Delaware auditor dodges felony charges, guilty of misconduct

By Craig Anderson
Posted 7/1/22

DOVER  — Jurors on Friday returned a mixed verdict in the public corruption trial of Delaware State Auditor Kathy McGuiness, acquitting her of felony public corruption charges, but finding her guilty of three misdemeanors.

You must be a member to read this story.

Join our family of readers for as little as $5.99 per month and support local, unbiased journalism.


Already a member? Log in to continue.   Otherwise, follow the link below to join.

Please log in to continue

Log in

Delaware auditor dodges felony charges, guilty of misconduct

Posted

DOVER — Guilty on three misdemeanor counts, not guilty on two felonies.

Such was the fate of State Auditor Kathy McGuiness Friday in the first conviction of a statewide elected official while in office.

While the criminal corruption trial ended, the case itself isn’t over. Judge William Carpenter Jr. deferred sentencing as he expected motions to be filed.

Defense attorney Steve Wood said he planned to file a motion for a new trial and renew another motion for acquittal.

Emerging from deliberations at around 12:20 p.m., a jury foreman announced the state’s auditor had been found guilty of conflict of interest: violation of the state officials code of conduct, structuring: non-compliance with procurement law and official misconduct.

The jury deemed Ms. McGuiness not guilty of felony theft and act of intimidation.

The three misdemeanor convictions could bring at least one year prison time for each charge, though Mr. Wood said he believed that to be extremely unlikely based on sentencing history in the First State. Probation is an option, and sentencing decisions are made by the judge.

The jury deliberated from about 2:45 p.m. to 4:30 p.m. Thursday after Mr. Wood and prosecutor Deputy Attorney General Mark Denney delivered closing arguments. The jury resumed deliberations at 9:30 a.m. on Friday.

Following the verdict, Mr. Denney declined comment and deferred to a statement released by Delaware Attorney General Kathy Jennings that read:

“From the moment I took office, I promised that no one would be either above the law or beneath justice.

“Today’s guilty verdict confirmed that. After weeks or grueling trial and mistreatment of whistleblowers, the state auditor — whose job is to protect our state from waste, fraud and abuse – has been found guilty of three crimes by a jury of her peers.

“I am grateful for the jury’s judgment, for the excellent work of our trial team, and above all else for the courage of the whistleblowers and witnesses who came forward and made accountability possible. Our office’s — and the jury’s — message is clear: abuse of office will not be tolerated in Delaware.”

With a gag order lifted by Judge Carpenter, Mr. Wood and Ms. McGuiness answered a wide-ranging host of questions from media for around 17 minutes near the Kent County Courthouse exit.

Ms. McGuiness said that she was “very disappointed” with the outcome and has “a great team.

“So I’m looking forward to working again with them to rectify the situation.”

Mr. Wood, a longtime Delaware Department of Justice prosecutor, said he “was incredibly disappointed that the judge repeatedly said that he would deal with the legal arguments we were making down the road.

“And now here we are. So yeah, we were incredibly disappointed by that. But I’ve had the experience in my very last criminal trial of watching the jury convict someone who was innocent only to have the conviction overturned by the United States Court of Appeals. So the process is just now beginning.”

Asked why she thought the case was brought against her, Ms. McGuiness replied that “I will say I believe it’s political. And that’s all I will tell you.”

While ample testimony from former auditor’s office employees decried the alleged tension-filled culture under Ms. McGuiness’s leadership, she described it currently as “ pretty fantastic.”

Ms. McGuiness then pointed to some office staff near the front of the courthouse and said, “I have some support right there from some employees right now.”

Admittedly, the state auditor said, “We had some bumps along the way. Again, I took over an office (run for) 30 years and change is very difficult for some folks, and there’s a new person, whoever it was going to be, is going to have a different style and I wanted to make that office relevant again.

“Because I can tell you most people don’t even know we have a state auditor and what we do.”

The expectation was a “banner year” ahead thanks to a variety of engagements, audits reports and more, Ms. McGuiness said.

Additionally, the prosecution took particular aim at Elizabeth “Saylar” McGuiness’s employment as a casual-seasonal employee in the auditor’s office, questioning her hours worked and whether she was afforded preferential treatment as the auditor’s daughter. The AG’s office ultimately got the conflict of interest conviction it was seeking.

Elizabeth is currently employed by the auditor’s office, her mother said.

The auditor said it was tough to hear testimony and watch her on the stand especially “when you care about somebody, and especially when you know the truth and how hard my team works.

“It’s it absolutely is difficult, but she’s very strong. I love her work ethic and I’m proud of her poise and how she handled herself.”

The structuring conviction centered around the AG’s office claim, which was affirmed by the jury, that Ms. McGuiness had bypassed the legal process when the auditor’s office entered into contracts with My Campaign Group, which served as a consultant during her unsuccessful run for lieutenant governor in 2016.

While Mr. Wood did not criticize to jury for its attention to the case, he said “there’s no question that their thought process was influenced by multiple erroneous decisions that were made by the court along the way.

“The state engaged in multiple acts of discovery misconduct, which the court agreed with, but then failed to impose any kind of a meaningful sanction.

“The crime of structuring as defined by the court we have argued, and will argue again is contrary to the way the crime is defined in Delaware law.

“And along the way, we repeatedly objected to evidence that we thought it was nothing other than inadmissible and unfair character evidence.

“The court repeatedly said ‘Well, we’ll deal with it at the end of the state’s case,’ and did not, and there’s no question that evidence likely affected the jury’s verdict.

“So, we will be addressing all of those arguments in appropriate filings at the appropriate time.”

Common Cause Delaware Executive Director Claire Snyder-Hall said the conviction shows the need for a nonpartisan Inspector General’s Office to served as a government watchdog. Some state legislators have pushed for an IG’s office as well, through efforts fell short in the last legislative session.

Via a statement, Ms. Snyder-Hall said, in part, “We are both angered and saddened by the betrayal of the public trust that is evidenced by today’s conviction ...

“Delawareans shouldn’t have to wonder whose interests our elected officials serve. We deserve to have confidence that our tax dollars are being well-spent, and that our government officials are serving our interests, not the interests of themselves, their families, or their cronies.

“This public corruption case demonstrates the need for an Office of the Inspector General, dedicated to searching out waste, fraud, abuse, corruption and other conduct that is harmful to the public interest – and to helping recover misspent or inappropriately paid funds.”