The Washington Attorney General’s Office has begun investigating whether anything illegal happened in the relationship between indicted State Auditor Troy Kelley and long-time crony Jason JeRue, who used to work for the auditor’s office.
Attorney General Bob Ferguson announced the investigation Tuesday, but declined to say what crimes might be suspected. Ferguson said the probe has just begun.
The Attorney General’s Office began the investigation at the request of Gov. Jay Inslee.
In a letter to Ferguson, Inslee wrote: “I remain concerned about the potential of misconduct relating to [Kelley’s] operation of the Auditor’s Office. … I believe that the public and affected government agencies deserve greater assurances that the work of the office during Mr. Kelley’s tenure was handled properly particularly as it relates to the employment of Mr. JeRue.”
In April, a federal grand jury indicted Kelley on 10 counts of tax fraud, lying under oath and lying to the federal Internal Revenue Service. He has pleaded not guilty to the charges. Kelley’s trial is set for January.
Inslee, legislative leaders from both parties and other statewide elected officials have called on Kelley, a Democrat elected in 2012, to resign. He has refused to do so, instead going on an unpaid leave on May 1. The leave is supposed to last until his trial is over.
JeRue, who lives in a so-far unidentified city in California, has been a mystery man in the Kelley affair.
Nine of the charges against Kelley pertain to the time when he was president of Post Closing Department, a title documents firm owned by Kelley. The company is now closed. The 10th charge — lying to the IRS — allegedly occurred after Kelley, a former state legislator, became auditor. Kelley allegedly stole about $1.4 million in fees that he was not entitled to keep.
JeRue was vice president of Post Closing Department, and constantly dodged depositions in a civil lawsuit brought against Post Closing. Hired by the Auditor’s Office at Kelley’s request in 2013, JeRue was a part-time technical writer telecommuting from California. He was rarely seen in the agency’s Olympia office. His writing involved behind-the-scenes administrative work. JeRue’s wage was $22.68 an hour. He earned $15,286 in 2013 and $22,884 in 2014.
JeRue was not named in the federal indictment against Kelley. When interim state Auditor Jan Jutte took over on May 1, one of her first acts was to terminate JeRue’s employment.
In a written statement, Jutte said “We welcome the Attorney General’s investigation into the hiring of former State Auditor’s Office employee Jason JeRue. … I believe the cloud over Troy Kelley is a personal cloud; it is not a cloud that belongs over this office. I am confident that this investigation will bear that out.”