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Editorial: Washington state should allow feds to carry load in auditor case

Thu., June 11, 2015

Troy Kelley is out of Washington state affairs while he awaits a January trial in U.S. District Court on a 10-count federal indictment alleging fraud, lying to federal investigators and the filing of false income tax returns.

But the refusal of the man elected state auditor to resign the position two months after the indictment has galled just about every other officeholder in Olympia. Frustrated Gov. Jay Inslee this week opened another front in the campaign to force him to step down by asking Attorney General Bob Ferguson to investigate Kelley’s hiring of his former business associate, Jason JeRue.

Ferguson has put two of his top deputies on the case, and the investigation is already underway.

Although The Spokesman-Review has joined the universal calls for Kelley to clean out his desk, we question whether this is the best use of state resources given his absence without pay, and the ongoing federal prosecution.

To be clear: Kelley is unfit to be auditor, if only for his misrepresentations to the citizens of Washington regarding the indictments and the events that brought about the federal action. If the public cannot have absolute confidence in the auditor, the work the office does policing the efficiency and accuracy of state and local agency financial practices will be compromised.

Inslee did well to install Jan Jutte in the office immediately after Kelley took leave. She dismissed JeRue in short order.

The former employee has remained in California, where he and Kelley worked together, throughout his employment by the state of Washington.

Any evidence of impropriety regarding JeRue’s hiring would be the first that might be grounds for state charges. All the activity that was the basis for the federal indictments is related to Kelley’s conduct of the business he and JeRue co-owned in California, not to anything he has done since becoming Washington state auditor.

JeRue was not indicted. His work for the auditor’s office included compiling media lists and tracking press coverage of Kelley, and reviewing the work of auditors in other states.

His pay was modest: a little less than $23,000 in 2014, the only full year he worked for the state. Perhaps he needed a job. Perhaps Kelley wanted to keep him quiet. It’s a good bet federal investigators are looking at the nature of their relationship throughout their association in business, and as state employees.

The compelling state interest in all this is that Kelley stay away from his titular office. The federal prosecution should keep him pinned down into 2016. It would be surprising if Ferguson’s office could complete an investigation and bring Kelley to trial – if any charges are filed at all – before the federal prosecution reaches whatever conclusion it may.

Anxious as we are that Kelley be purged from office, the correct strategy here is to let the U.S. Department of Justice carry the load. A state prosecution, if appropriate, can piggyback on the federal findings.

And whatever the outcome of the federal trial, the state can and should proceed with its case, should there be one.