Democrats in the Pacific Northwest were already having a tough year, scandalwise, and the road forward isn’t looking much better because of news Thursday that Washington State Auditor Troy Kelley was indicted by a federal grand jury on charges of filing false tax returns, obstruction of justice and possession of stolen property, according to multiple news outlets.
From Q13 Fox:
The grand jury returned the indictment Wednesday, and it was unsealed Thursday. Kelley is scheduled to appear at U.S. District Court in Tacoma at 2:30 p.m. Thursday.
According to the indictment, between 2003 and 2008 Kelley operated a business that was paid by real estate title companies. Kelley allegedly had agreements with those companies for fees he could change in connection with document-tracking work. Kelley allegedly kept money from transactions with the companies, resulting in more than $2 million in stolen money.
Furthermore, the indictment alleges the state auditor failed to pay federal taxes and obstructed IRS in its efforts to collect taxes from him.
The federal investigation targeting Kelley became public in early March when the press learned that agents had raided Kelley’s home and served a subpoena for documents on the state auditor’s office. Since then, Kelley’s fellow Democrats have kept their cards close to the vest regarding any need for the auditor to step down, but all reticence disappeared on today’s breaking news as a wave of calls for Kelley to resign emerged.
In a rare display of unity, elected representatives and officials from both parties were all saying basically the same thing Thursday—Kelley must step down.
Gov. Jay Inslee, who one day earlier seemed to become semi-belligerent when a reporter asked questions about how hard he was willing to press Kelley for a meeting to discuss the investigation, put on his alpha dog collar and demanded Kelley’s resignation.
“This indictment today makes it clear to me that Troy Kelley cannot continue as state auditor,” Inslee said. “He should resign immediately. An appointee can restore confidence in the office and assure the public that the Office of the State Auditor will operate at the high standards required of the post.”
State Democratic Party Chairman Jaxon Ravens also surfaced to join the frenzy.
“Troy Kelley no longer has the trust of the people of Washington, and it is time for him to resign,” said Ravens.
On the flipside of the spectrum, State Republican Party Chairwoman Susan Hutchison was among the first to ask for Kelley’s resignation, and released a statement today in which she upped the ante by suggesting that if Kelley won’t step down, the Legislature should move to impeach.
“Democrat State Auditor Troy Kelley has been indicted for tax evasion, filing false tax returns, false declarations, obstruction, and possession of stolen property. He must resign immediately. We were the first to call upon Kelley to resign many weeks ago when it became clear that the investigation into his financial dealings would harm the reputation of the office. If he chooses not to resign immediately, the legislature should introduce articles of impeachment. The position of Auditor is responsible for holding individuals and entities in government accountable for their financial management. It is imperative that Kelley resign immediately in order to restore trust in state government.”
According to KING 5 reporter Drew Mikkelsen, Democratic lawmakers are not going to take impeachment off the table.
Kelley has scheduled a news conference for 4:00 PM Thursday and released a prepared statement to the press in which he denied the charges but has only stated that he would take a voluntary leave of absence beginning May 1.
“I am obviously disappointed that the U.S. Attorney’s office has taken this action,” Kelley wrote. “I believe the indictment has no merit and want to note that none of the allegations touch on my work as an elected official in any way.”
“Beginning May 1st, I will take a temporary leave of absence from my duties as Washington State Auditor to allow my office to continue to do its important work without distraction,” the auditor continued. “I fully intend to resume my duties after I put these legal matters to rest.”
If Kelley Does Decide to Resign, What Happens Next?
Should Kelley heed the demands of nearly every elected official and opinion leader in the state and step down, what happens next is largely a matter of timing.
A representative from the State Attorney General’s Office confirmed by email that state law provides for an interim successor to be appointed but requires an election to permanently fill a vacancy in a statewide elected office.
The election to fill the vacancy be on the next available statewide general election for which the filing period has not yet begun.
The filing period for the November 3, 2015 election begins May 11. So, if Kelley resigned on May 12, his appointed successor could conceivably be the interim acting state auditor through the November 2016 election. Some might argue that Democrats have a strong incentive to talk tough in the hallways of Olympia while slow-walking on the actual process of pressuring Kelley to move on.
[Ed. We previously reported that the filing period for the next general election began on May 12 which was incorrect. We have updated the story above accordingly.]