The Troy Kelley saga keeps on disappointing — on all sides. The rationale for Troy Kelley to remain in office as Washington state auditor is thinning. And the rationale to prosecute the Tacoma-area Democrat a second time on federal theft charges is also questionable.
Kelley’s first trial in U.S. District Court trial ended in acquittal in April on one charge that he lied to the Internal Revenue Service. The jury was split or hung on the remaining counts, which included theft, tax evasion and money laundering.
Federal prosecutors decided this week to try Kelley a second time on charges stemming from his allegedly illegal pocketing of $3 million from real estate transactions at a company he owned a decade ago.
Kelley was elected auditor in 2012 and wisely chose not to seek re-election this fall.
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Kelley’s lawyers had argued that the court should acquit Kelley of the other charges, but federal prosecutors decided to take the case to trial one more time.
Given how unconvinced jurors were that funds were ever stolen, that may prove to be a costly and fruitless move.
The first trial lasted five weeks. Barring the emergence of new evidence, which prosecutors have not revealed, it’s hard to see a new trial going more quickly, more cheaply or ending in a different result.
Jury foreman Mike Lowey told the judge after trial that most jurors were leaning toward acquitting Kelley on the theft charge.
At issue all along was Kelley’s businesses practices while running Post Closing Department, which tracked paperwork on real estate transactions during the mid-2000s. That was before Kelley ran for the state House and later auditor.
In a nutshell, prosecutors said Kelley promised to collect $100 to $150 for each real estate transaction his firm tracked; it would keep $15 or $20 for itself, use some of the funds for fees such as recording of transactions, and refund the remaining money to homeowners.
But Kelley retained money from tens of thousands of cases in which additional fees were not required. In a few cases where title companies asked questions or homeowners demanded refunds, Kelley did so.
Kelley’s lawyers pointed out at trial that Old Republic Title, which had sued Kelley, gave homeowners only a fraction of the $1 million it won from Kelley. Prosecutors countered that Old Republic had nearly $1 million in legal fees and yet still was able to pay home buyers some funds.
But the arguments helped create an impression that Kelley’s practices, while maybe questionable, were not completely out of line with the industry’s practice.
Unfortunately for Kelley, the costly trial leaves him with lawyer bills and a sullied reputation that he once hoped to restore with acquittal at trial.
Absent that acquittal, a cloud remains.
Kelley did little to restore public faith in his judgment when — right after the trial — he summarily fired three staffers, including his two top communications officers. After Gov. Jay Inslee asked for an explanation, Kelley wrote back telling him to butt out and tend to his own bureaucratic failures.
Kelley did say in his letter to the governor that he’d lost confidence in his “executive messaging team.”
But what messaging team could ever make Kelley look good?
As auditor, Kelley serves in a public office that performs audits on public agencies. It is a role for which accountability and transparency are all important.
The Auditor’s Office carried on just fine under Deputy Auditor Jan Jutte during Kelley’s leave of absence last year.
The agency won’t miss Kelley if he finally steps down.