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Troy Kelley

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Troy Kelley
Image of Troy Kelley

Democratic Party

Prior offices
Washington House of Representatives District 28-Position 1
Washington State Auditor
Successor: Pat McCarthy

Education

Bachelor's

University of California, Berkeley

Graduate

State University of New York, Buffalo School of Management

Law

State University of New York, Buffalo School of Law

Military

Service / branch

U.S. Military National Guard

Personal
Profession
Attorney
Contact

Personal website

Troy Kelley is a former Democratic Washington state auditor. He was first elected in 2012 and sworn in on January 16, 2013. Kelley took a leave of absence from May 4, 2015 to December 8, 2015, after being the subject of a criminal investigation.

Kelley was the subject of a federal grand jury investigation related to his work with a company called Post Closing Department. He was indicted on 15 charges and announced a leave of absence effective May 4, 2015; however he returned to work in December 2015 despite objections from state officials. His trial began on March 14, 2016.[1]

On April 26, 2016, a federal jury acquitted Kelley on one of the 15 counts against him and announced that they could not agree on verdicts for the other 14 counts. Kelley did not seek re-election in 2016.[2]

Learn more about the case and indictment by clicking here.

Prior to becoming state auditor, Kelley served three terms as a member of the Washington House of Representatives, representing District 28-Position 1 from 2007 to 2013.

Biography

Kelley has served as a lieutenant colonel in the Washington National Guard. He led regulatory audit teams for the Securities and Exchange Commission and worked as a federal prosecutor for the U.S. Department of Justice. He was previously a professor and associate editor for the Military Law Review at the Judge Advocate Generals School.[3][4]

Kelley holds a J.D. from the State University of New York-Buffalo School of Law. He also holds an MBA from the State University of New York-Buffalo School of Management and a B.A. in political science from the University of California, Berkeley.[3]

Political career

Washington State Auditor (2013-2017)

Kelley was sworn in as state auditor on January 16, 2013. He succeeded fellow Democrat Brian Sonntag. Kelley took a leave of absence starting on May 5, 2015, with Jan Jutte assuming his duties on an interim basis. Kelley did not seek re-election in 2016.

Federal investigation and trial

Kelley and department employee Jason JeRue became entangled in a federal grand jury investigation into past business dealings in March 2015. A subpoena issued by the jury on March 5, 2015 sought emails between Kelley and JeRue related to Post Closing Department, an escrow firm previously owned by Kelley accused of withholding $1.2 million in refunds from a former client. Kelley denied any connection to the firm's actions and agreed to a settlement to resolve the case in 2011.

Federal treasury agents searched Kelley's home as part of the investigation on March 16, 2015. Gov. Jay Inslee (D) called on Kelley to recuse himself from official duties dealing with the case but did not ask for his resignation. State Sen. Mark Miloscia (R) asked for greater transparency, saying, "The people and voters of this state deserve an explanation so we can understand the reason for these events and be able to make our own decisions about what it means or choose to investigate further. This must happen very quickly if we’re going to keep public trust in our government."[5] On May 4, JeRue was fired from the agency after several weeks of unpaid leave.[6]

Kelley's office handed over 53 emails from his office email account sent between January 1 and March 19, though none of these emails involved JeRue. State Rep. Dan Kristiansen (R) expressed skepticism that Kelley and JeRue had not maintained contact given their longstanding friendship, saying, "You'd think there would be communiques they exchange in the course of operations, the way we all live now." Kelley and JeRue met in the late 1990s and the auditor hired JeRue as a part-time technical writer following his election in 2012.[7]

Grand jury indictment
See the full text of the indictment here

On April 16, 2015, the federal grand jury indicted Kelley on 10 charges including possession of stolen property, four counts of false declaration and attempted obstruction of civil lawsuit related to his tenure as owner of Post Closing Department. The indictment also concluded that Kelley hid $2,581,653 in funds from the Internal Revenue Service. Kelley pleaded not guilty to the charges but announced in a statement that he would take a leave of absence on May 1 to mount his legal defense.[8] Kelley ultimately took his unpaid leave from office starting May 4, 2015; however he returned to work in December 2015 despite objections from state officials.[1][9] Gov. Inslee made the following statement after announcement of the indictment:

“

This indictment today makes it clear to me that Troy Kelley cannot continue as state auditor. He should resign immediately. An appointee can restore confidence in the office and assure the public that the Office of the State Auditor will operate at the high standards required of the post. [10]

”
—The Seattle Times, (2015)

[8]


Federal trial

Kelley's federal trial began with jury selection on Monday, March 14, 2016 with U.S. District Judge Ronald Leighton presiding.[1]

Court filings prior to the trial showed that Kelley's former employee Jason JeRue was slated to testify on behalf of prosecution in exchange for immunity. However, Kelley's attorneys casted aspersions on JeRue's credibility and asserted that Kelley was being unfairly targeted as an elected official.[11] JeRue went on to testify as planned.

On April 26, 2016, a federal jury acquitted Kelley on one of the 15 counts against him and announced that they could not agree on verdicts for the other 14 counts. He would have faced up to 20 years in prison if found guilty.[1][2] Gov. Inslee said after the verdict that he would wait to see what prosecutors decided to do in the wake of the deadlocked jury. Inslee added that "regardless of the outcome in court today, serious questions remain about Troy Kelley's ability to successfully fulfill his role as state auditor."[12]

Federal prosecutors announced at a court hearing on May 31, 2016, that they would seek to re-try Kelley on the 14 charges on which the jury deadlocked and asked Judge Leighton to set a new trial date. "We believe it is in the interest of justice to seek final judgment on all counts in the indictment," commented U.S. Attorney Annette L. Hayes.[13] A new trial date was set for March 13, 2017.[14]

Kelley's defense attorney stated that she had filed for acquittal or dismissal of the case and planned to appeal if Judge Leighton rules against it.[15] On June 17, 2016, Judge Leighton denied a motion to dismiss eight theft charges against Kelley. He also issued an order for a hearing to hear arguments for Kelley's motion to dismiss six additional tax-related charges; no hearing date was set.[16]

In September 2016, Kelley's attorney argued that six tax-related charges should be thrown out since a federal jury previously acquitted Kelley on one count of lying to the Internal Revenue Service. The defense claimed that re-trying Kelley on the six tax-related charges would amount to double jeopardy. On September 9, 2016, a federal judge declined the defense's request and Kelley's attorney appealed to the Ninth Circuit Court of Appeals. On December 13, 2016, a three-judge panel of the Ninth Circuit Court of Appeals declined to hear the appeal.[17][18]

Convicted of possession of stolen property, tax fraud, and false statements

In 2017, Troy Kelley (D) was convicted with possession of stolen property, tax fraud and making false statements. He appealed his case, but it was denied a petition for review from the United States Supreme Court. On July 1, 2021, Kelley reported to prison in California to serve a 366 day sentence.[19]

Responses from state officials

Calls for resignation

Within 24 hours of Kelley's indictment, high-ranking officials called for his resignation including Attorney General Bob Ferguson (D), State Treasurer Jim McIntire (D), Secretary of State Kim Wyman (R) and the state Democratic Party. These calls for resignation are due in part to the difficulty of impeaching or recalling a statewide official. The state constitution allows for impeachment of state executive officials with a majority of the Washington House of Representatives and two-thirds of the Washington State Senate based on charges of high crimes, misdemeanors or malfeasance. A conviction on a felony charge qualifying as a high crime or misdemeanor would lead to Kelley's resignation. The malfeasance clause only deals with actions taken in office while the federal indictment covers Kelley's pre-election career.[20]

Kelley stated that he would not run for re-election in the 2016 election.[21][2] If he were to resign, Inslee would appoint a replacement to serve until the end of his term in January 2017. Kelley would be forced by state law to resign office if he is convicted of a felony.[8][22]

State legislators propose "leave of absence" appointment rule

State Reps. Drew Stokesbary (R) and Drew MacEwen (R) introduced House Bill 2249 on April 28, in hopes of expanding the governor's power to replace absent elected officials. HB 2249 would allow the governor to appoint a full-time replacement for any elected official who has taken a leave of absence unrelated to medical issues or military duties. This proposal would expand appointment powers beyond the high crimes, misdemeanor or malfeasance requirements for replacement.[23]

Recall effort

See also: State Auditor recall, Washington (2015)

Former state legislator Will Knedlik filed paperwork with the secretary of state's office on April 3, 2015, to remove Kelley from office in response to the federal investigation of Kelley's past business dealings.[24] A May 8 court hearing determined that the petition did not meet the legal requirements for a recall.[25] A State Supreme Court hearing in March 2016 upheld the ruling.[21]

State House (2007-2013)

Committee assignments

2011-2012

In the 2011-2012 legislative session, Kelley served on the following committees:

2009-2010

In the 2009-2010 legislative session, Kelley served on the following committees:

Elections

2016

See also: Washington Auditor election, 2016

Kelley announced that he would not run for re-election in 2016.[26]

2012

See also: Washington down ballot state executive elections, 2012

Kelley won election as Washington State Auditor in 2012.[27] He faced fellow state representative Mark Miloscia (D), State Senator Craig Pridemore (D) and James Watkins (R) in the blanket primary on August 7. Kelly and Watkins moved on to the general election.[28][29] Kelley defeated Watkins in the general election on November 6, 2012.

Washington State Auditor General Election, 2012
Party Candidate Vote % Votes
     Democratic Green check mark transparent.pngTroy Kelley 52.9% 1,512,620
     Republican James Watkins 47.1% 1,344,137
Total Votes 2,856,757
Election results via Washington Secretary of State


Primary
Washington Auditor, Primary, 2012
Party Candidate Vote % Votes
     Republican Green check mark transparent.pngJames Watkins 46.1% 584,444
     Democratic Green check mark transparent.pngTroy Kelley 23% 291,335
     Democratic Craig Pridemore 21.2% 268,220
     Democratic Mark Miloscia 9.8% 123,936
Total Votes 1,267,935
Election results via Washington Secretary of State (dead link)'


Endorsements

Troy Kelley was endorsed by:

  • The Seattle Times[30]
  • The Stranger[31]
  • Washington State Council of Firefighters[32]
  • Public School Employees of Washington[32]
  • Washington Education Association[32]
  • Fraternal Order of Police[33]
  • American Federation of Teachers[32]
  • SEIU 775[32]
  • SEIU 1199[32]
  • SEIU 925[32]
  • Equal Rights Washington[32]
  • Teamsters' Joint Council #23[32]
  • Fuse Washington[32]

Lawsuit

During his 2012 campaign for state auditor, Kelley's opponent James Watkins published court documents from lawsuits Kelley was involved in. The records were posted on a website which was set up by the Watkins campaign to discredit Kelley.[30] In 2010, Watkins employed the same strategy during his unsuccessful congressional campaign against 2012 gubernatorial candidate Jay Inslee, the website then titled factcheckjayinslee.com. Watkins' argument that Kelley was ethically unfit for the state auditor job, as exhibited on the website and in a September 27th endorsement interview with The Seattle Times (the Times endorsed Kelley for the general election)[34] was a lawsuit from 2010 wherein one of Kelley's former clients, a title insurance group called Old Republic Title which hired Kelley’s firm "to handle some of the back-end mechanics of closing a real estate transaction," accused Kelley of misappropriating roughly $1.2 million in customer fees. The Times called Watkins tactics "mean-spirited" and endorsed Kelley because of concerns on how Watkins would run an office handling sensitive information about public agencies.[35] The lawsuit was filed for a "breach of contract." No criminal charges were ever filed.[36][37][38] During the deposition, attorney for the plaintiffs Scott Smith brought up a series of wire transfers to that Kelley had authorized in 2008. Financial records obtained by subpoena revealed that Kelley held an offshore account in Belize, to which Kelley had linked an account. This account was closed after existing for about a year, and only maintained the minimum balance (less than $5,000). Kelley stated that California tax attorney Alan Eber, whom he hired for estate planning services, was responsible for the account in Belize. Kelley said that when he discovered the existence of the offshore account, he closed it, although his signature appears on international wire paperwork establishing the link to the Belize account. Kelley defended that the Old Republic case, which was settled for an undisclosed amount, as a routine, "nuisance lawsuits," an occupational hazard of handling property funds compounded by the mortgage crisis.[34] “All of my accounting and estate planning decisions ... have been fully compliant with the law. Any assertion or implication to the contrary is simply incorrect.”[37]

2010

See also: Washington State House of Representatives elections, 2010

Troy Kelley was re-elected to the Washington House of Representatives District 28-Position 1. He was unopposed in the August 17, 2010, primary. He defeated Republican Steve O'Ban in the November 2, 2010, general election.[39]

Washington House of Representatives, District 28-Position 1 General Election (2010)
Candidates Votes
Green check mark transparent.png Troy Kelley (D) 21,347
Steve O'Ban (R) 19,026
Washington House of Representatives, District 28-Position 1 Primary (2010)
Candidates Votes Percent
Green check mark transparent.png Troy Kelley (D) 12,056 50.26%
Green check mark transparent.png Steve O'Ban (R) 11,932 49.74%

2008

On November 4, 2008, Democrat Troy Kelley won re-election to the Washington House of Representatives, District 28-Position 1 receiving 60.2 percent of the vote (28,591 votes), defeating Republican Dave Dooley who received 39.8 percent of the vote (18,906 votes).[40]

Washington House of Representatives, District 28-Position 1 (2008)
Candidates Votes Percent
Green check mark transparent.png Troy Kelley (D) 28,591 60.20%
Dave Dooley (R) 18,906 39.80%

Campaign finance summary

Note: The finance data shown here comes from the disclosures required of candidates and parties. Depending on the election or state, this may represent only a portion of all the funds spent on their behalf. Satellite spending groups may or may not have expended funds related to the candidate or politician on whose page you are reading this disclaimer. Campaign finance data from elections may be incomplete. For elections to federal offices, complete data can be found at the FEC website. Click here for more on federal campaign finance law and here for more on state campaign finance law.

Troy Kelley campaign contribution history
YearOfficeStatusContributionsExpenditures
2012Washington AuditorWon $711,666 N/A**
2010Washington House of Representatives District 28-Position 1Won $180,633 N/A**
2008Washington House of Representatives District 28-Position 1Won $189,340 N/A**
2006Washington House of Representatives District 28-Position 1Won $305,599 N/A**
Grand total$1,387,238 N/A**
Sources: OpenSecrets,  Federal Elections Commission ***This product uses the openFEC API but is not endorsed or certified by the Federal Election Commission (FEC).
** Data on expenditures is not available for this election cycle
Note: Totals above reflect only available data.

Scorecards

Freedom Foundation

2012

See also: Washington Freedom Foundation Legislative Scorecard (2012)

The Freedom Foundation, a Washington State-based research and educational organization committed to the principles of individual liberty, free enterprise, and limited, accountable government, issued its 2012 Informed Voter Guide for Washington State voters, including a legislative score card documenting how Washington State legislators voted upon bills the Foundation deemed important legislation.[41] The legislation chosen by the Foundation covered budget, taxation, and pension issues. The guide also included a compilation and ranking of all tax and fee increases proposed by each Senate and House members' proposed legislation, as required by Washington law.[42]

The Foundation's research guide provided a collection of nonpartisan information involving the voting records of state legislators on key issues related to the budget, taxation, and pension reform. Such legislation included:

  • Bill 6636 (Balanced budgets): The bill would have required a balanced budget plan to be achieved within four years. The House bill, which became law, required a balanced budget as long as the spending was not 4.5% larger than the previous year's budget, regardless of revenue intake.
  • Bill 5967 (Senate Republican and House Democrats budgets): The Senate version of the bill would have reduced spending and keep a $501 million reserve, but with a skipped $143 million payment to the state's pension fund. A House version of the bill would have postponed a payment to public schools and leave less for the state's reserves. The bill did not become law, although a compromise bill eventually did.
  • Bill 6582 (Local Transportation Tax Increases): This bill doubles the "car tab" fee that most cities can impose on vehicle owners, from $20 to $40. It also allows counties to impose a motor vehicle excise tax (this requires a vote of the people), changes the limit on local gas taxes in a way that slightly reduces the top rate, and allows Seattle to impose an additional gas tax (this would also require a public vote). The bill became law.
  • Bill 6378 (Pension reforms): The bill, introduced by Sen. Joseph Zarelli would have closed older, more expensive state pension plans for new hires and have new state employees join a newer pension plan. Also included in the bill is a mandatory reduction in pension payouts to those employees who take early retirement, based on the cost to the pension fund. The Senate voted upon the bill, along with a House vote on an amended version of the bill that did not include as much cost saving but eventually became law.

A Approveda sign indicates a bill more in line with the Foundation's stated goals, and a Defeatedd sign indicates a bill out of step with the Foundation's values. Here's how Kelley voted on the specific pieces of legislation:

2012 House Scorecard - Troy Kelley
Bill #6636 (Balanced budget requirement)Approveda Bill #5967 (House Democrats budget)Defeatedd Bill #6582 (Local transportation tax increases)Defeatedd Bill #6378 (Pension reforms)Approveda
Y Y N Y

Personal

Note: Please contact us if the personal information below requires an update.

Kelley and his wife, Diane, have two children.[4]

Recent news

The link below is to the most recent stories in a Google news search for the terms Troy Kelley Washington State Auditor. These results are automatically generated from Google. Ballotpedia does not curate or endorse these articles.

Troy Kelley - Google News

See also

External links

Footnotes

  1. ↑ 1.0 1.1 1.2 1.3 The Seattle Times, "Federal trial starts Monday for indicted State Auditor Troy Kelley," March 12, 2016
  2. ↑ 2.0 2.1 2.2 Seattle Times, "State Auditor Troy Kelley acquitted of one charge; jury cannot agree on 14 others," accessed April 27, 2016
  3. ↑ 3.0 3.1 Project Vote Smart - Rep. Kelley
  4. ↑ 4.0 4.1 Washington State Auditor's Office: "About Troy Kelley," accessed November 11, 2013
  5. ↑ Q13 Fox, "Federal subpoena of State Auditor Troy Kelley’s office seeks records of employee," March 20, 2015
  6. ↑ KREM, "Employee with ties to investigation of WA auditor fire," May 4, 2015
  7. ↑ Greenfield Reporter, "State: No emails between Auditor Troy Kelley and employee who is longtime associate," April 2, 2015
  8. ↑ 8.0 8.1 8.2 The Seattle Times, "Auditor Troy Kelley indicted by feds, pleads not guilty," April 16, 2015
  9. ↑ SFGate, "Auditor Troy Kelley says unpaid leave will start Monday," April 28, 2015
  10. ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
  11. ↑ The Seattle Times, "Ex-employee Jason JeRue expected to testify in trial of Auditor Troy Kelley," March 13, 2016
  12. ↑ ABC News, "The Latest: Governor Awaiting Next Move in Auditor Case," accessed April 27, 2016
  13. ↑ Seattle PI, "Feds want new trial of 14 charges against State Auditor Troy Kelley," May 31, 2016
  14. ↑ AP, "Washington auditor to face another fraud trial," May 31, 2016
  15. ↑ Oregon Live, "Washington Auditor Troy Kelley to be retried for fraud," May 31, 2016
  16. ↑ The News Tribune, Judge orders hearing to decide whether to dismiss 6 charges against Auditor Troy Kelley," June 28, 2016
  17. ↑ NW News Network, "9th Circuit Declines To Hear Troy Kelley's Double Jeopardy Claim," December 13, 2016
  18. ↑ NW News Network, "Judge Denies Double Jeopardy Motion In Troy Kelley Case," September 9, 2016
  19. ↑ ‘’King 5’’, “Former Washington State Auditor Troy Kelley reports to prison in California,” June 30, 2021
  20. ↑ The Spokesman-Review, "Spin Control: Ousting state auditor Troy Kelley may be difficult," April 19, 2015
  21. ↑ 21.0 21.1 The News Tribune, "No recall for Auditor Troy Kelley," March 3, 2016
  22. ↑ Washington State Legislature, "RCW 42.12.040 Vacancy in partisan elective office — Successor elected — When," accessed April 16, 2015
  23. ↑ KREM, "Wash. lawmakers intro bill in response to Auditor's leave," April 28, 2015
  24. ↑ Peninsula Daily Times, "Former legislator files recall papers on Washington state auditor," April 4, 2015
  25. ↑ Reuters, "Judge blocks recall attempt against indicted Washington state auditor," May 8, 2015
  26. ↑ Seattle Times, "State Auditor Troy Kelley acquitted of one charge; jury cannot agree on 14 others," accessed April 29, 2016
  27. ↑ Lakewood Patch, "Troy Kelley to Run For State Auditor," April 12, 2012
  28. ↑ Washington Secretary of State, "2012 primary candidates," accessed May 18, 2012
  29. ↑ Washington Secretary of State, "August 07, 2012 Primary Results," accessed August 9, 2012
  30. ↑ 30.0 30.1 "Seattle Times Editorial," "Seattle Times Endorses Troy Kelley for Auditor," October 14, 2012
  31. ↑ "The Stranger's Endorsements," October 16, 2012
  32. ↑ 32.0 32.1 32.2 32.3 32.4 32.5 32.6 32.7 32.8 32.9 "Progressive Voter's Guide," accessed October 26, 2012
  33. ↑ "Troy Kelley's Homepage," accessed 10/26/2012
  34. ↑ 34.0 34.1 The Seattle Times, "Watkins, Kelley trade personal attacks in animated endorsement interview," September 27, 2012
  35. ↑ The Seattle Times, In blistering campaign for auditor, Troy Kelley has the edge, October 14, 2012
  36. ↑ Fact check Troy Kelley, "DECLARATION OF SCOTT A. SMITH RE: KELLEY'S SUMMARY JUDGMENT MOTION AND OLD REPUBLIC'S CROSS-MOTION FOR SUMMARY JUDGMENT," Filed March 28, 2011
  37. ↑ 37.0 37.1 KPLU.org NPR news, "Wash. state auditor candidate wired millions, linked account to Belize," accessed October 10, 2012
  38. ↑ Old Republic National Title Insurance Company: "About Us," accessed November 11, 2013
  39. ↑ Washington Legislature Official primary results SOS
  40. ↑ Washington State Election Results
  41. ↑ Freedom Foundation, "Legislative Voting Record," accessed October 10, 2013
  42. ↑ Freedom Foundation, "Big Spender List," accessed October 10, 2013
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Preceded by
Brian Sonntag (D) 		Washington Auditor
2013-2017 		Succeeded by
Pat McCarthy (D)
Preceded by
- 		Washington House of Representatives District 28-Position 1
2007–2013 		Succeeded by
Steve O'Ban (R)
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