State Republican Chair Calls for Kelley to Step Down

Washington State Auditor Troy Kelley

It’s not often that Republicans and the Democratic governor of Washington state, Jay Inslee, approach anything even close to tonal harmony in their public statements, almost as rare as federal authorities raiding the home of a statewide elected official.

Both uncommon developments occurred this week after federal agents conducted a warranted search of Washington State Auditor Troy Kelley’s Tacoma home Tuesday, an event that so far has created far more questions than answers.

On Friday, the potential revelation of what federal investigators might be looking for seemed closer with the release of a grand jury subpoena issued March 5th by the United States District Court in Seattle upon the office of the state auditor.

Under the order, the auditor’s office was required to hand over personnel files, emails, and work records of Jason Jerue, a part-time employee at the auditor’s office who previously worked at Post Closing Department, the mortgage title tracking company Kelley ran before his election to public office.

In 2011, Kelley settled a lawsuit with Old Republic Title under undisclosed terms.  In the suit, Old Republic claimed that Post Closing Department improperly kept $1.2 million in fees and unlawfully moved more than $3.8 million in funds between several bank accounts.

In the run-up to Kelley’s 2012 election, the Northwest Daily Marker reviewed and reported on deposition transcripts in which Kelley and his wife both seemed to confirm some of the funds in question were transmitted to an account in Belize.

In an email sent Thursday, Washington State Republican Party Chairwoman Susan Hutchison predictably sang a bit louder than Inslee, calling for the auditor to resign.

“As State Auditor, Kelley is responsible for finding and preventing waste, fraud, and abuse in state government. The position requires the highest standards of honesty and integrity. The citizens of this state are not served when the character of the State Auditor is called into question. Allegations of wrong doing occurred during his election in 2012, and have been affirmed by the media and now the federal government. If Kelley does not immediately step down, Democrat Governor Inslee should do the right thing and demand Kelley’s resignation.” [sic]

Though not responding directly to Hutchison’s demand, on Friday his office released a statement from communications director David Postman:

“The governor is very concerned about the apparent federal investigation involving the state auditor. We hope that the auditor will work with authorities and to the greatest extent possible – and as soon as possible — be open with the public. The voters, local governments, lawmakers and our administration need to have complete confidence in Mr. Kelley’s ability to carry out the very important duties of state auditor. The auditor should recuse himself from any official action involving this investigation. Washingtonians need to be assured that the auditor’s office will be able to continue its work without distraction or disruption by this investigation.”

Of course, Inslee’s request for transparency is only that—a request—and the substance of exactly what Kelley is being investigated for is not yet known.

Nevertheless, the empaneling of a grand jury that has subpoenaed a state agency for records relating to one of Kelley’s associates in advance of a raid of the auditor’s home is certainly cause for speculation.