Defense rests in corruption trial of Delaware state auditor

June 29, 2022 GMT

DOVER, Del. (AP) — Delaware State Auditor Kathy McGuiness declined to testify Wednesday as the defense rested its case in her criminal corruption trial.

“I am confident that my team has conveyed reasonable doubt, so no thank you, your honor,” McGuiness told Superior Court Judge William Carpenter Jr.

McGuiness, a Democrat elected in 2018, is responsible as state auditor for rooting out government fraud, waste and abuse. She is being tried on felony counts of theft and witness intimidation, and misdemeanor charges of official misconduct, conflict of interest and noncompliance with procurement laws. McGuiness is the first statewide elected official in Delaware to be prosecuted while in office.

Prosecutors allege, among other things, that McGuiness orchestrated a no-bid communications services contract for My Campaign Group, a consulting firm she used when running for lieutenant governor in 2016, then kept the contract payments under $5,000 to avoid having to get them approved by the Division of Accounting.

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They also allege that McGuiness hired her daughter and her daughter’s best friend as part-time employees in 2020, even though other “casual-seasonal” workers were forced to leave because of the lack of available work. In hiring her daughter and exercising control over her pay, McGuiness engaged in theft and conflict of interest, according to prosecutors, who note that Elizabeth “Saylar” McGuiness’ paycheck went into a joint bank account she shared with her mother.

Authorities also allege that after employees began complaining to the attorney general’s office about McGuiness, she responded by intimidating and harassing the whistleblowers, including monitoring their email accounts.

Testimony concluded with three defense witnesses and some final questioning of chief investigator Franklin Robinson, who has struggled to answer questions about repeatedly making false statements in a search warrant affidavit and to a grand jury, and omitting information that could have cast McGuiness in a more favorable light.

Jurors heard a recording of a phone call Robinson made to Lydia August, a part-time employee in the auditor’s office who left in May 2020. That’s the same month the state Department of Justice began investigating McGuiness after receiving complaints about her conduct.

“What we’re doing is a general review of casual-seasonal employees that were impacted by the pandemic,” Robinson told August in the May 2021 phone call, adding he was looking into the treatment of casual-seasonal employees “throughout state government.”

In reality, Robinson was conducting a criminal investigation, not a “general review,” and was looking only at casual-seasonal employees in the auditor’s office, and no other state agencies.

As he has done previously under cross-examination, Robinson became evasive when defense attorney Steve Wood grilled him about the falsehoods.

“I wouldn’t agree with the characterization as false,” said Robinson, who explained he was concerned that August might tell McGuiness about the phone call.

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“So you’re testifying it’s not false, even though it’s not true? Wood asked.

The judge then told Wood to “move on,” noting that it was a common investigative technique for law enforcement officials to make false statements when questioning people, and to imply otherwise was not acceptable.

Wood nevertheless got Robinson to admit that saying his investigative techniques include “telling people falsehoods.” Prosecutor Mark Denney echoed that sentiment, describing the practice as “common.”

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August, meanwhile, said she had told McGuiness after being hired that she planned to stay only until May 1, 2020, because she was planning to move. She later asked to stay through June 1, but was allowed to stay only until May 18.

“I wasn’t offended at all,” said August, whom prosecutors allege was laid off to make room for McGuiness’ daughter.

Jurors also heard from Kyra Marshall, a friend of Elizabeth McGuiness who also worked part-time at the auditor’s office. Marshall said she had the same pay and work conditions as the younger McGuiness, including access to Kathy McGuiness’ state-issued vehicle. Prosecutors contend that access to that vehicle was among the special privileges made available to Saylar McGuiness but not other part-time workers, even though several have testified that they, too, were authorized to drive it.

The final witness was Tracey Rogers, a former employee who mistakenly attributed a final payment on the My Campaign Group contract to another firm, Innovate Consulting, which had been established by consultant Christie Gross and won a competitive bid for a second contract. Prosecutors have suggested McGuiness directed the $1,950 credit card payment to Gross’ PayPal account and had it attributed to Innovate, rather than My Campaign Group, in an effort to avoid compliance with state procurement rules.

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Rogers, who had recently joined the office, testified that neither McGuiness nor her chief of staff told her to code the credit card receipt to Innovate Consulting instead of My Campaign Group.

“My understanding ... is that we were no longer using My Campaign Group and (Gross) was opening up Innovate Consulting.... I probably made the assumption myself that it should go there,” Rogers said.