Speaker Phelan aims to defend House coalition against outside PAC, political rivals

In a rare, lengthy sit-down interview, NBC 5 found Speaker of the House Dade Phelan willing to go on offense against what he sees as creeping corruption within the GOP and ready to defend his Republican-led but bipartisan coalition in the Texas House.

Beaumont area voters first sent Rep. Dade Phelan to Austin in 2015. The Texas House selected him to lead the chamber in 2021 and again this year, both times with near-unanimous votes. Per House tradition, he went on to appoint 9 Democrats as committee chairs out of the 39 total committees. As presiding officer of the Texas Senate, Lt. Governor Dan Patrick appointed one Democratic chair out of 17 committees.

A handful of insurgent Republicans have been a constant thorn for Phelan's governing team, trying to drag the body further to the right.

"They want the Texas House to look like what just happened in Washington D.C. They want crisis. They want chaos. That's where they thrive. They want a situation where five or six are deciding for the entire chamber, the entire body for all thirty million Texans. I'm not going to allow it to happen," said Phelan.

The House insurgents are supported and politically financed by Defend Texas Liberty PAC, led by one of the former anti-Speaker insurgents, Jonathan Stickland.

Defend Texas Liberty is largely financed by West Texas energy billionaires Tim Dunn and brothers Dan and Farris Wilks, who want the House leadership to share their ultra-conservative Christian worldview.

The group is a major funder to Phelan's top two political opponents: Lt. Governor Dan Patrick and Attorney General Ken Paxton. NBC 5 has interviewed the group's leaders several times on different issues.

"The Senate has been historically more conservative and less open to giving Democrats wins, and they actually accept the facts and make more decisions unlike what their counterparts do in the Texas House of Representatives," Luke Macias, Defend Texas Liberty PAC director, told us during the impeachment trial of Attorney General Paxton.

While the last two speakers - Rep. Joe Straus and Rep. Dennis Bonnen - either tried to sideline or negotiate with the House insurgents, Speaker Phelan went on offense against what he calls "political rot... festering" within the GOP.

First this year, with a unanimous vote to remove Royse City Republican Bryan Slaton after an internal investigation found he got a 19-year-old staffer drunk and had sex with her.

Then, Phelan's House impeached and suspended Attorney General Ken Paxton, alleging bribery and abuse of power. Last month, Paxton was acquitted by the Texas Senate, whose members mostly argued the House's process was rushed and they didn't have enough evidence to remove Paxton. The FBI continues to investigate Paxton, who denies wrongdoing.

"You have a choice right now, just like with the impeachment: choose integrity, political courage, and we're going to turn our back to corruption and do the right thing. And now there's another line in the sand," said Speaker Phelan.

That "other line in the sand" came last Friday when the Texas Tribune reported Nick Fuentes, a well-known white supremacist who's called for a "holy war" against Jews, had a six-hour meeting in the office of Jonathan Stickland, president of Defend Texas Liberty PAC.

Speaker Phelan and almost sixty members of the House Republican caucus called for lawmakers to disavow the group and return the millions they've donated.

"I reject an individual who denies the holocaust and someone who supports the Aryan brotherhood. It should be easy for Republicans to do that and I have yet to see these individuals do that. And that's on them. That's not on me. I haven't taken a dime from these people and I never will," said Phelan.

Defend Texas Liberty PAC is Attorney General Ken Paxton's largest donor by far, and they vocally pressured state senators to acquit him because of his conservative efforts. Before the trial, the group gave Lt. Governor Dan Patrick as presiding judge a $1 million donation and a $2 million loan. Both Paxton and Patrick have now called on Phelan to resign, believing Phelan is taking advantage of the ongoing war between Israel and Hamas.

After the Paxton trial, Lt. Governor Patrick went off on Phelan's House after the attorney general was acquitted, believing their process was rushed and sloppy.

"I'm going to call next week for a full audit of all taxpayer money spent by the House from the beginning of their investigation in March to the final bills they get from their lawyers," said Patrick in a speech from the dais after the acquittal.

In response to that, Speaker Phelan told NBC 5 he believes the inner-party war comes from Lt. Governor Patrick, Defend Texas Liberty, and their allies, wanting to control the Texas House.

"I do think there are some folks out there who don't like the fact that we run the House a little bit differently. To your point about the Lt. Governor, yes, I think he wants to be more than just the Lt. Governor. I think he wants to be Speaker. It's not going to happen as long as I'm around," said Phelan.

NBC 5 tried all week to talk to the Defend Texas Liberty PAC leaders, including going to their Tarrant County office to get their side of the story. NBC 5 was told to leave. The staff there did not take a business card for a callback.

The group put out an online statement: "We reject Speaker Phelan's effort to combine Defend Texas Liberty PAC with Nick Fuentes. We oppose Mr. Fuentes' incendiary views."

Lt. Governor Patrick issued a statement Wednesday saying, "There is simply no place in Texas politics where the views of Nick Fuentes and his kind are acceptable or will be tolerated." Patrick wrote he spoke to major donor of Defend Texas Liberty PAC, Tim Dunn, and he called the meeting a "serious blunder," writing 'everyone at the PAC understands that mistakes were made and are being corrected."

As for the $3 million donation and loan the group gave him, Patrick wrote it was accepted "in good faith" and sees no reason to return the contribution.

As for the Speaker, Patrick said the whole thing was an orchestrated "smear campaign" by a "failed Speaker," adding, "he is desperate to deflect attention from his failure to pass conservative legislation that the people of Texas want."

Attorney General Ken Paxton has not issued a statement on the Defend Texas Liberty PAC meeting with Fuentes. In the past few years, he's recently received more than $900,000 in loans or donations from the group or its donors.

This week, some responded to Speaker Phelan's call, including Representative Jared Patterson, R - Frisco. He told NBC 5 he donated the $2,500 he's received from the group to a pro-Israel charity, saying he wants to wash his campaign from the "stain of this organization. He challenged his colleagues to do the same.

"We need to make it clear that as Republicans, we will not condone that type of behavior, we will not accept resources from anyone connected with Nick Fuentes or Nazis," said Rep. Patterson, "That's unacceptable in the Republican party."

Arlington Republican Representative Tony Tinderholt, who's received more than $120,000 from Defend Texas Liberty, has called on Speaker Phelan to resign, writing, "I will never tolerate racism or antisemitism by anyone, including Mr. Fuentes. I similarly refuse to allow Dade Phelan to exploit a tragedy of this magnitude."

Towards the end of the week, Speaker Phelan limited questions Tinderholt could bring to the floor, arguing he consistently breaks House rules. Tinderholt called Phelan "tyrannical."

According to the Dallas Morning News, Representative Nate Schatzline from Fort Worth has received almost $175,000 from Defend Texas Liberty.

"I have been very clear about my love and support for the nation of Israel, and I condemn all anti-Semitic beliefs," Schatzline wrote.

Midlothian Republican Brian Harrison also has received more than $10,000, according to the Texas Ethics Commission database. He has also called on Phelan.

"I’ve never accepted one penny from Mr. Fuentes, whom I denounce along with his abhorrent views, nor any organization he is affiliated with.  I stand with Israel, and was proudly a member of a White House delegation to Jerusalem to reaffirm our commitment to their security," said Rep. Harrison in a statement.

As of Friday, Tinderholt, Harrison, and Schatzline have not said whether they will return or donate the Defend Texas Liberty money.

One of the insurgents' gripes about Phelan's leadership team is that he appoints Democratic chairs of committees per House tradition. He told NBC 5 that he appoints the most qualified chairs over the committee's subject matter.

"That's what Texans want. They want us to function. They want us to deliver," Phelan said of his Republican-led but bipartisan coalition.

"What Republican priority has not passed because of a Dem chair," he asked, insisting he's pass major conservative legislation like a near ban on abortion and historic property tax relief.

In the past, leaders for the group argued they needed those mega-donations from Dunn and the Wilks brothers to offset the millions House leadership can fundraise. This does set up quite a showdown next March between Defend Texas Liberty PAC, the Paxton political organization, against Phelan's team and groups that normally back incumbent Republicans like Texans for Lawsuit Reform and the Associated Republicans of Texas.

We do not yet know if Lt. Governor Dan Patrick will spend money to oust Phelan and his allies. Historically he's stayed out of House campaigns.