Politics & Government

Indicted state Auditor Troy Kelley returns from leave

VIDEO: State Auditor Kelley talks about returning to work

Embattled State Auditor Troy Kelley talks about his return to work Tuesday at the Auditor's Office in Olympia.
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Embattled State Auditor Troy Kelley talks about his return to work Tuesday at the Auditor's Office in Olympia.

State Auditor Troy Kelley’s seven months of self-imposed exile are over.

Kelley returned to the Auditor’s Office in Olympia on Tuesday and informed employees he would resume his duties despite a criminal indictment hanging over his head.

The Tacoma Democrat said in an interview he’s back from indefinite leave because he was “shocked” to learn Monday of a proposal to impeach him on grounds of “dereliction of duty.” Four House members announced they want the Legislature to impeach Kelley after lawmakers return to Olympia in January.

Kelley said he would finish out his first term, which ends in January 2017.

“I will continue to perform the job the people of Washington have elected me to do, and I will not back down in the face of political pressure and a false indictment,” Kelley said in a statement.

Kelley goes on trial in March on charges including money laundering and tax evasion. The charges relate to his former business in the real-estate title industry, not to his conduct as auditor.

Prosecutors say Kelley kept nearly $3 million in fees he should have refunded to title companies and homeowners between 2006 and 2008. He was a state lawmaker representing Pierce County for much of that time.

In an interview, Kelley didn’t rule out seeking re-election but said a person “would be crazy to want that.” He said that had he known then what he knows now, he wouldn’t have run for auditor in 2012 and probably not for the Legislature, given how hard the scrutiny has been on his school-age children. “I cannot imagine running again for anything,” he added later.

Democratic Gov. Jay Inslee and all four political groupings in the Legislature — House and Senate Republicans and Democrats — have formally asked Kelley to resign. But instead of quitting, he took an unpaid leave of absence starting May 4 and delegated his responsibilities to an employee, Jan Jutte.

Inslee spokeswoman Jaime Smith said Jutte has ably led the office and its more than 350 employees.

“Kelley’s reappearance is likely to disrupt the very important work she and her team are doing,” Smith said in a statement. “The Office of the Auditor provides essential accountability and watchdog functions for state government and should remain free from the distractions and drama of Troy Kelley’s legal challenges.”

Kelley repeatedly cited members of Congress who have remained in office while under indictment, Sen. Robert Menendez, D-New Jersey, and the late Sen. Ted Stevens, R-Alaska.

Despite Kelley’s return to office, state lawmakers may still try to impeach the long-absent auditor, said state Rep. Chris Reykdal, D-Tumwater.

Reykdal, one of the four lawmakers who planned to file an impeachment resolution, said he still thinks Kelley abdicated his duties by taking such a long leave of absence. That’s especially true if Kelley is now returning mainly for political reasons, Reykdal said.

“If you can come back here on a Tuesday, why weren’t you there on Friday and the Monday and the previous 200 days?” Reykdal said. “What’s changed for you? Pure politics.”

Reykdal said he and the other three lawmakers backing the impeachment resolution will meet in January and decide whether to move forward with it.

“I feel like they’re trying to pick up political points,” Kelley said of lawmakers. “The person leading this is running for statewide office.” Reykdal is running for superintendent of public instruction.

In his statement, Kelley said: “I had previously taken a leave of absence upon the request of the same legislators who are now attempting an impeachment based on the sole fact that I did what they asked me to do — take leave without pay.”

State Rep. Drew Stokesbary, R-Auburn, said he thinks lawmakers should press on. Stokesbary said he and other lawmakers earlier this year also asked Kelley to resign permanently, not step away from office and come back at his leisure.

“He left his office for seven or eight months,” Stokesbary said. “I don’t think him returning to office changes the fact that he abandoned his office for those seven or eight months.”

Kelley said he would be effective despite tensions with other government officials and would focus on the office’s internal workings.

Outreach to lawmakers and state agencies is where Jutte plans to focus some of her efforts, she said, while also “helping with the day-to-day operation.”

“I am not reverting to the director of operations role,” she said. “I am going to stay in more of a role like I’ve been filling for the last seven months.”

Jutte and Kelley met occasionally though not daily or weekly while he was away, Kelley said.

Assessing her time as acting auditor, Jutte said she was able to add details to the agency’s stated goals on what initiatives it would take to achieve those goals.

One of Jutte’s first actions on the job was to dismiss Jason JeRue, a former Kelley business associate hired by the Auditor’s Office to work part-time from his home in California. Kelley said he would let Jutte’s decision stand.


Jordan Schrader: 360-786-1826, @Jordan_Schrader

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