AUSTIN — The Texas Ethics Commission is backing off a long-running battle to force conservative powerbroker Michael Quinn Sullivan to comply with subpoenas as part of an investigation into his nonprofit’s political activity.

Attorney General Ken Paxton’s office, which is representing the commission, told a state district judge in Travis County on Tuesday that the campaign finance regulator is no longer seeking the court’s backing to enforce subpoenas against Sullivan or his 501(c)4 nonprofit, Empower Texans.

The subpoenas are part of a “dark money” investigation launched in 2012 by the ethics commission into the campaign finance activity of Empower Texans. The group is allowed to make independent expenditures without having to disclose donors.

State regulators are investigating whether the nonprofit has coordinated with donors to accept or spend money to influence a state election and if it should have to register as a political action committee, which is required to release donor names.

The case also presents precarious optics for Paxton: his office has been defending state-issued subpoenas against a politically active nonprofit with vast clout in tea party circles and whose political arm contributed a total of $375,000 and guaranteed a $1 million loan for his attorney general campaign.

Sullivan, a prominent anti-tax and limited-government activist, had unsuccessfully tried to quash the commission’s document demand in federal and state courts since first being issued in February of 2014. Accusing Sullivan of stonewalling the state’s investigation, the commission filed a lawsuit last year asking a Travis County judge to enforce the subpoenas.

That request for the court to intervene, however, is now “moot,” according to the commission’s notice of nonsuit. Sullivan and Empower Texans, the attorney general’s office says in a filing, made a “judicial admission” last month in a footnote of a related case saying the group raised $375 online during a period when a set of emails were sent that included a donate button. Those emails are the focus of the sworn complaints that prompted the commission’s investigation.

The amount falls below the $500 threshold required under state law for a group to register as a PAC, which Sullivan’s lawyers wrote in a filing is tantamount to “conclusive evidence that Empower Texans did not violate the Election Code.”

“We told them it was less than $500 in 2014,” said Trey Trainor, a lawyer for Sullivan and Empower Texans. “The footnote isn’t a big revelation. It’s an attempt to save face by the ethics commission to say ‘we are just discovering this.'”

Natalia Luna Ashley, the commission’s executive director, said the investigation into Sullivan and Empower Texans is still pending despite the agency dropping its subpoena lawsuit.

“The commission is going to continue to use the tools that the legislature has given to it to investigate complaints and enforce the laws … in order to promote the public’s trust in government,” she said.

The move to dismiss the subpoena lawsuit marks an unexpected twist in the case, as the document demand has become a central issue in the commission’s investigation. The commission has argued it cannot move forward without the documents and even accused Sullivan of destroying files after the subpoenas were first released.

And the issue has also continued to play out publicly: it’s become somewhat of a ritual at commission meetings for Sullivan’s lawyers and regulators to trade tongue lashings about the investigation and subpoenas (that’s actually how the commission spent the first 20 minutes of its August meeting – watch here).

At one point, the commission was seeking the release of a wide range of documents from Sullivan and Empower Texans, including communications with donors, lawmakers and members of the state’s executive branch, with the redaction of names. They also included “time records, calendars and diaries maintained by or for” Sullivan, along with two other employees of Empower Texans.

A federal judge in 2014 called the subpoenas “absurd,” but refused to quash them. Negotiations have followed since then and several different versions of the subpoenas have been crafted, though Empower Texans argues the document demands are still too broad and the commission’s investigation amounts to government intimidation.

In court filings, Paxton’s office had vigorously defended the commission’s power to execute subpoenas to investigate campaign finance matters. Last year, the attorney general’s office in a court filing accused Empower Texans and Sullivan of “thwarting TEC’s attempts to investigate (and potentially dismiss) the sworn complaints at issue because, ultimately, plaintiffs do not believe they have to comply with TEC’s lawful power to investigate sworn complaints.”

But Paxton’s legal team over that time frame has also continually narrowed the scope of the commission’s document demand.

At a court hearing in December, a lawyer for the attorney general’s office told a judge in Travis County the scope of the commission’s subpoenas had been whittled down to seek only minimal information “to measure how much money came in for a regulated activity.”

In June, according to court filings, Paxton’s office told Sullivan and Empower Texans in a related case they could satisfy what’s being asked for in the subpoenas by simply affirming that there is no additional information to disclose or that the total amount of funds the groups raised was less than $500.

“Either response would preclude further proceedings under the filed complaint,” the attorney general’s office wrote.

The involvement of the attorney general’s office in the subpoena lawsuit involving Sullivan is notable not only because of Paxton’s close ties to Empower Texans.

Despite taking an active role in the ethics commission’s legal sparring with Sullivan previously, the state campaign finance regulator sidelined the attorney general’s office in its legal fights with the conservative activist in a separate case. The commission hired prominent Houston-based law firm Beck Redden for court action stemming from a $10,000 fine issued to Sullivan as part of an investigation that determined he violated state law by failing to register as a lobbyist. Sullivan’s appeal is pending.

The attorney general’s office did not immediately respond to a request for comment.

Anthony Gutierrez, executive director of Common Cause Texas, which works to strengthen ethics laws, said Paxton’s office was right the first time when it argued a year ago that the documents being subpoenaed were needed in order for the TEC to make a final ruling in this case.

“This sudden about-face reeks of impropriety,” he said, “and perhaps the worst part is that we may never get to the bottom of it all because the ethics commission lacks the powers it needs to do its job.”