As a candidate for Washington State Auditor, State Rep. Troy Kelley (D) is asking voters to entrust him as their watchdog over government, but newly obtained documents from three civil lawsuits filed since 2001 show that Kelley himself has faced serious allegations of theft and wrongdoing that could cast new light on his suitability for the office.
The documents tell a story Kelley seems not to have wanted voters to know about and has gone through legal steps to try and conceal.
(According to a source speaking on condition of anonymity, Kelley has also been given an opportunity by a local media to address the existence and substance of the allegations made against him in the suits, but has failed to do so.)
In the most recent case brought against Kelley by Old Republic Title in 2009 (just prior to his run for state representative), it was claimed that while processing closing paperwork on thousands of home mortgage transactions in the finance boom between 2002 and 2010 he misappropriated between $1.2 million and $3.8 million, according to court records.
Old Republic’s chief claim was that Kelley failed to reimburse them and mortgage borrowers for unused portions of pre-paid fees and converted the kept funds for personal use, eventually trying to ship them offshore to accounts in Belize.
In depositions, Kelley confirms a series of financial transactions moving $3.8 million between accounts, but does not express any knowledge of what was being transacted. Kelley closed the company named in the lawsuit, settles the case for an undisclosed set of terms, and asks the court to seal the records, a request the court denies.
In 2001, Kelley sued his former employer, First American Corporation, on claims wrongful termination and defamation, accusing a manager at First American of falsely telling others Kelley “had his hand in the cookie jar,” “took our claim asset, that big house, and lived in it until he was caught,” and “was stealing from the escrow accounts.”
But even in this earlier case, Kelley’s testimony in depositions seems to cast more bad light on him than on the defendant in the case.
As the attorneys for First American began to depose Kelley, they produced what they alleged was photographic security camera evidence of Kelley stealing a framed picture from his former Glendale, Calif. office in the weeks following his receiving a final paycheck from the company. While under oath in the depositions, Kelley would not directly deny or confirm the photos were of him, claiming he was in Seattle on the date in question. Kelley also testified that he had lived in the mansion owned by First American, appearing to contradict another of his specific claims of defamation.
Attorneys for First American then subpoenaed credit card statements and other records to corroborate Kelley’s claim regarding his whereabouts, but Kelley failed to produce them. First American’s request for a hearing to deal with the matter of Kelley’s failure to give over his records was granted and a hearing set for August 13, 2002. On August 9, 2002, Kelley withdrew the case.
Though each of the cases Kelley was involved in ended without a trial or a decision (one suit brought by Kelley was withdrawn by him, two others were dismissed after undisclosed settlements were reached), his involvement in them and the seriousness of the allegations made raises sensible, reasonable questions about his professional conduct and ethics.
The fact that the documents are being brought forward by Kelley’s opponent in the race–Republican James Watkins–is bound to raise skepticism, but a layman’s review of the actual court records indicates there is more to this than a mere episode of partisan mudslinging. At the very least, there are serious allegations that should elicit a response from a candidate for trusted public office.
Many of the court records and supporting documents are now available on a website (factchecktroykelley.com) paid for by the Friends of James Watkins.
Over 2 Million dollar withdraws and transfers. WTF!
And there is NO SARs alert by Columbia Bank in Tacoma? This is a requirment of FINCEN laws. Why didn’t Columbia Bank flag these withdraws and transfers as SAR transactions required by law?
And where is the vetting by the local Tribune on their golden boy who just happens to move money to BELIZE!!!!
Pur corruption by the Democratic Party in Tacoma.
Brian, thank you for this terrific article. I would have voted for James anyway, but this information about Kelley makes me wonder if he will even stay in the race. How can anyone vote for someone who isn’t qualified to audit a lemonade stand?
I will proudly vote for integrity and competence; I will vote or James Watkins.