I read with interest the News Tribune editorial (10-22) urging Troy Kelley to resign as state auditor because of accusations made by federal prosecutors in an indictment. I write on Kelley’s behalf to appeal to your editorial board, the Legislature and the public for fairness.
I’m afraid your faith in the infallibility of federal prosecutors to properly decide whether to call business activity a “crime” is misplaced. There are many cases in which high-profile targets have had their reputations ruined by federal prosecutors who filed indictments later rejected by judges and juries.
Last month, The New York Times reported on an indictment against the chair of Temple University’s physics department, Dr. Xi Xiaoxing, for allegedly selling secret technology to the Chinese government. After his indictment, the university placed him on administrative leave, took away his title as chairman and imposed strict rules on his ability to interact with others regarding his work.
Later, federal prosecutors admitted that they had mistakenly interpreted the evidence and could not prove their case. Xi asked how prosecutors could have charged him without understanding the case. The Times noted that he “choked back tears as he described an ordeal that was agonizing for his family. ‘I barely came out of this nightmare.’”
Xi is not an isolated victim of wrongful prosecution. There are many similar cases that can be found by briefly searching the web. Your suggestion that federal prosecutors have limited resources and do not prosecute unless there is a substantial case does not square with history, particularly where public officials are involved. The recent prosecution of Sen. Ted Stevens, in which a federal judge blasted the Department of Justice for concealing exculpatory evidence to obtain a conviction, is one more example.
Kelley’s case is set for trial in March in U.S. District Court in Tacoma. I would urge you not to prejudge his case. The evidence will show whether his case is as your editorial presumes it is or is like Xi’s. The trial will show it is like the latter. Kelley’s appeal is not simply “innocent until proven guilty.” It is, “I am innocent.”
I have practiced law for nearly 30 years, including serving as a federal prosecutor, and, based on that experience, I can say that this case is highly unusual. At its essence, the prosecution challenges the title industry’s practice of not making payments to homebuyers of “excess” fees for reconveyance services performed to clear title on homebuyers’ properties.
The government contends that not making those payments is the equivalent of theft, even though Kelley performed all the reconveyance services required by the contract. It is this contract dispute that prosecutors now call money laundering.
After Kelley’s trial, the Legislature will have a public and complete record of what happened instead of the words of prosecutors in an indictment which have not been critically examined. There is little use in the Legislature conducting a parallel impeachment trial that will disrupt the federal criminal proceedings. If the goal is to have a publicly elected auditor in office, then an impeachment proceeding would be of little value because it appears there cannot be an auditor election until November 2016.
While this is being resolved in the courts, Kelley has taken an unpaid leave of absence and the state Auditor’s Office is operating with its current staff in a way that protects the public until the matter is resolved. This seems like a fair balance that prevents a publicly elected official from being removed from office based only on accusations.
Angelo Calfo is a former federal prosecutor and white collar criminal defense lawyer based in Seattle. He represents Troy Kelley.