Gov. Jay Inslee this morning called for State Auditor Troy Kelley to be open with the public about an apparent federal investigation. Federal agents this week have subpoenaed records from Kelley’s state office in Olympia and searched his Tacoma home.
“The governor is very concerned about the apparent federal investigation involving the state auditor,” Inslee’s office said Friday in a written statement. “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 governor’s statement continued, "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.”
Kelley and his family have been on vacation -- reportedly in California -- since March 13. He is scheduled to be back on the job on Monday. So far, he has issued only one brief emailed statement, saying he did not know the reason for the search of his home by U.S. Treasury agents on Monday.
Federal agents obtained records from his office with a subpoena on Thursday, said auditor's office spokesman Thomas Shapley. Shapley did not know Friday what documents were taken. Kelley immediately removed himself from any official action regarding the federal investigation, including being involved in the federal subpoena action, Shapley said.
The U.S. Attorney’s office in Seattle has a policy of neither confirming nor denying the existence of an investigation until any charges are filed.
Kelley, a Democrat, represented southern Pierce County’s 28th District as a state representative for three terms before being elected state auditor by a 53 percent-to-47-percent margin in 2012. He is a lieutenant colonel in the Washington National Guard’s Judge Advocate General’s office and a former federal prosecutor.
Prior to become state auditor, he owned a business that tracked title documents. In a lawsuit a former client, Old Republic Title, a title-insurance firm, alleged breach of contract and the misappropriation of $1.2 million against Kelley. Kelley denied the allegations. The case ended in 2011 with a closed settlement. The News Tribune of Tacoma noted that Kelly was asked questions about tax payments during that case.
In a written statement, state Sen. Mark Miloscia, R-Federal Way, also called on Kelley to be open about the probe. Miloscia is the Senate Republicans’ leader on government accountability issues and he ran for auditor in 2012, finishing fourth in the primary. Miloscia said, “The auditor needs to come clean about the events of the past week and the subpoena served on March 6. Until we know why this federal investigation is underway, the credibility of the auditor’s office is in doubt."
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