Embattled state Auditor Troy Kelley has been invited to testify next week before the state Legislature about a federal investigation that an attorney says Kelley has been aware of since shortly after taking office.

Share story

OLYMPIA — In the unlikely event he wants it, embattled State Auditor Troy Kelley will have his chance to testify next week before the Legislature.

State Sen. Mark Miloscia, R-Federal Way, on Thursday invited Kelley — whose home was searched by federal agents and office served with a subpoena for what appears to be a criminal investigation related to his former business — to testify Wednesday before the Senate Accountability and Reform Committee.

Miloscia, a former Democrat who switched parties and won election last year to the Senate, was among the candidates running against Kelley in the 2012 election for state auditor.

“Your refusal to respond to these reports publicly has done little to ease these concerns and casts doubt on your leadership and management of the State Auditor’s Office and its function as the independent agency responsible for accountability,” wrote Miloscia in a Thursday statement.

Kelley, who returned to his office Monday after a vacation out of state, has not taken questions from the media. In a statement Monday, he acknowledged “the U.S. Attorney has questions about some financial activities related to my prior business.”

Kelley has known about that investigation for at least two years, said Scott Smith, an attorney for Old Republic National Title, which sued Kelley and his escrow-services business in 2010, alleging tax evasion and fraud — allegations that federal agents appear to be retracing in their current probe.

Smith said Thursday evening he notified Kelley in an April 2013 letter — just months after Kelley took office — that he’d received a federal subpoena for all documents related to the lawsuit. His comments about notifying Kelley were first reported Thursday afternoon by The (Tacoma) News Tribune and Northwest News Network.

“In a nutshell it said give us everything you’ve got,” Smith said of the subpoena. He said he turned over several file drawers of documents — including the terms of the confidential settlement in the lawsuit — and spoke with investigators several times, with the last contact coming in August.

Smith previously had declined to discuss whether he knew of a federal criminal investigation. He said he changed his mind after seeing other confirmations that an investigation had been under way for a long time, including a Seattle Times story this weekquoting Dee Lamb, a former employee of Kelley’s business, Post Closing Department. Lamb said she was first contacted by federal agents in 2012, then subpoenaed this year by a federal grand jury.

Kelley is avoiding interviews.

“I can assure you that all of my actions over the years have been lawful and appropriate,” Kelley said Monday in a written statement, adding he has “fully cooperated with their investigation.”

Doug Cochran, auditor’s office chief of staff, said Kelley “has yet to decide” whether to appear before the Senate committee.

Other functions in the near future are on his office schedule, which The Seattle Times obtained Thursday.

Kelley is to make remarks about cybersecurity April 21 at a Tacoma conference of the Washington Society of Certified Public Accountants (WSCPA).

“Auditor Troy Kelley is still invited and has indicated that he plans to attend,” wrote Jeanette Kebede, WSCPA spokeswoman.

Kelley’s calendar includes another meeting on cybersecurity April 7. Karina Shagren, spokeswoman for the state Department of the Military, said various elected officials will attend, as will companies such as Boeing and Microsoft.

Kelley’s calendar through the spring is fairly sparse, largely containing a handful of public events, Tuesday reminders for staff meetings and reminders of anniversaries and birthdays.

One such celebration not listed is the March birthday of Jason Jerue, the auditor employee who was the focus of the federal grand-jury subpoena issued this month to the auditor’s office.

Jerue, a part-time technical writer who lives in California and works remotely from there, also worked at Post Closing Department. The subpoena demanded Jerue’s hiring and personnel information from the auditor’s office, and emails pertaining to lawsuits involving Post Closing Department.