A retired two-star general is taking Rep. Patrick Fallon (R-Texas) and his wife to court over potential claims that may include fraud, breach of fiduciary duties and interference with contractual relationships.
In 2008, retired General Timothy M. Haake and Fallon formed Recon Sportswear & Jackets LLC to sell apparel in the Fort Benning market. Later that year, according to Haake’s petition to the court, both men, Recon Sportswear and another firm called American Airborne Store entered into an agreement. Haake claims it promised him 10% interest in the two firms’ future value as well as 10% initial interest in any other entity Fallon might later form that targets the Fort Benning market.
After Fallon was elected to Congress in November 2020, he reportedly offered to buy out Haake’s interest in the companies. The overture was part of Fallon’s attempt to liquidate his interest in the businesses and sell it to family members so he could comply with House ethics rules, Haake claims in the filing.
Fallon’s approach led Haake to request an audit of both firms. Fallon refused to permit one, according to the petition. Instead, Fallon said Haake should be content with information he had already provided, which Haake called “woefully inadequate for any meaningful analysis.” Haake claims he also discovered that Fallon had in fact formed three other companies that conduct business at Fort Benning.
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In May 2021, Fallon provided some unaudited financial data, according to Haake, and notified him that Fallon had transferred his ownership stake to his wife, Susan. Haake claims that the conveyance violated their agreement, which required he be informed before any sale.
In a filing made in Denton County, Texas district court on October 29, Haake claims he’s entitled to a 10% ownership stake in all of Fallon’s companies that target the Fort Benning market, a pro-rated cut of any distributions the companies made to their owners, as well as consulting fees. Haake is requesting that the court compel oral depositions from the Fallons. The dispute is not a lawsuit yet. The allegations were brought forth in a petition for oral deposition before suit. Should the dispute continue, the likely next steps would be arbitration and then, possibly, a lawsuit.
Fallon sits on the House Armed Services Committee. His office did not immediately reply to inquiries.
Haake retired from the Army in 2006 and currently heads his own consulting firm, which specializes in public law, policy advocacy and government procurement. He referred an inquiry about the case to his attorney.