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Troy Kelley Returns To Washington State Auditor's Office

Austin Jenkins
Northwest News Network
Indicted Washington State Auditor Troy Kelley abruptly returned to office Tuesday, ending a seven month leave of absence pending his federal trial.

Indicted Washington State Auditor Troy Kelley returned to work on Tuesday, abruptly ending a seven month self-imposed leave of office.

The surprise move followed an announcement Monday by a bipartisan group of House lawmakers that they intend to seek Kelley's impeachment in January for abandoning his office.

"I have ended my leave of absence and returned to work in Olympia as State Auditor today," Kelley wrote in a message to staff of the auditor's office. "I want you to know that I value all of the work you do. I also want you to know I will continue to perform the job the people of Washington have elected me to do."

Kelley said he took a leave of office in May because it struck a "fair balance." But he noted other indicted public officials have not taken a leave, such as U.S. Senator Robert Menendez of New Jersey. Prompted by the impeachment effort, Kelley said he and his wife decided that he should return to work.

"If the Legislature would rather have me continue working as State Auditor as I fight these unfair charges, I'm prepared and willing to do so," Kelley wrote in a statement to reporters.

The four lawmakers pursuing impeachment, two Democrats and two Republicans, say the effort to oust Kelley from office can still go forward based on the fact Kelley was absent from office for several months.

"His return does not change [that] fact," said Republican state Representative Drew MacEwen, one of the sponsors of the impeachment resolution. However, it's not clear if the impeachment effort has the support of House leadership or will have the necessary votes to proceed when lawmakers reconvene in Olympia in January.

Kelley faces a federal trial in March on charges that include possession of stolen funds, making false statements and filing false tax returns. The charges stem from Kelley's past work in the real estate services business. The first-term Democrat has pleaded not guilty.


Kelley's return to work comes as a stunning development in a public saga that begin in March when federal agents searched his Tacoma home. That was followed by a grand jury indictment the following month.

Last week Kelley's attorney, Angelo Calfo, put the feds' case to the test during a three day hearing in federal court. Kelley is accused of not refunding homeowners' excess fees that were collected at closing. After that hearing Calfo issued a statement that said, "the grand jury was led to believe that homebuyers had an absolute legal right to refunds--something the hearing showed wasn't true."

When Kelley began his leave of absence from the auditor's office in May he put his director of operations, Jan Jutte, in charge. He also said he intended to return to office vindicated following his trial.

Kelley has ignored repeated calls by Governor Jay Inslee and others for him to resign. Inslee spokeswoman Jaime Smith wrote in a statement that Kelley's return to office is troubling and that Jutte's work has been "outstanding."

"Kelley’s reappearance is likely to disrupt the very important work she and her team are doing," Smith wrote. "The Office of the Auditor provides essential accountability and watchdog functions for state government and should remain free from the distractions and drama of Troy Kelley’s legal challenges."

Regrets But No Resignation

Smith reiterated that Inslee urges Kelley to step down. But Kelley says he won't resign "based on unproven, public accusations alone." At the same time, he also indicated he has no plan to run for re-election in 2016 regardless of the outcome of his trial. In an interview Kelley expressed regret at having run for office in the first place.

"In retrospect, I would not have run for auditor," Kelley said. "I probably wouldn't have run for House of Representatives ... It's just too hard on the family, too hard on my kids." Kelley has a wife and two sons.

Earlier this year, Kelley withstood a citizen-led effort to recall him from office. Attorney General Bob Ferguson is currently investigating Kelley's hiring of a former business associate to work part-time from California for the State Auditor's Office. Ferguson, a Democrat, has also called on Kelley to resign.

In a statement released to reporters Kelley said Ferguson has a conflict of interest and should appoint an independent lawyer to handle matters related to Kelley.

In response, the Attorney General's office said it "strongly disagrees" with Kelley's characterization. "The office of the Attorney General upholds the highest ethical standards and provides its clients with excellent legal advice," said the statement. It continued, "As a matter of course, where appropriate, the office puts ethical screens in place to avoid conflicts."