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AG to investigate Kelley hiring of JeRue

OLYMPIA — The attorney general's office will investigate State Auditor Tory Kelley's hiring of long-time business associate Jason JeRue to see if it violated any Washington laws.

Attorney General Bob Ferguson said today he was acting on a request from Gov. Jay Inslee to look into "potential criminal activity" in JeRue's hiring and all evidence related to  his employment, which could lead to prosecution separate from the ongoing federal case. 

The request from Inslee was necessary for Ferguson's office to have the jurisdiction needed to get involved because criminal prosecutions are typically handled by county prosecutors. As far as the attorneys working on the investigation could determine, it was first time the governor has asked the attorney general to investigate a statewide elected official since the law was passed in the 1970s.

Ferguson declined to offer specifics about the scope of the investigation just beginning and dodged a question about whether he personally had concerns about JeRue's hiring before Inslee made the request. "The letter from the governor did not come as a surprise," he said.

JeRue was a business associate when Kelley operated a business that administered millions of dollars in escrow money for real estate purchases. Federal investigators contend the company did not return all of the money required to borrowers. After Kelley was elected state auditor in 2012 he hired JeRue as a part-time technical writer who worked out of his home in California.

Kelley is on an indefinite unpaid leave while federal prosecutors investigate some of his business activity that predated his 2012 election as state auditor. In April, a federal grand jury indicted him on 10 counts that included fraud, lying to federal investigators, filing false tax returns and "corrupt interference with Internal Revenue laws." He pleaded innocent to all counts and his trial date has been moved back to next January. He has resisted calls from Inslee and legislators to resign.

JeRue was fired shortly after Kelley began his leave of absence and was replaced by acting state auditor Jan Jutte.

Sunday Spin: Forcing the state auditor out would be tough

OLYMPIA – The chorus for Troy Kelley to resign as state auditor after he was indicted on federal charges Thursday grew louder as last week drew to a close, but any effort to force him out faces significant problems.

The biggest seems to be that there’s no clear road map on how to push a state elected official out of the position he or she holds. The state constitution has a section for impeachment, which can be started with a majority vote in the House but only culminates with removal if two-thirds of the Senate agrees.

It requires a high bar of high crimes, misdemeanors or malfeasance. The first two would require a conviction on the federal charges; the last applies only to actions while in office, and the indictment is basically pre-election.

A statewide elected official in Washington has never been impeached.

A recall petition has been filed with the Secretary of State, although the signature-gathering threshold to put that on the November ballot is steep, and by then it may all be moot.

Not surprisingly, high-ranking Democrats would prefer Kelley just step down and go away to fight his battle with federal prosecutors away from the state spotlight. Gov. Jay Inslee called for his immediate resignation within minutes of the federal prosecutor’s release of the charging papers. An Inslee spokesman said Kelley called the governor before the indictment was announced, to say it was coming. Inslee reportedly told Kelley at that point he should resign; the auditor said he was taking a leave of absence instead.

Within a couple hours, State Treasurer Jim McIntire, Attorney General Bob Ferguson, House Majority Leader Pat Sullivan, Senate Democratic Leader Sharon Nelson and the state Democratic Party all had said “Go.” Secretary of State Kim Wyman, the lone Republican in statewide elected office, waited a day before joining the chorus.

On Friday, Inslee reiterated his point in writing – not some tweet or text, but an honest-to-God printed-on-paper letter, hand-delivered to Kelley’s unoccupied office. Considering that Inslee’s office in the Capitol Building is just across the street from Kelley’s office in the Insurance Building, this was accomplished much faster that putting a stamp on it and dropping it in the mail. Five minutes, tops, even if the messenger stopped for coffee in the Capitol cafeteria.

Considering the circumstances, some of the formal wording of the letter seems perfectly aligned with Emily Post or Miss Manners, but could have average folks scratching their heads. It’s addressed to “The Honorable Troy Kelley”, although Inslee is suggesting the auditor needs to resign because he is anything but. And it ends with “Very Truly Yours”.

If Kelley does step down

Inslee would choose a replacement, but the timing is important. If the position becomes open before May 11, the first day that candidates can file for office in this year’s general elections, Inslee would appoint someone but the office would be on the August primary ballot and the November general. If he steps down on or after May 11, the appointee would serve until 2016, when that office, like all other state executive positions, are up.

The appointee need not be a Democrat, although Inslee said he was sure there are an ample supply of Democrats who could do the job.

Former Auditor Brian Sonntag told a Seattle radio host he’d be willing to take the position in a care-taker role. An appointment from Inslee seems iffy. Sonntag was, after all, the most prominent Democrat supporting Inslee’s 2012 Republican opponent Rob McKenna.

A possible candidate for the election in 2015 or 2016 could be state Sen. Mark Miloscia, who is now a Republican but ran for the office as a Democrat in 2012 but didn’t get through the primary.

The possibilities may not be endless, but they are plentiful

If he doesn’t

Inslee’s office isn’t sure what happens when a state elected official takes an extended leave of absence under these conditions. Does pay – about $117,000 a year for this position – continue? And what about benefits like health coverage? An Inslee spokesman told the Associated Press it should not, but there’s apparently no law or rule to cover it.

Inslee letter to Kelley: Resign now

OLYMPIA — In case Troy Kelley didn't get the message, Gov. Jay Inslee had a letter hand delivered to the state auditor's office this morning, repeating his call that Kelley resign.

Inslee's letter says Kelley's plan for a leave of absence is "insufficient because the ongoing federal criminal investigation will continue to clude your office's image, reputation and ability to properly function."

After being indicted by a federal grand jury on 10 counts Thursday, Kelley said he would take a leave of absence starting May 1 but would not leave the post. Many of Kelley's fellow Democrats want him to resign.H

Hand-delivery sounds pretty formal, but in practical terms it would only take slightly longer than sending an e-mail, and definitely quicker than standard mail. Inslee's office is in the Legislative Building, which is often called "the Capitol." Kelley's office is across the street in the Insurance Building. So delivery wouldn't take more than about 5 minutes, even if the messenger stopped for coffee in the Capitol basement cafeteria. 

Jumping into 2012 races

OLYMPIA — Five days left in this election cycle, but here's some candidates for the 2012 election.

Sen. Craig Pridemore, D-Vancouver, said today he'll run for State Auditor. Longtime Auditor Brian Sonntag announced more than a month ago he wouldn't seek re-election, and Rep. Mark Miloscia, D-Federal Way, got in the race in October, and Rep. Chris Reykdahl, D-Olympia set up "an exploratory committee" to consider the run. One possible factor in Pridemore's decision: Sen. Lisa Brown, the Senate Majority leader from Spokane, said earlier this week she would not run for auditor.

Rep. Zack Hudgins, D-Tukwila, is running for Secretary of State. That seat is also open, as longtime Sec. State Sam Reed announced this summer he was retiring.  State Sen. Jim Kastama, D-Puyallup, and Republican Thurston County Auditor Kim Wyman are already in that race.

All the state reps will give up their seats if they stay in the race. So will Pridemore and Kastama, because they face re-election in 2012. So the dominoes could start falling in legislative districts around the state.

Reykdal looking at auditor race

State Rep. Chris Reykdal is officially thinking about running for state auditor.

That is, he announced today he's formed an "exploratory committee" to look into the possibility of running for the job being vacated by Brian Sonntag.

Reykdahl, D-Olympia, is the second Democrat to talk about getting into the race. Rep. Mark Miloscia of Federal Way is also in.

If you're thinking that there was a time when only presidential candidates announced exploratory committees instead of just saying "I'm running", you're right. And you're probably kind of old.

Sonntag not running for re-election

Brian Sonntag. File photo

OLYMPIA – State Auditor Brian Sonntag, the longest serving state executive in office, will retire at the end of next year from a 20-year stint at the head of the office that keeps an eye on the other state offices.

Sonntag, a Democrat, surprised members of both parties Monday in announcing he wouldn’t run for another term in 2012. He was briefly mentioned earlier this year as a candidate for governor, although he declined to get into a primary battle against U.S. Rep. Jay Inslee or a general election race against likely GOP nominee Rob McKenna.

Now he says he's made the difficult decision not to run for auditor, either…
  

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