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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."

Despite Past Allegations Of Misdeeds, Kelley Ran For Washington State Auditor

Washington Legislature
Washington State Auditor Troy Kelley Kelley has pleaded not guilty to federal charges and is on leave.

Why would someone who had been accused of financial misdeeds run for political office? That’s a recurring question in the case of indicted Washington State Auditor Troy Kelley.

The first-term Democrat is accused of corrupt business practices and tax evasion -- allegations that have dogged him since before he ran for statewide office.

Now, Kelley has pleaded not guilty to federal charges and is on leave.

An impressive résumé

Democratic campaign consultant John Wyble first helped Kelley in 2006 when he ran for the Washington state House. Back then Kelley was a virtual unknown, but Wyble said Democratic Party leaders were impressed by Kelley’s résumé.

“They liked his military background and his business background,” Wyble noted.

Kelley is a lieutenant colonel in the Washington Army National Guard and back then owned his own real estate services company.

Recalling his first impression of Kelley, Wyble said, “I thought he was a very by-the-book kind of guy, actually.”

When Kelley called in 2012, Wyble said, “[Kelley] said he was running for auditor. I think I’d seen that he was running for auditor, and [he] wanted some political consulting help.”

So Wyble signed on. At some point, Wyble said he asked Kelley a question he asks all of his clients: is there anything in your past or in your present that might affect this election.

“And so I asked him that and he said ‘You know, there were some lawsuits during the real estate stuff that was going on in the last few years,’” Wyble said.

But Wyble said Kelley told him it had all been resolved. Technically, that was true. Kelley had confidentially settled a lawsuit filed against him by one of his former clients -- Old Republic Title.

Allegations and accusations

But as it would turn out there was much more to the story.

In September of 2012, Kelley’s Republican opponent for Washington State Auditor, James Watkins, rattled off a list of allegations and details contained in that Old Republic lawsuit on TVW’s “Inside Olympia” program.

“Misappropriation of funds, offshore accounts in Belize, even theft, suspicious fires, all sorts of weird stuff,” Watkins said.

Kelley immediately fired back accused Watkins of dirty politics.

“All the claims that are previously made are completely false,” Kelley said. “There’s no question about them, most of them are ridiculous.”

Campaign consultant John Wyble said at this moment in the campaign he had two questions. What is actually going on here? And what do we do about this?

Wyble said Kelley’s answer to that first question never changed, “‘I’ve done nothing wrong, I’ll be a great auditor.’”

As for the second question: what to do, Wyble advised Kelley to double down.

A big win and many questions

They hit the airwaves with TV ads to pump up Kelley’s positives. The bulk of the money for those ads came from Kelley himself. He self-financed most of his $700,000 campaign. On Election Day, Kelley won with 53 percent of the vote -- out performing even Jay Inslee, the Democratic candidate for governor.

But why would Kelley run for state auditor knowing that an audit of his past would raise a lot of questions and produce few answers? I put that question to Kelley’s attorney Mark Bartlett the day Kelley’s indictment became public.

“I think that’s a great question and I can tell you right now, Austin, I think that tells you more about what was in Troy Kelley’s mind than anything else,” Bartlett said. “He clearly didn’t think he’d done anything wrong. Because if he had thought he had done anything wrong, the last thing he would have done was run for office.”

Wyble tends to agree. He said that he thinks Kelley’s strength is also his Achilles heel.

“I just wonder if his exactness and his discipline is really what kind of got him in trouble,” Wyble said. “He focused too much on the specifics and didn’t focus on the overall picture.”

Kelley would not comment for this story. But in a 2006 letter to one of his clients, Kelley wrote: “As Abe Lincoln (& others) once said, all we have are our reputations.”

Now, Kelley’s reputation is being tested in a court of law and in the court of public opinion.

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."