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Feds Subpoena Documents From Washington Auditor's Office

Thursday, 19 March 2015 09:01 PM

The office of Washington state auditor Troy Kelley turned over documents to the federal government Thursday in response to a subpoena from the U.S. Department of Justice, just days after federal agents searched his home.

Auditor spokesman Thomas Shapley said the documents were in response to a March 6 subpoena, but he had not seen the subpoena or the documents.

The latest development comes after agents with the U.S. Department of Treasury spent about five hours searching Kelley's home early this week. He is out of state on vacation and issued a statement saying he had no knowledge of any investigation.

Shapley said that Kelley's vacation plans were in California, and that he is not aware of any plans for him to return to the state early. His schedule indicates he'll be back in the office on Monday, Shapley said.

The U.S. attorney's office in Seattle has declined to confirm or deny any investigation, and IRS officials declined to comment.

Gov. Jay Inslee hasn't spoken to Kelley, and he only learned of the raid through news reports, spokesman David Postman said Thursday. "We are certainly going to be monitoring this," Postman said.

Beyond a three-sentence written statement issued Wednesday night, Kelley has not responded to requests for interviews. In that statement, Kelley said: "I have not been served a search warrant and have not been informed of any reasons for a search."

Tacoma police spokeswoman Loretta Cool told The Associated Press on Wednesday night that her department was notified in advance of the search, but that she had no information about the nature of the search. Cool said federal agents typically notify local police when they operate in their jurisdiction.

By Thursday evening, no documents had been publicly filed in federal court related to any investigation involving Kelley or his address. The auditor's office wouldn't release the subpoena Thursday, and a spokesman for the state attorney general's office, which represents state agencies, said that the office's attorneys were looking into the details of releasing it.

Former auditor Brian Sonntag, who served as auditor for two decades before retiring in 2012, said he heard of the raid half a day before everyone else through friends of neighbors of Kelley. Sonntag said his first thought was about the employees at the agency.

"I expect and hope they're able to stay focused. They have very important work to do," he said. "I'm sure this came like a bolt out of the blue for all of those people who work in the state auditor's office across the state."

Sonntag said that for an office like the auditor — which is tasked with rooting out fraud and misuse of public funds — the news of the search "does create a cloud."

"The whole thing is going to hinge on that public trust and confidence," he said. "That public trust is pretty fragile sometimes."

Kelley, a Democrat, was elected auditor in 2012. He previously served in the state Legislature.

During a contentious campaign for auditor, details about civil lawsuits involving Kelley emerged, including a federal case brought by Old Republic Title, a former business customer of an escrow-services business owned by Kelley. The company claimed Kelley fraudulently transferred funds, evading taxes and hiding millions from creditors. That case was ultimately settled.

The state Republican Party on Thursday called on Kelley to step down until cleared of any potential allegations.

Republican Senate Majority Leader Mark Schoesler stopped short of saying that Kelley needed to resign, but said that he needs to explain why his personal files are being reviewed and also should disclose the terms of the settlement agreement with Old Republic.

"The auditor is supposed to be our statewide official fighting against fraud, waste and abuse," Schoesler said. "The most important thing is for him to come clean for the public trust. Let's see what the facts are and what his future should be."


Associated Press writer Gene Johnson in Seattle contributed to this report.

© Copyright 2018 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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The office of Washington state auditor Troy Kelley turned over documents to the federal government Thursday in response to a subpoena from the U.S. Department of Justice, just days after federal agents searched his home.
subpoena, documents, washington, auditor
Thursday, 19 March 2015 09:01 PM
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