Washington Auditor Troy Kelley says he’s cooperating with investigation

OLYMPIA – Washington state Auditor Troy Kelley returned to work Monday following a week during which his home was raided by federal agents and his office turned over records subpoenaed by the Justice Department.

But the elected Democrat remained out of the public eye, issuing a written statement to reporters waiting in his lobby saying that all of his actions over the years have been “lawful and appropriate.”

In the statement, Kelley said he was aware that the U.S. attorney has questions about financial activities at a business he owned before he was elected. Kelley said he has fully cooperated but remains “puzzled by their interest.”

“I do not know any specifics about their inquiry, despite repeated requests for information, and cannot comment further,” he wrote. “I can assure you that all of my actions over the years have been lawful and appropriate.”

Kelley canceled a speech planned for Monday at a conference in Olympia and doesn’t have plans for any public appearances in the coming days, according to his spokesman, Thomas Shapley. He said the auditor is limited in what he can say because of the investigation.

“It’s my understanding if anyone were to speak about it without permission they run the risk of obstruction of justice charges,” Shapley said.

Information continues to come out about the wide net the federal government has cast around Kelley, who as state auditor is tasked with rooting out fraud and misuse of public funds.

The FBI requested and received details of Kelley’s expenses from the years he served in the state House of Representatives.

There were also separate requests from the Internal Revenue Service for license information and tax returns from Blackstone International Inc., an investment holding company that listed Kelley’s home address as its location. The requests from late February and earlier this month were released Monday by the state Department of Revenue.

Department spokeswoman Kim Schmanke said it sent the documents to the IRS but the tax returns could not be publicly released because of state confidentiality laws. Also sent to the IRS, and released publicly Monday, was license information for four previous businesses that listed Kelley’s home address as a mailing address.

The state Public Disclosure Commission also confirmed Monday that the FBI sought all of Kelley’s personal financial disclosure forms and the case file related to a campaign finance complaint against him. Those documents were turned over in January, commission spokeswoman Lori Anderson said.

Late Friday, Kelley’s office released a Department of Justice subpoena that sought documents related to a part-time employee at the auditor’s office who was a longtime business associate of Kelley.

The federal grand jury subpoena, dated March 5, sought material related to 46-year-old Jason J. Jerue, who once worked for the auditor at another one of Kelley’s companies, Post Closing Department, which handled filings from real estate transactions. That company has since closed.