Jury begins deliberations in state auditor corruption trial

June 30, 2022 GMT

DOVER, Del. (AP) — Jurors began deliberations Thursday in the criminal corruption trial of Delaware State Auditor Kathy McGuiness after hearing closing arguments from attorneys.

Jurors deliberated for about two hours Thursday and will reconvene Friday.

McGuiness, a Democrat, is responsible as state auditor for rooting out government fraud, waste and abuse. She faces felony counts of theft and witness intimidation, and misdemeanor charges of official misconduct, conflict of interest and noncompliance with procurement laws. McGuiness, the first statewide elected official in Delaware to be prosecuted while in office, faces up to 13 years in prison if convicted on all counts.

Prosecutor Mark Denney told jurors McGuiness “used and abused” her position to hire her daughter and give her special privileges unavailable to other part-time workers. He also said she stole money from the state by paying Elizabeth “Saylar” McGuiness and having access to their joint bank account.

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Denney also said McGuiness ruled “with an iron fist,” harassing and intimidating employees who she suspected might be cooperating in an investigation of her office.

In addition to hiring her daughter when other part-time workers were leaving because of a lack of work during the coronavirus pandemic, prosecutors say McGuiness orchestrated a no-bid communications services contract for a consulting firm she had used in a 2016 campaign for lieutenant governor, then kept the payments under $5,000 to avoid having to get them approved by the Division of Accounting.

“Kathy McGuiness knew just how to play the system, and she did,” Denney said.

Defense attorney Steve Wood told jurors the prosecution’s investigation was “incomplete, incompetent and biased from the very beginning.”

“This was not an investigation designed to ferret out the truth,” he said.

Wood noted that chief investigator Franklin Robinson repeatedly made false statements in a search warrant affidavit and grand jury testimony, despite seeing documents with contradicting information.

“That search warrant was reviewed by a special team of investigators and lawyers, and they still got it horribly wrong,” Wood said. “Can you trust that special team of investigators and lawyers to get it right now?”

He also refuted allegations that Saylar McGuiness, 20, never sent any work-related emails after she left for college while remaining on the payroll. Wood also noted that investigators failed to interview five other part-time workers to determine whether Saylar McGuiness got special treatment.

He also reminded jurors that Robinson admitted there was “zero evidence” Kathy McGuiness ever received any money from the joint bank account that had been set up for her daughter when she was a child.

Wood acknowledged that there was “a lot of tension” in the auditor’s office as McGuiness tried to make changes after her predecessor’s 30-year tenure. McGuiness monitoring of her employees’ emails, which is allowed, may sound “creepy” but is not evidence of a crime, he added.

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Wood said there were justifiable reasons for one employee receiving a performance improvement plan and two others being reprimanded. Those actions do not amount to witness intimidation, he argued. To convict McGuiness of intimidation, prosecutors must prove she knew that a person was a witness, knew her conduct was intended to prevent or dissuade that person from cooperating with authorities, and acted with malice.

Wood also took aim at allegations regarding the contract with My Campaign Group and payments made to Christie Gross, owner of the consulting firm.

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Robinson said in a sworn affidavit that payments to My Campaign Group were split in August and September 2020 to keep them under $5,000, the threshold requiring approval from the Division of Accounting. In fact, he and prosecutors had seen a Division of Accounting spreadsheet several weeks earlier indicating that Gross received only one payment each month, both above $5,000 and both approved by the Division of Accounting.

Wood reminded jurors of emails among McGuiness, former chief of staff Thomas Van Horn, and administrative officer Shequanna Cousin about a My Campaign Group invoice for $11,250 that had been sent back by the Division of Accounting because the purchase order for the contract had a remaining balance of only $4,350.

McGuiness asked if they could pay $4,900 of the $6,900 excess as a “direct claim” voucher outside the purchase order. Such payments are allowed if a change order or “after-the-fact waiver” request is submitted.

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Cousin, who was responsible for payments and waiver requests, said she could pay the $4,350 under the purchase order and $4,900 as a direct claim, and a new voucher for $9,250 was submitted to, and mistakenly approved by the Division of Accounting.

Wood said Van Horn and McGuiness assumed that Cousin would submit the required waiver after returning from vacation, but they didn’t know Cousin had decided to quit and would not be returning. The waiver never got submitted.

Wood also told jurors that Robinson never interviewed Cousin’s replacement, Tracey Rogers, regarding a credit card receipt for the final payment under the My Campaign Group contract. Rogers testified that she mistakenly attributed the receipt to Innovate Consulting, another policy consulting firm that had been formed by Gross and which had been awarded a competitive bid for a second professional services contract.