GOP senators fear Kelley will game pension system

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Sen. Barbara Bailey

Three Republican state senators are leery about the possibility that indicted State Auditor Troy Kelley might exploit a loophole to earn pension benefits while he is on leave to defend himself in court.

Sen. Barbara Bailey, R-Oak Harbor, introduced a bill Thursday to block statewide elected officials from receiving credit toward their pensions while they are under indictment. Sens. Steve O'Ban and Mark Miloscia joined her in submitting the bill.

Kelley faces 10 federal counts of tax fraud, lying under oath and lying to the federal Internal Revenue Service. Kelley pleaded not guilty. On May 4, he took an indefinite leave of absence, which is supposed to last until his trial is complete. His trial date is Jan. 19, 2016. In his absence, Jan Jutte, director of operations at the auditor’s office, is serving as interim state auditor.

The state's current pension system allows employees on leave to make catch-up payments to the pension system after they return from their absences.

"This rule is really designed for the employee who takes time off to care for a sick relative, or some other legitimate reason. ... All of us ought to be appalled at the fact that [Kelley] can abandon his office and still count time off toward his pension," Bailey said.

Bailey, O'Ban and Miloscia said Kelley has been very careful on how he worded his rare statements to the press and to Gov. Jay Inslee, likely believing he could return to work for one day and catch up on his pension benefits obligations accumulated during his absence. Bailey said the pension amounts are still being calculated, but a rough first look indicated Kelley might be able to collect $200 a month in pension benefits stemming from his time on leave.

"If this is why Auditor Kelley is staying in office, we'll close that loophole," Miloscia said.

There are scattered calls for impeachment among the House and Senate rank-and-file. At least in the House, the Democratic and Republican leaders want to avoid tackling impeachment because of the massive amount of complex budget negotiations underway.

The last time the state House voted to impeach someone was in 1909 when it impeached Insurance Commissioner John Schively for extorting money from insurance companies. The Senate later acquitted Schively.

The earliest the House could act on a resolution to start the impeachment process is next week — that is, if it actually makes it to a floor vote. If passed in the House, an impeachment resolution would set up a bipartisan, six-person committee, which would draw up articles of impeachment in an effort to obtain a simple majority -- 50 votes out of 98 -- of the House. The Senate would then conduct a trial in which a two-thirds majority -- 33 out of 49 votes -- would be required to remove Kelley from office.

Gov. Inslee, all four legislative caucus leaders and all of Washington’s statewide elected officials have called for Kelley to resign. Nevertheless, the state auditor has hunkered down and said very little to anyone, other than that he won’t resign. Inslee has ordered that Kelley not be paid while he is on leave.

Bailey said the pension credits bill could easily get passed during the Legislature's current special session because it can be routed through the Senate Ways & Means Committee and House Appropriations Committee as budget bills are simultaneously going through.


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About the Authors & Contributors

John Stang

John Stang

John Stang is a freelance writer who often covers state government and the environment. He can be reached on email at and on Twitter at @johnstang_8