State: No emails between auditor, employee who is old friend

AP News
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Posted: Apr 02, 2015 9:10 PM

SEATTLE (AP) — The Washington State Auditor's Office said Thursday it hasn't turned up any emails or text messages between Auditor Troy Kelley, who is being investigated by federal agents, and an employee who is a longtime associate and a key figure in the scandal.

It's unknown whether Kelley used personal email accounts or devices to conduct official business, but the revelation that Kelley hadn't had any official contact with Jason JeRue, with whom he has long business, legal and personal ties, was surprising. Kelley's spokesman wouldn't immediately address the issue of whether Kelley used other accounts as auditor.

Public officials' use of private email accounts has been controversial, as critics say the practice can make disclosure of official business more difficult.

In response to public-records requests from The Associated Press, the auditor's office turned over 53 emails sent from Kelley's official email account to members of his staff from Jan. 1 through March 19. But officials said they could find no emails or texts between Kelley and JeRue, a part-time technical writer who works from home in California, since Kelley took office in early 2013.

"It surprises me," said Rep. Dan Kristiansen of Snohomish, leader of the House Republican caucus. "You'd think there would be communiques they exchange in the course of operations, the way we all live now."

The AP has separately requested any emails relating to state business that Kelley might have conducted from a personal email account or via text from a personal phone.

JeRue, 46, emerged as a central figure in the investigation when a grand jury subpoenaed the auditor's office last month for his records, shortly before federal agents searched Kelley's house in Tacoma. Federal authorities haven't commented on the investigation

Among the records the grand jury sought were any of JeRue's emails that might relate to Post Closing Department, an escrow-services company that Kelley owned and for which JeRue worked. The company was accused in a federal lawsuit of keeping $1.2 million that should have been refunded to a customer. Kelley denied those allegations but paid an undisclosed settlement.

Tax-fraud investigators have also sought records related to Kelley's old business, and the FBI requested records of his expenses from the time he served as a state representative.

Public records released by the auditor's office earlier this week show that JeRue was hired at Kelley's behest soon after his election. JeRue has not responded to requests for comment, and Kelley has insisted that all of his actions have been lawful and appropriate.

In a letter to Gov. Jay Inslee on Wednesday, Kelley said JeRue has taken a requested leave of absence.

Of the 53 emails turned over Thursday, many were simply appointment notifications or cancelations with no text in the body, and some were written not by Kelley but by his executive assistant, Eileen Ryan.

Only five emails were sent from the account in the two weeks following the March 5 grand jury subpoena, a period that at least partially overlapped with a vacation Kelley took to California. The five emails were all sent to Ryan, and all concerned meeting cancelations, duration or location.

JeRue and Kelley met in the late 1990s, when JeRue began working at First American Title Co. of Los Angeles, according to court documents filed in California. Kelley, a lawyer, was in-house legal counsel there and served in several executive roles.

They were both laid off in 2000 as part of what the company described as corporate restructuring, and both sued for wrongful termination. The company accused the pair of conspiring to further their meritless legal claims, and the cases were dismissed.

JeRue also supported Kelley politically, contributing more than $1,400 toward his successful 2006 campaign for the state House.

The auditor's office is tasked with rooting out waste and fraud in state and local government.

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AP writers Rachel La Corte and Derrick Nunnally contributed from Olympia.