Embattled state Auditor Troy Kelley is urging a federal judge to allow him to keep his private attorney, Mark Bartlett, and reject prosecution concerns of a conflict of interest.
The attorney representing embattled state Auditor Troy Kelley on Friday denied providing advice to Kelley on how to spend nearly $1.4 million prosecutors allege is stolen money, and urged a judge not to disqualify him from the case.
In documents filed in U.S. District Court late Friday, defense attorney Mark Bartlett denied giving advice to Kelley on how he spent that money, including paying more than $900,000 to Barlett’s Seattle law firm, Davis Wright Tremaine, as a retainer.
An additional $447,421 was paid to the U.S. Treasury in hopes of satisfying some of the tax issues that are at the heart of a 10-count criminal indictment charging Kelley with theft and tax evasion in his past business dealings.
Kelley has pleaded not guilty.
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Prosecutors had argued that Bartlett might actually be a witness in the case and asked U.S. District Court Judge Robert Leighton to inquire into whether Bartlett has a conflict of interest and should be removed as Kelley’s lawyer.
In the response filed late Friday, Jeffrey Coopersmith, another lawyer from Bartlett’s firm, wrote the government’s call for a conflict inquiry is a “veiled” effort to have Bartlett taken off the case.
“The government offers a speculative conflict theory that relies on a central — but faulty — premise: that Mr. Bartlett ‘might’ have provided certain advice that ‘could’ lead him to being called as a defense witness.”
“Put simply, Mr. Bartlett never provided any such advice,” Coopersmith wrote.
Emily Langlie, a spokeswoman for the U.S. Attorney’s Office, said prosecutors were reviewing the filings but would not comment.
The pleadings contain a sworn declaration by Kelley, 50, who said he has consulted with another lawyer, and wants Bartlett to remain his attorney.
One of the government’s primary concerns, according to court pleadings, is that Kelley might attempt to put forth an “advice of counsel” defense at trial, claiming his actions were taken in good faith on the advice of his lawyers.
Kelley wrote in his declaration that he is willing to waive that defense to ensure Bartlett stays on board.
Prosecutors have been focusing on an account established by Kelley as he was closing down his real-estate reconveyance company, Post Closing Department, in 2008.
Kelley’s operation of that business from 2003 through 2008 is the focus of the indictment by a federal grand jury in April, accusing the Democratic auditor and former legislator of tax evasion, theft and lying in a civil deposition.
Kelley took an unpaid leave of absence May 1 to fight the criminal case. Gov. Jay Inslee and others have urged him to resign, but Kelley has refused.
In all, the government contends Kelley transferred nearly $3.6 million through a series of accounts, at least $1.4 million of it stolen from clients who were owed refunds on reconveyance fees paid to Post Closing.
Prosecutors allege Kelley has made conflicting statements about the money in the account, alleging at one point that it was still being held for refunds to Post Closing customers. Prosecutors allege his decision to write checks to his attorney and the IRS is evidence that it was stolen.
A conflict for Bartlett could arise, the motion claims, if Kelley says he wrote those checks on the advice of his lawyer.