A former high-ranking captain in the Deschutes County Sheriff’s Office has agreed to settle his $2.5 million federal lawsuit against the county and outgoing Sheriff Shane Nelson for $265,000, settlement documents confirm.

Deron McMaster resigned from the sheriff’s office in 2021 after his 28-year career with the agency collapsed due to allegations he failed to report another officer’s misconduct. In his lawsuit, McMaster contradicted the allegations, stating Nelson retaliated against him to cover up for his own misconduct in the case.

A Bulletin article published in October, 2021 based on hundreds of pages of internal documents and audio files describes much of the history contained in the lawsuit. In essence, a scandal involving former deputy Richard “Deke” DeMars came to envelop McMaster after DeMars confessed to McMaster an affair with a subordinate deputy. The investigation of DeMars soon included allegations of domestic abuse by a different woman, a longtime girlfriend, and her two children.

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McMaster alleges he learned during the DeMars investigation that Nelson’s wife, Lisa, had told internal investigators that she and her husband had known about discord in the DeMars household for years.

McMaster says that after he learned the Nelsons knew about alleged abuse in the DeMars household, Nelson placed McMaster on paid leave for alleged policy violations. The sheriff said McMaster should have gone to him directly regarding DeMars, rather than go to DeMars’ supervisor as well as an outside agency, which is what McMaster did.

McMaster and his attorney received discovery documents as part of the disciplinary process, but missing from the documents — and the only thing missing — was a copy of Lisa Nelson’s interview transcript, according to the lawsuit.

McMaster’s original complaint, filed in U.S. District Court of Oregon in 2022, alleged violation of First Amendment rights, 14th Amendment rights to due process, federal disciplinary procedures against public safety officers, whistleblower retaliation, discrimination for initiating civil proceedings and intentional infliction of emotional distress.

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The settlement, signed Monday by Deschutes County Administrator Nick Lelack, explicitly acquits the county from any allegations made in McMaster’s lawsuit and states that, “to the contrary, the parties agree and acknowledge that each of (them) expressly denies liability … for any and all claims alleged in the lawsuit.” This includes McMaster’s claims that Nelson attempted to cover up his wife’s testimony.

The agreement parses out the $265,000 into two payments: one $235,000 payment to McMaster and a $30,000 payment to his attorneys for legal fees. That amount does not include}$99,572 in external legal fees the county incurred representing the Deschutes County Sheriff’s Office, according to records obtained by The Bulletin.

It is unclear how much the county has spent on legal fees in light of a slew of new political retaliation claims filed by sheriff candidate Kent Vander Kamp and three other employees this year. Nelson is also using county money to fund a lawsuit against the city of La Mesa, California, for failing to release Vander Kamp’s 27-year-old employment records.

McMaster’s lawyer, Andrew Mittendorf, said McMaster is “happy to have it done and move forward with his life.” After he left the sheriff’s office, McMaster worked as an airplane mechanic at Redmond Airport, but Mittendorf said now that the case is settled he has retired and wants to be certified as a licensed airplane maintenance inspector.

Members of the Deschutes County Commission did not immediately respond to The Bulletin’s requests for comment.