AG to investigate Kelley hiring of JeRue
OLYMPIA -- The attorney general's office will investigate State Auditor Tory Kelley's hiring of long-time business associate Jason JeRue to see if it violated any Washington laws.
Attorney General Bob Ferguson said today he was acting on a request from Gov. Jay Inslee to look into "potential criminal activity" in JeRue's hiring and all evidence related to his employment, which could lead to prosecution separate from the ongoing federal case.
The request from Inslee was necessary for Ferguson's office to have the jurisdiction needed to get involved because criminal prosecutions are typically handled by county prosecutors. As far as the attorneys working on the investigation could determine, it was first time the governor has asked the attorney general to investigate a statewide elected official since the law was passed in the 1970s.
Ferguson declined to offer specifics about the scope of the investigation just beginning and dodged a question about whether he personally had concerns about JeRue's hiring before Inslee made the request. "The letter from the governor did not come as a surprise," he said.
JeRue was a business associate when Kelley operated a business that administered millions of dollars in escrow money for real estate purchases. Federal investigators contend the company did not return all of the money required to borrowers. After Kelley was elected state auditor in 2012 he hired JeRue as a part-time technical writer who worked out of his home in California.
Kelley is on an indefinite unpaid leave while federal prosecutors investigate some of his business activity that predated his 2012 election as state auditor. In April, a federal grand jury indicted him on 10 counts that included fraud, lying to federal investigators, filing false tax returns and "corrupt interference with Internal Revenue laws." He pleaded innocent to all counts and his trial date has been moved back to next January. He has resisted calls from Inslee and legislators to resign.
JeRue was fired shortly after Kelley began his leave of absence and was replaced by acting state auditor Jan Jutte.
