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Dispatches from public radio's correspondent at the Washington Legislature. Austin Jenkins is the Olympia correspondent for the Northwest News Network. You can also see Austin on television as host of TVW's (the C–SPAN of Washington State) weekly public affairs program "Inside Olympia."

Mostly Silent Now, But In 2012 Troy Kelley Addressed Allegations

Austin Jenkins
Northwest News Network
In 2012, then-candidate for state auditor Troy Kelley met with reporters to address allegations against him in court documents posted online by his Republican opponent.

Washington State Auditor Troy Kelley is choosing to remain mostly silent about his legal troubles.

Last month, federal agents searched the Democrat's home and a grand jury subpoenaed his office. But in 2012, when Kelley was a candidate for auditor, he did address questions about his past business practices and whether he was up to date on his taxes.

Misdeeds or smear campaign?

On September 6, 2012, Troy Kelley’s Republican opponent for state auditor launched a website called That website included links to lawsuits involving Kelley that included a number of allegations of financial and other misdeeds.

That afternoon, Kelley called reporters to the backroom of a restaurant in downtown Olympia to address the allegations. The press availability, as he called it, got off to a rocky start.

“You bring your camera in even though we requested that you did not?” said Kelley to a TV reporter who wasn’t taking no for an answer when a campaign aide said no cameras. A heated exchange followed.

“I’m worried about selective editing that’s all,” Kelley said. “If you’d like to interview me after, that’s fine.”

Ultimately, Kelley relented and allowed the camera in. He then proceeded to suggest he was the target of a political smear campaign.

“In my opinion this is page one of the Tea Party playbook,” he said. “The same folks that in the year 2000 went after John McCain for fathering a child out of wedlock with a black woman, which is a racial issue in South Carolina. So, that’s my opinion.”

A stolen painting?

Next, Kelley launched into a defense of his character. He noted that he’s a lieutenant colonel in the Washington Army National Guard with a “secret” security clearance. He said he was a licensed lawyer in three states plus the District of Columbia. Records show his license in California was inactive at the time. He noted that he was about to be a featured speaker at an upcoming escrow convention.

“The allegations are absurd,” Kelley said. “If half of them were true I wouldn’t be a member of the bar or anything else.”

One of the allegations contained in hundreds of pages of legal documents was that Kelley had stolen a painting from his former employer in California after he was let go. At the news availability in 2012, Kelley denied he was the one pictured in a surveillance camera image of the theft.

“It’s not me in the photo,” he said. “So someone else created the photo and who knows why other than to discredit me.”

Asked if he was suggesting the photo was doctored, Kelley adjusted his answer.

“I don’t think it’s photoshopped,” he said. “I don’t think that’s me in the photo. I’ll take a look at it. I haven’t seen it in 13 years. My recollection at the time was they thought it was someone who looked very different from me.”

Addressing multiple allegations

Kelley was then asked about allegations contained in a 2010 lawsuit filed against him by one of his clients -- Old Republic Title. A federal judge had summarized the allegations against Kelley in an order denying his request to seal the court records. Those allegations included: misappropriation of funds, fraudulent transfers and tax evasion.

In the 2012 news availability, Kelley first went after the judge.

“I can’t imagine it’s political, but he had no judicial experience whatsoever,” Kelley said. “Again I don’t want to piss off a federal judge, but no experience going into this and he was appointed by George W. Bush.”

At the time, the judge had been on the federal bench for seven years. As to the specific allegations, Kelley took them one-by-one:

  • Tax evasion: “There’s been no IRS action, civil or criminal.”
  • Fraudulent bank transfers: “The money went to a Nevada bank because that’s where the holding company was.”
  • An offshore account in Belize: “That was set-up with a minimum balance by an outside attorney when I found out about it, it was closed.”
  • Misappropriation of fees that should have been refunded to title company customers: “No, no. Whenever we collected fees we did the work.”

The press availability ended with Kelley saying he assumed he would now be audited by the IRS.
Kelley did not respond to requests for comment for this story. In a previous statement, Kelley said he was “puzzled” by the feds interest in his past business dealings. He has not been charged with any crimes.

Since January 2004, Austin Jenkins has been the Olympia-based political reporter for the Northwest News Network. In that position, Austin covers Northwest politics and public policy, as well as the Washington State Legislature. You can also see Austin on television as host of TVW's (the C–SPAN of Washington State) Emmy-nominated public affairs program "Inside Olympia."