Allegations at center of state auditor's race

Election: Candidates want to talk issues, too

jordan.schrader@thenewstribune.comOctober 8, 2012 

Allegations surfacing from a candidate’s past have brought a higher profile to the usually sleepy race for state auditor. Receiving less attention: what the two of them would do with the job.

It turns out they’re talking about that, too.

In between tussles over the meaning of court documents involving Tacoma Democrat Troy Kelley’s business ventures, Kelley and Redmond Republican James Watkins have touted the backgrounds and priorities each would bring to the role of state government watchdog.

Both see themselves building on the efforts of retiring five-term Auditor Brian Sonntag, who has embraced the more activist role for the office that voters gave him when they authorized performance audits of government. Both call for promoting the causes of government efficiency and productivity, whistleblower protections and open government.

Kelley would revisit some of the problems he has identified during six years in the Legislature. He says his performance audits would compare what Washington does to practices elsewhere, as Sonntag has done.

“What I would do is see what other states have done in that exact same case,” Kelley said, speaking about highway spending near Joint Base Lewis-McChord but expressing a similar philosophy as he did for several audit topics. “Are we slower than other states? Are we ahead of the game already?”

Other topics he wants to look into include the compacts Washington has signed with other state governments; methods used to measure how much proposed laws would cost or save; and insider trading by lawmakers.

Both candidates say they will push to tighten open-meetings laws for government bodies.

Watkins says he will align his priorities with the next governor’s, whether that is Republican Rob McKenna or Democrat Jay Inslee, whom he challenged in 2010. He said he’s encouraged by promises from both men to enhance the use of lean-management techniques pioneered by Toyota, used by Boeing, and starting to become more common in state government.

He also has been gathering ideas from voters.

“I get a lot of reports from state employees … stories about, the state is still hiring management people while they’re talking about laying off other people,” he said, adding that there’s a perception that those managers rely on their connections to get jobs. “We can’t afford that in state government,” he said.

Watkins also said he hears stories of public employees facing retaliation for blowing the whistle on their agencies. While the auditor’s office says their identities are kept strictly private, Watkins said he wants to figure out ways to protect them better.

Kelley said he wants to review whistleblower protections with the aim of preventing the kind of retaliation seen in Pierce County Assessor-Treasurer Dale Washam’s office, he said.

Kelley is a pro-business lawmaker from a swing district in Pierce County who has voted against key tax increases and in favor of same-sex marriage.

He joined a group of centrist Democrats who pushed to overhaul state workers’ compensation insurance. And he worked on addressing a series of perceived gaps in criminal law spotlighted in the case of cop killer Maurice Clemmons – notably, ensuring suspected felons accused of the most serious crimes can post bail only after a review by a judicial officer.

Watkins lacks a voting record, but in his race against Inslee was critical of President Barack Obama’s stimulus and health-care laws, and called for shifting education responsibilities from the federal government to the states, which he says is a matter of keeping tax money in-state. He identified with the tea party movement during that campaign, but says he is not the extremist Kelley’s campaign makes him out to be.

“My tea party (definition) is a group of friends and neighbors who believe government should be better,” he said.

Both vow to be independent and impartial as they push to hold government agencies accountable.

To Kelley, that includes his colleagues in the Legislature. One idea he has is to review the rules for how lawmakers disclose stock trades when they might have inside information. If the state is going out for bids and “there’s only a couple companies out there that are going to be able to be a vendor, I think then there’s a potential for insider information,” he said.

Their résumés show different kinds of experience with audits.

Kelley led the Legislature’s audit committee, which examines programs and reviews Sonntag’s performance audits. As a young lawyer, Kelley worked on financial audits at the Securities and Exchange Commission.

Watkins says he has made a living doing performance audits and their equivalent in the private sector. He says he has done about 150 such reviews, though Kelley questions the number and Watkins declines to disclose most of his clients. Many have been more brief than the typical examination by state auditors of programs’ success, he said – and he would try to bring such quick-hit audits to the office.

He worked for Microsoft as a consultant and then as an employee selling to retailers, all after work early in his career at the Federal Deposit Insurance Corp.

His boss at the FDIC, Russ Cherry, said Watkins was part of a team that examined the agency’s operations during the savings-and-loan crisis. “What we were trying to do was make sure that the dollars we were applying to different programs were more than just throwing money at something,” he said. “We were looking for change.”

Kelley has run his own business processing and tracking mortgage title documents, after spending much of his career at First American Title Co. in California, where he ran two subsidiary companies.

His time at First American ended acrimoniously with both sides accusing each other of wrongdoing amid a wrongful termination lawsuit Kelley filed.

Before that conflict, he reported to Tom Kelley (the two say they are not related) who praised his skills as a lawyer and a manager.

“He was very good at managing people. People that worked for him liked him and worked very hard for him,” said Tom Kelley, who said he wasn’t involved with the later conflict.

Troy Kelley’s lawsuit at First American and a later lawsuit a client filed against Kelley and his businesses have been fertile ground for Watkins, who said the allegations of theft, tax evasion and other wrongdoing make him unfit to be the state’s watchdog. Kelley denies the allegations. He was never charged with a crime.

Whether the allegations will sway voters could depend on how widely Watkins is able to advertise. Kelley, with help from his own bank account, has outraised him four to one.

jordan.schrader@thenewstribune.com 360-786-1826 blog.thenewstribune.com/politics @Jordan_Schrader

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