- Associated Press - Friday, May 6, 2016

SEATTLE (AP) - Indicted Washington State Auditor Troy Kelley has fired three staffers since his federal fraud trial ended with a hung jury last week.

Kelley this week demanded the resignations of his chief of staff, Doug Cochran, and deputy communications director Adam Wilson. Both told The Associated Press they were surprised and that Kelley gave no explanation for the firings.

Kelley also ordered that Thomas Shapley, a part-time special assistant to deputy state auditor Jan Jutte, stop working pending his planned retirement at the end of this month.

Jutte ran the office while Kelley took seven months of unpaid leave last year to fight the allegations against him. The firings came while she was on vacation this week.

“I don’t know what’s going on,” she said. “I have a lot of staff who are living in fear, asking what they should do, and I don’t have any advice for them.”

In an email Friday, Kelley declined to comment. It was not clear if he intended to immediately appoint anyone else to handle the duties of the fired staffers.

Last week, after deliberating for several days, a federal jury in Tacoma failed to reach a verdict on 14 of 15 charges against Kelley, which included possession of stolen property and money laundering. Prosecutors accused Kelley of pocketing $3 million in fees he should have refunded to homeowners when he ran a real-estate services business a decade ago.

Kelley’s lawyers insisted he was entitled to keep the money. The jury acquitted him on one count of lying to the IRS. The other charges remain in effect, though the U.S. Attorney’s Office in Seattle has not said whether it plans to retry him.

Gov. Jay Inslee said Friday he was deeply concerned by the firings and sent Kelley a letter seeking an explanation.

“During his extended absence due to his trial, the hardworking Auditor’s Office staff worked diligently to maintain high standards, fulfill the mission of the Auditor’s Office and serve the people of the state of Washington,” Inslee said in a written statement.

Cochran, 61, has served in the auditor’s office for 11 years, following 27 years in other government roles, including as the elected auditor in Yakima County. He said Kelley met with him on Tuesday.

“He wanted my resignation and he got it,” Cochran said. “When we were done, I just out of curiosity asked why. All he said was, ‘For the good of the organization.’”

Cochran said he was somewhat surprised Kelley had kept him on as chief of staff in 2013, and that he and Kelley never really saw eye-to-eye. Cochran was planning to retire early next year, with the next auditor’s administration.

Wilson, 38, a former reporter for The Olympian newspaper, was hired in the auditor’s office in 2013. He became communications manager the next year, responsible for social media as well as reviewing significant state and local audits. Last December, when Kelley returned from leave and Shapley switched from deputy communications director to a part-time role reporting to Jutte, Wilson stepped into Shapley’s former role.

On Thursday, Kelley asked to speak with Wilson at the agency’s office in Tumwater.

“He said, ‘I’m asking for your resignation.’ I said, ‘Why?’” Wilson said Friday. “He said, ‘I think you know why.’ I said, ‘No, Troy, I don’t.’

“He said, ‘I think the executive and communications need to work together. You can either resign, effective immediately, or I can fire you.’”

Wilson has two young children and is about to get married. After others in the office intervened on his behalf, Kelley agreed to allow him to remain on paid leave through the end of the month, and to take a personal day on June 1, which will allow him to keep his health care through the end of June, Wilson and Jutte said.

Shapley handled press calls about the federal investigation of Kelley as it was unfolding last year, but eventually said he would no longer answer questions on Kelley’s behalf, and would only answer questions related to the work of the auditor’s office.

He described himself, Wilson and Cochran as “three executive-level folks who, I would argue, worked very hard to maintain the integrity and credibility of the office for the past year.”

“We worked very well with Jan Jutte during Troy’s absence,” Shapley said. “With her excellent guidance and leadership, we were able to keep the agency operating. So I don’t know. I guess it’s just being associated with that time period when he wasn’t there.”

Kelley, a Tacoma Democrat, was elected in 2012 as the state official charged with rooting out waste and fraud in government. He is in the final year of his term and has said he will not seek re-election.


AP Correspondent Rachel La Corte contributed from Olympia.

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