By Rachel La Corte
The Associated Press
OLYMPIA — Gov. Jay Inslee continues to urge embattled state Auditor Troy Kelley to resign following his indictment by a federal grand jury.
A letter from the governor was emailed Thursday night and then hand-delivered to the Auditor’s Office on Friday, Inslee spokesman David Postman said.
Kelley pleaded not guilty to 10 felony counts Thursday.
The indictment charged him with filing false tax returns, attempting to obstruct a lawsuit and possessing more than $1 million in stolen property related to his former business.
Trial was set for June 8.
Inslee wrote that the indictment “makes it clear that you can no longer serve the citizens of Washington as state auditor.”
“You have now been indicted for the very type of conduct that your office is tasked with regulating; in turn, you have lost the public’s trust,” Inslee wrote.
Inslee said Kelley’s plan to take a leave of absence would be insufficient because the criminal proceedings will cloud the image of the office along with its reputation and ability to properly function.
Inslee is among several state leaders who have called for Kelley’s resignation.
Kelley has said he’ll take a temporary leave of absence beginning May 1 but is determined to fight back and keep his position.
Postman said the governor believes Kelley’s leave should be unpaid, and ways to accomplish that are being explored.
Kelley’s current salary is $116,950 a year.
“We don’t believe he should be in the job at all. If he stops coming to the job May 1, he should stop drawing a state salary,” Postman said.
Mark Firmani, a personal spokesman for Kelley, said he had not seen the letter from Inslee and did not yet have a response from the auditor to share.
At a news conference Thursday, Kelley insisted he did not break the law.
“And I want to be extremely clear here: I never, ever thought I was breaking the law, and I still do not to this day,” he said.
The 41-page indictment alleged various misdeeds by Kelley, a Democrat elected in 2012, in connection with mortgage title services companies that he previously ran.
Federal prosecutors said he kept more than $1 million that should have been refunded to customers and that he unlawfully avoided paying taxes by claiming personal or campaign expenses were business-related.
The most serious charge carries a possible sentence of up to 20 years in prison.
A felony conviction would automatically force Kelley from office, and some lawmakers spoke about the possibility of impeaching him in light of the charges alone.
“Every single person in the Capitol thinks he needs to resign, other than himself,” said Rep. Drew Stokesbary, a Republican from Auburn.
“He’s putting his own personal and financial interests above the interests of the people of this state.”
Kelley’s company, Post Closing Department, worked with escrow and mortgage title companies to track certain real estate transactions.
According to the indictment, it was supposed to collect up to $150 in advance as a fee for each transaction, keep $15 to $20 for its services, pay any government fees required and then refund whatever portion remained.
Instead, Kelley kept the money, the indictment said — an amount that totaled at least $3 million from 2006 to 2008.
