Learning From the McGuiness Trial

Kathy McGuiness, Delaware’s Auditor of Accounts, is the first statewide elected official to be charged and found guilty of crimes while in office. In spite of two guilty verdicts, she retains her position as State Auditor and is running for reelection, telling voters she’s the victim of an unfair, political prosecution.

One thing we’ve learned from the McGuiness trial is that Delaware law includes no prohibitions against nepotism which is reportedly widespread in our state government. Delaware’s ethics statutes need an overhaul.

This trial also revealed much about the functioning of the Auditor of Accounts office and Kathy McGuiness’ fitness for office. First, it appears that state time and resources were used to support McGuiness’ political campaign.

According to Mark Denny, the lead state prosecutor on this case, the Court suppressed, “State’s evidence regarding the Defendant’s political and campaign work on the job, including creating political ads at the office, creating spreadsheets with campaign contracts, and rewarding employees who marched in political events and parades with office ‘comp time’.”

One key issue in the trial was the handling of a contract which McGuiness executed with My Campaign Group, a political consulting group which had assisted her with past campaigns. Both the name of this consultant, and the past work for McGuiness, would indicate that this was a contract for a campaign consultant paid with state funds.

McGuiness’s daughter was hired to work in the Auditor’s office. According to a News Journal article, part of the daughter’s job was “referred to in court as ‘staffing Kathy’ which included traveling to events with her mother where she would help hand out literature and take pictures.” This is campaign work—not auditing.

The trial also revealed the toxic atmosphere in the Auditor’s office. A Cape Gazette article quoted Christie Gross, the political consultant hired by McGuiness, as stating: “It was a very toxic culture. I had to make the decision to leave.” Quoted in a News Journal article, even McGuiness’s attorney, Steve Wood, conceded that the office “had ‘a lot of tension’ and did ‘not sound like a fun place to work’.” These quotes are from McGuiness team-mates.

The News Journal also reported that shortly after McGuiness was indicted, “her office had paid $260,000 to outside attorneys to handle workplace complaints.” WDEL reported that, “Records show McGuiness made 42 requests to view employee emails, while the Governor’s Office and the Delaware Department of Justice made two and four requests, respectively, over that same period.” 

As I reported in an earlier article, McGuiness often fakes her work product. In a softball interview with Jeff Balk (Radio Rehoboth), McGuiness stated: “Last fiscal year including the ACFR (Annual Comprehensive Financial Report) which has 23 components, we released over 80 reports.”

When you visit the Auditor of Accounts website, there is a tab for Reports and for FY 2022, referred to above as “last fiscal year”, the report at the top of the list is the ACFR as referenced by McGuiness above.

This link takes you to a 213 page PDF. Upon closer examination, it appears as if three pages have been inserted at the beginning. The first page presents the title of the report. Below the title, where the author’s name would normally appear, is “Kathleen K. McGuiness” along with her title and the logo of her office.

Page 4 is the original title page where we learn that the ACFR was “Prepared by the Department of Finance, Division of Accounting”. On page 5 are listed the names of 8 Department of Finance staff members credited with preparing this report.

The bogus title pages, inserted by the Auditor in front of many reports prepared by state agencies and independent auditors, do not explicitly claim authorship. The Auditor’s website uses more passive terms including “issued” or “released”.

A McGuiness campaign email announces: “State Auditor Kathy McGuiness has spent the better part of the last 10 months proving in and out of court that she is in fact…innocent.”  She has continued to draw her state salary. She is planning to continue her legal battle, and is also facing another lawsuit filed by a former employee. If McGuiness is re-elected, many months of her second term would also be devoted to her legal struggles.