now, US attorneys in Ohio’s southern district laid out in their case.

Householder’s team then used that money to support the passage of House Bill 6, a $1 billion bailout that saved two nuclear power plants operated by FirstEnergy Corp., and stop a ballot effort to overturn the law.

Millions of those dollars went to Householder’s bid for speaker, to other state House candidates likely to support him and to his team’s own pockets.

Householder spent over $500,000 of those funds to “pay off his credit card balances, repair his Florida home and settle a business lawsuit,” according to prosecutors.

Borges used about $366,000 for his own benefit and used another $15,000 to bribe an Ohio Republican operative for information on the number of signatures collected on the ballot referendum opposing HB 6, the news release said.

Householder and his associates were arrested and charged with racketeering conspiracy in July 2020.

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March 10, 2023
Former Ohio House speaker convicted in $60M bribery scheme

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COLUMBUS, Ohio — Former state House Speaker Larry Householder and former Ohio Republican Party Chair Matt Borges were convicted Thursday in a $60 million bribery scheme that federal prosecutors have called the largest corruption case in state history.

A jury in Cincinnati found the two guilty of conspiracy to participate in a racketeering enterprise involving bribery and money laundering, after about 9 1/2 half hours of deliberations over two days.

U.S. Attorney Kenneth Parker said the government’s prosecution team showed that “Householder sold the Statehouse, and thus he ultimately betrayed the people of the great state of Ohio he was elected to serve.” He called Borges “a willing co-conspirator.”

“Through its verdict today, the jury reaffirmed that the illegal acts committed by both men will not be tolerated and that they should be held accountable,” Parker said.

Attorneys for Householder and Borges did not immediately respond to messages left by The Associated Press on Thursday.

Prosecutors alleged that Householder orchestrated a scheme secretly funded by Akron-based FirstEnergy Corp. to secure his power in the Legislature, elect his allies — and then to pass and defend a $1 billion nuclear power plant bailout benefiting the electric utility. They alleged that Borges, then a lobbyist, sought to bribe an operative for inside information on the referendum to overturn the bailout.

Householder, 63, had been one of Ohio’s most powerful politicians — and twice elected speaker — until the Republican-controlled House ousted him after his indictment from his leadership post, and then in a bipartisan vote, and with Householder vigorously objecting, from the chamber. It was the first such expulsion in 150 years.

He took the stand in his own defense, contradicting FBI testimony and denying that he attended swanky Washington dinners where prosecutors allege he and executives of FirstEnergy hatched the elaborate scheme in 2017.

Borges, 50, did not testify at trial but has insisted that he’s innocent. Both men face up to 20 years in prison.

The verdict comes two-and-a-half years after Householder, Borges and three others were arrested in what prosecutors have called the largest corruption case in Ohio history.

Over the past seven weeks, jurors at the trial were presented with firsthand accounts of the alleged scheme, as well as reams of financial documents, emails, texts and wire-tap audio.

The prosecution called two of the people arrested — Juan Cespedes and Jeff Longstreth, who pleaded guilty — to testify about political contributions that they said are not ordinary, but bribes intended to secure passage of the bailout bill, known as House Bill 6.

Householder’s attorneys described his activities as nothing more than hardball politics.

Jurors also heard taped phone calls in which Householder and another co-defendant, the late Statehouse superlobbyist Neil Clark, plotted a nasty attack ad — and, in expletive-laced fashion, contemplated revenge against lawmakers who had crossed Householder.

Householder testified that he never retaliated against those who voted counter to his wishes or who donated to his rivals.

Under a deal to avoid prosecution, FirstEnergy admitted using a network of dark money groups to fund the scheme and even bribing the state’s top utility regulator, Sam Randazzo.

Randazzo resigned as chair of the Public Utilities Commission of Ohio after an FBI search of his home, but he has not been charged and denies wrongdoing.

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March 9, 2023
Closing statements Tuesday in Householder corruption trial

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Closing statements are set before a jury Tuesday in the trial of ex-Ohio House Speaker Larry Householder and lobbyist Matt Borges

ByJULIE CARR SMYTH Associated Press

COLUMBUS, Ohio — Closing statements are set before a jury Tuesday in the trial of ex-Ohio House Speaker Larry Householder and lobbyist Matt Borges, where both Republicans are accused of participating in a $60 million bribery scheme that federal prosecutors call the largest corruption case in state history.

The government alleges Householder orchestrated a scheme funded by Akron-based FirstEnergy Corp. to secure the speakership, elect legislative allies, then pass and defend a $1 billion nuclear power plant bailout benefiting the electric utility. Borges is accused of seeking to bribe an operative working to overturn the bailout law.

Both are charged with conspiracy to participate in a racketeering enterprise involving bribery and money laundering, which carries a punishment of up to 20 years in prison. Both pleaded not guilty and maintain their innocence.

The six-week trial came 2 1/2 years after Householder, Borges and three others were arrested in the case.

Prosecutors called an FBI agent to the stand who walked jurors through the highlights of thousands of pages of subpoenaed records, then played them secretly taped conversations and questioned firsthand participants in key events surrounding the alleged scheme.

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March 7, 2023
Ericsson to pay $206M for breaking US deal in bribery case

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STOCKHOLM — Swedish telecom equipment maker Ericsson has agreed to plead guilty to U.S. foreign corruption violations and pay more than $206 million for breaking a deal with the Justice Department over charges of bribery and falsifying records in countries from China to Kuwait.

The U.S. Justice Department said the company, based in Stockholm, violated a 2019 agreement by failing to provide documents and information the agency needed for its investigation and to bring charges against individuals accused of misconduct.

Ericsson, which provides equipment for high-speed 5G wireless networks, used intermediaries to bribe government officials and manage illicit stashes of cash in Djibouti, China, Vietnam, Indonesia and Kuwait, prosecutors say.

“The company’s breach of its obligations … indicate that Ericsson did not learn its lesson, and it is now facing a steep price for its continued missteps,” U.S. Attorney Damian Williams for the Southern District of New York said in a prepared statement Thursday.

Ericsson was accused of drawing up fake contracts and invoices to pay third-party agents carrying out the bribes and then not properly accounting for the payments from 2000 to 2016.

CEO Börje Ekholm says Ericsson has made important changes and is committed to enforcing strict controls and improved oversight and ethics.

“This resolution is a stark reminder of the historical misconduct” that led to the deal with the Justice Department, Ekholm said in a prepared statement. “We have learned from that, and we are on an important journey to transform our culture. To be a true industry leader, we must be a market and technology leader while also being a leader in how we conduct our business.”

Facing a criminal indictment in New York over violations of the Foreign Corrupt Practices Act, Ericsson in 2019 paid a $520 million penalty and agreed to have an independent compliance monitor for three years.

Now, the Justice Department says the company has failed to “truthfully disclose” all information and evidence in the Djibouti and China cases and in other potential bribery or accounting violations. Ericsson also failed to turn over details in a 2019 Iraq internal investigation that has raised allegations of illegal business behavior, the agency said.

As a result, Ericsson agreed to plead guilty to the charges put off by the 2019 deal: conspiracy to violate the foreign corruption law’s anti-bribery and bookkeeping provisions.

Ericsson will pay $206.7 million, serve probation through June 2024 and keep the independent compliance monitor for another year.

It’s the latest hit for the company, which said last week that it’s cutting 8% of its global workforce as it looks to reduce costs.

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March 3, 2023
Jailed Malaysia ex-PM Najib acquitted in latest 1MDB trial

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Malaysian former Prime Minister Najib Razak has been acquitted in the latest trial in response to the multibillion-dollar looting of the 1Malaysia Development Berhad state fund

KUALA LUMPUR, Malaysia — Malaysian former Prime Minister Najib Razak was acquitted Friday in the latest trial in response to the multibillion-dollar looting of the 1Malaysia Development Berhad state fund.

Najib, who is serving a 12-year prison term after losing the final appeal in his first of several corruption trials linked to the 1MDB scandal, was found not guilty on the charge of tampering with an audit report to cover up wrongdoings.

Defense lawyer Mohamad Shafee Abdullah said the High Court ruled that prosecutors did not have sufficient evidence to prove Najib guilty of abusing his position as Prime Minister and Finance Minister to order amendments to the 1MDB audit report in 2016 before it was presented to Parliament.

“My client is very grateful to Allah for the decision today because it really uplifted his spirit and the desire to fight for his innocence,” Shafee said Friday at a news conference.

The 1MDB development fund was set up months after Najib became prime minister in 2009. Investigators allege more than $4.5 billion was stolen from the fund and laundered by Najib’s associates through layers of bank accounts in the United States and other countries to finance Hollywood films and extravagant purchases that included hotels, a luxury yacht, art and jewelry. More than $700 million landed in Najib’s bank accounts.

He and his wife, Rosmah Mansor, were hit with multiple graft charges after the saga led to his ruling coalition’s shocking defeat in 2018 general elections. Rosmah was sentenced in 2022 to 10 years in prison and a record fine of 970 million ringgit ($217 million) for corruption over a solar energy project and is out on bail pending an appeal.

Shafee said financer Low Taek Jho — believed to be the mastermind of the scandal — remained at large.

Former 1MDB CEO Arul Kanda Kandasamy, who was jointly charged with abetting Najib and appeared as a prosecution witness during the trial, was also acquitted by the court Friday.

Shafee has maintained that charges against Najib were politically motivated. Najib is seeking a review of the top court’s decision in August to reject his final appeal and is hoping for a favorable outcome later this month, he added.

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March 2, 2023
Genaro García Luna, former Mexican public security secretary, convicted in US of taking bribes from drug cartels | CNN

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New York
CNN
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Genaro García Luna, Mexico’s former public security secretary and architect of its deadly and protracted war on drugs, was found guilty in federal court in New York on Tuesday of taking bribes from the drug cartels he had sworn to combat, the US Attorney’s Office said.

The former Secretary of Public Security in Mexico, who served from 2006 to 2012, was convicted by a federal jury in Brooklyn on five counts of engaging in a continuing criminal enterprise, including international cocaine distribution conspiracy, conspiracy to distribute and possess with intent to distribute cocaine, conspiracy to import cocaine and making false statements, according to the US Attorney’s Office for the Eastern District of New York.

He is the highest-ranking current or former Mexican official ever tried in the United States.

His trial before US District Judge Brian M. Cogan, who also oversaw the trial of former Sinaloa Cartel boss Joaquin “El Chapo” Guzman, lasted four weeks. The Court of the Eastern District of New York jury announced the verdict after 15 days of hearings and having heard the testimony of 27 witnesses.

García Luna, 54, pleaded not guilty to all charges and can appeal the ruling.

He will be sentenced June 27. He faces a mandatory minimum sentence of 20 years’ in prison and a maximum of life behind bars.

“Garcia Luna, who once stood at the pinnacle of law enforcement in Mexico, will now live the rest of his days having been revealed as a traitor to his country and to the honest members of law enforcement who risked their lives to dismantle drug cartels,” Breon Peace, US Attorney for the Eastern District of New York said in a statement.

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February 21, 2023
Ohio ex-speaker ill, corruption trial pauses after big week

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CINCINNATI — The racketeering trial of former Ohio House Speaker Larry Householder and lobbyist Matt Borges was cancelled due to illness again Friday, giving jurors a long holiday weekend to mull striking new details revealed this week by players directly involved in an alleged $60 million bribery scheme.

It marked the third time since the largest corruption trial in state history began Jan. 23 that U.S. District Judge Timothy Black in Cincinnati has postponed proceedings. Two previous pauses involved jurors testing positive for COVID-19; on Friday, Householder himself was sick, though apparently not with the coronavirus.

Testimony is scheduled to resume Tuesday, after the Presidents Day holiday. Before being slowed by illnesses, the trial was expected to last about six weeks.

The jury must decide whether Householder, 63, and Borges, 50, are guilty of conspiracy to participate in a racketeering enterprise involving bribery and money laundering. Both have pleaded not guilty and maintain innocence. Each faces up to 20 years in prison if convicted.

An indictment alleges Householder, Borges, three other people and a dark money group called Generation Now orchestrated an elaborate scheme, secretly funded by Akron-based FirstEnergy Corp., to secure Householder’s power, elect his allies, pass legislation containing a $1 billion bailout for two aging nuclear power plants, and then vex a ballot effort to overturn the bill with a dirty tricks campaign. The arrests happened in July 2020.

Juan Cespedes, a former lobbyist who has pleaded guilty in the case, provided the most gripping testimony of the week, if not the entire trial.

It amounted to the first time Cespedes had spoken publicly since the arrests. Jeff Longstreth, a longtime Householder associate who was also arrested and charged, has pleaded guilty and is expected to testify soon. The third man arrested along with Householder and Borges, long-powerful Statehouse lobbyist Neil Clark, pleaded not guilty before dying by suicide in March 2021.

“I’m here to tell the truth and be accountable for it,” Cespedes said as his testimony began.

He said he worked for FirstEnergy Solutions and coordinated tens of millions in donations steered to Generation Now, which he described as controlled by Householder and Longstreth.

Cespedes testified Monday to directing a client to give Householder, through Generation Now, a $500,000 campaign contribution in exchange for legislation bailing out two aging nuclear plants owned by his company, which the Ohio House would eventually pass under Householder’s watch.

He said that at an Oct. 10, 2018, meeting, another Columbus lobbyist, Robert Klaffky, slid a $400,000 check across to Householder while emphasizing the importance of the legislation.

“Our client cares very much about this issue,” Klaffky said.

Householder looked into the envelope containing the check, made out from FirstEnergy to Generation Now, and said, “Well yes, they do.” Klaffky told cleveland.com he does not recall saying those things.

The remaining $100,000 was given to Longstreth to give to Householder, Cespedes said.

Householder’s lawyers argued during opening statements that he was not part of any criminal conspiracy but was engaging in politics as usual.

Cespedes described the contribution as a clear pay-to-play scheme.

“We were trying to establish the fact that our support was specifically tied to the legislation,” Cespedes said.

Generation Now has pleaded guilty to its role in the scheme. In a deal to avoid prosecution, Akron-based FirstEnergy Corp. has admitted to using dark money groups to fund the bribery scheme and agreed to pay $230 million and other conditions.

Cespedes testified Tuesday that he and Borges paid $15,000 off the books in 2019 to referendum operative Tyler Fehrman to try to get inside information on a campaign to repeal the nuclear bailout bill, known as House Bill 6.

The alleged $15,000 bribe is key to the government’s case against Borges, a former chair of the Ohio Republican Party. His attorneys describe the payment as a loan to help a friend.

Cespedes testified that it was for a spying effort on behalf of FirstEnergy Solutions, a then-subsidiary of FirstEnergy. He said he tried to keep the firm’s executive chair, John Kiani, in the dark because he believed Kiani would apply pressure to go through with the bribe. After Kiani learned of the plan, that came to pass, Cespedes said.

“(W)hat happened to the black ops,” Kiani asked in an Aug. 31, 2019, text, a reference Cespedes testified was to the plan to get inside information. On Sept. 2, 2019, Cespedes said he told Borges that Kiani “reiterated to do whatever it takes to get this information.”

Cespedes testified that Kiani had plans to operate the two Ohio nuclear plants for a short period, get a government bailout, then sell them in a deal that could have netted him $100 million. On cross-examination, Borges’ attorneys got Cespedes to concede that he, too, could have gotten rich off the planned sale.

Jurors also heard hours of tapes this week of the voice of the late Clark, which were gathered by two undercover FBI agents posing as developers who had hired him as their lobbyist.

Clark took the pair to a dinner at the Aubergine Private Dining Club in suburban Columbus on Sept. 23, 2019, to meet Householder — and advised them to bring a $50,000 check made out to Generation Now. Republican state Rep. Jay Edwards, of Athens County in southeastern Ohio, and a House staffer also attended.

In the recordings, Clark described himself as Householder’s “proxy” and told the agents that, for getting attention, “a noticeable number is $15,000, $20,000 or $25,000.” He said “it goes into a (c)(4),” referring to Generation Now by the IRS code section — 501(c)(4) — that sets the rules for a category of tax-exempt organizations that can raise and spend unlimited amounts without disclosing their donors.

“It’s the speaker’s (c)(4). That’s how it works,” he told them.

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This story was first published on February 17, 2023. It was updated on February 19, 2023 to correct how witness Juan Cespedes reiterated an executive’s desire “to do whatever it takes to get this information” on a referendum effort to defendant Matt Borges. Cespedes testified that he told Borges verbally; it was not contained in a text message.

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February 19, 2023
Texas Attorney General Paxton agrees to $3.3 million settlement with whistleblowers who accused him of abuse of office and bribery | CNN Politics

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CNN
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Texas Attorney General Ken Paxton has agreed to a $3.3 million settlement and an apology as part of a tentative settlement with four whistleblowers who publicly accused Paxton of abuse of office, bribery and other criminal offenses in 2020.

The former high-level aides – who also reported their allegations to the FBI – were fired within a month of their denouncement of Paxton, a Republican. They filed a lawsuit seeking reinstatement to their former positions or equivalent positions, as well as reinstatement of lost fringe benefits and seniority rights.

In a filing on Friday, both parties asked the Texas Supreme Court to defer consideration on the case to allow the parties to finalize and fund a settlement agreement.

The filing included the mediated agreement which says that Paxton’s office will pay $3.3 million and that the final settlement will say Paxton accepts that the former aides were acting in a manner they thought was right and apologizes for referring to them as “rogue employees.”

Paxton also agreed to remove the 2020 press release from his office’s website in which he described his aides as “rogue.” The press release has already been removed, and the filing says the settlement is contingent on all necessary approvals for funding.

Despite the apology, the formal settlement agreement does not contain an admission of liability or fault by any party.

In a statement on Friday, Paxton acknowledged the settlement, explaining why he agreed to “put this issue to rest” but did not mention the apology portion of the agreement.

“After over two years of litigating with four ex-staffers who accused me in October 2020 of ‘potential’ wrongdoing, I have reached a settlement agreement to put this issue to rest. I have chosen this path to save taxpayer dollars and ensure my third term as Attorney General is unburdened by unnecessary distractions. This settlement achieves these goals. I look forward to serving the People of Texas for the next four years free from this unfortunate sideshow.”

Lawyers for three of the plaintiffs also issued a statement to CNN, saying: “Our clients have spent more than two years fighting for what is right. We believe the terms of the settlement speak for themselves.”

Former Texas deputy attorneys general James Blake Brickman, Mark Penley, and Ryan Vassar – along with former director of law enforcement David Maxwell – were the plaintiffs in the lawsuit.

CNN has previously reported that Paxton is facing an FBI investigation for abuse of office. He is also under indictment for securities fraud in a separate, unrelated case. Paxton has denied all charges and allegations.

The former senior staff members largely stayed out of the limelight after filing the suit, but they broke their silence early last year ahead of the GOP primary, when Paxton was seeking the Republican nomination to be reelected as attorney general. They issued a statement responding to public comments that Paxton had made about the lawsuit during his reelection campaign.

Paxton was reelected as attorney general in November.

This headline has been updated.

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February 10, 2023