WILMINGTON, Del.- State Auditor Kathy McGuiness has been indicted on five criminal charges, two of them felonies, after prosecutors say she misused taxpayer dollars and made inappropriate staffing decisions.
The Delaware Department of Justice says the investigation began a year ago after whistleblowers came forward, alleging abuse of tax dollars to benefit campaign associates, a pattern of deceit to evade spending oversight, nepotism, theft, and intimidation of employees.
McGuiness is accused of hiding a contract with a political campaign consultant called My Campaign Group, a group that says it focuses on "providing political candidates with comprehensive issues platforms – taking them from the campaign trail to elected office."
The DOJ says McGuiness paid the group $49,900. That number is significant as state law requires $50,000 state contracts be subject to public bidding.
The indictment also charges that McGuiness structured payments on the contract to cover up her spending and avoid oversight. Delaware Division of Accounting rules require special approval for purchases or payments of $5,000 or more. The Auditor directed invoices of more than $5,000 to be paid in increments under $5,000.
In a statement released Monday night, the chair of the Delaware Democratic Party Betsy Moran responded to the indictment. "”Today’s announcement from the Attorney General’s office is incredibly troubling. When Delaware Democrats supported Kathy McGuiness, they did so on the promise that she would serve as a watchdog to prevent waste and abuse and uphold the highest ethical standard of transparency and fiscal responsibility. Our volunteers and voters put their faith in her to do right by the people of Delaware. To see that she broke the public’s trust while executing her official duties is disheartening and downright embarrassing to our Party."
"Based on today’s grand jury indictment, it is clear that Kathy McGuiness cannot be trusted to do her job in accordance with the law. It would be a disservice to every Delawarean for her to continue in her role.”
Delaware Attorney General Kathy Jennings also says that McGuiness exerted clear nepotism, hiring her own teenage daughter and her daughter's friend for jobs when others were fired for "lack of available work hours."
The Department of Justice also says neither the daughter nor her friend were interviewed, or delegated to an employee without an ethical conflict. The DOJ says McGuiness also gave her daughter a state car to use.
AG Jennings says after McGuiness' daughter went to college in South Carolina, she received taxpayer checks for months despite not coming to work or remotely logging in.
According to the Indictment, as of August 2021, McGuiness' daughter – who was listed as the Office of Auditor of Accounts' (OAOA) Public Information Officer and later listed as an intern – had collected more than $19,000 in taxpayer paychecks, in addition to nearly $8,000 paid to the daughter's friend. The daughter's paychecks were deposited into a bank account on which the Auditor is an owner.
The indictment also says several employees questioned McGuiness' behavior. Prosecutors say in turn McGuiness retaliated against real or perceived whistleblowers and engaged in a course of conduct to surveil those she saw as disloyal to her.
"These are serious charges, and we do not make them lightly," Jennings said in a statement. "The indictment includes a great deal of evidence that the State Auditor repeatedly broke the law and systemically abused her power, beginning in her first year in office. Our investigation revealed a long trail of corruption, nepotism, official misconduct, intimidation, and fraud that implicated thousands of taxpayer dollars — all from an elected official who is supposed to be a watchdog for exactly this kind of misbehavior. We cannot — and I will not — tolerate criminal corruption, no matter who you are."
The Department of Justice says McGuiness submitted dozens of "e-Records" requests to the Department of Technology and Information (DTI) for the contents of OAOA employees' e-mail accounts. This enabled McGuiness to monitor several employees' e-mail communications in real time. Prosecutors say McGuiness also discriminated against employees who questioned her misconduct, and enacted office policies to limit the off-hours, personal activities of employees who she believed associated with former OAOA staff.
Monday's indictment charges McGuiness with five crimes: Conflict of Interest, in violation of the State Officials' Code of Conduct; Felony Theft; Non-Compliance With Procurement Law by structuring State payments; Official Misconduct; and Felony Witness Intimidation.
The DOJ reminds the public that the Division of Civil Rights & Public Trust's (DCRPT) investigation into McGuiness and OAOA are ongoing, and urges anyone with information they believe is relevant to the investigation to contact DCRPT at (302) 577-5400 or de.gov/publictrust. Public trust complaints may also be submitted online at?de.gov/dcrptcomplaint.
