Kathy McGuiness fires back at Attorney General, denying all wrongdoing

Delaware State Auditor Kathy McGuiness fired back at the Attorney General Kathy Jennings, denying all wrongdoing after she was indicted Monday by a grand jury for fraud, nepotism, and official misconduct.

McGuiness issued a statement through her attorney that vehemently denied any and all wrongdoing, especially the charge of nepotism which she said is permitted under Delaware law and that other agencies have hired family members before, including the Attorney General’s Office.

“Delaware law does not prohibit family members from hiring family members, and there have been many instances of such employment all throughout state government – including in the Attorney General’s Office,” McGuiness said via her attorney, Steven Wood. “It is also true that, like millions of Americans, Ms. McGuiness’s daughter worked remotely during the COVID pandemic. However, the Indictment’s assumption that the only way for a state worker to work remotely is by using the State’s email network is false.”

McGuiness’ daughter and a friend were employed by the office, neither of whom were interviewed, according to the indictment from the Delaware Department of Justice (DOJ).

As the pandemic triggered record unemployment across the country, Jennings said McGuiness fired an employee citing lack of work hours and that two others left under the same premise, but despite that she still hired her daughter and her friend.

“The defendant’s daughter enrolled in a college in South Carolina. For months, despite not coming into work, never logging in remotely, barely ever sending so much as an email, her daughter continued to receive taxpayer checks. Those paychecks were deposited into an account co-owned by her mother, the defendant,” Jennings said. “As of August, 2021 the defendant still employs her daughter on the state payroll.”

State Auditor Kathy McGuiness

McGuiness’ daughter was paid over $19,000 in taxpayer dollars, according to the investigation, in addition to $8,000 paid to her daughter’s friend.

McGuiness turned herself into authorities Tuesday morning and attended a bail hearing at the Leonard L. Williams Justice Center in Wilmington where she pleaded not guilty to the charges.

The charge that she broke state procurement law was also refuted by McGuiness in the statement, saying “there is nothing unlawful about hiring a former campaign consultant to perform legitimate tasks related to government service.”

Attorney General Jennings said the investigation uncovered a “sweetheart deal” to avoid oversight of State Auditor McGuiness’ state contract with campaign vendor ‘MyCampaignGroup.’

“She informed them of a loophole that would allow them to avoid a competitive bidding process by keeping the initial contract amount below $50,000,” Jennings stressed. “The bidding process exists to protect taxpayers. It’s there to prevent this exact behavior. A month later, the defendant entered into a contract with MyCampaignGroup, which was never submitted for public bidding whatsoever. In total, the State Auditor’s Office paid MyCampaignGroup $49,900, just $100 shy of the public bidding threshold thus avoiding public oversight.”

“The contractor in question has performed policy development services for other elected officials in Delaware before – including a former Governor,” McGuiness stated through her attorney. “All of the relevant contracts were entirely lawful.”

The Division of Civil Rights and Public Trust was able to obtain the indictment following a full-scale investigation involving witness interviews and document reviews that officials say prove the allegations.

McGuiness was indicted on charges of conflict of interest in violation of the state’s code of conduct, felony theft, non-compliance with procurement law by structuring state payments, official misconduct, and felony witness intimidation.

“The investigation has confirmed a clear and disturbing pattern of behavior that was not only unethical, but it was against the law,” Jennings said. “We uncovered corruption, nepotism, fraud, and misconduct that implicated thousands of taxpayer dollars.”

The investigation, which Attorney General Jennings stressed remains ongoing, comes after several whistleblowers came forward to inform the DOJ of the alleged misconduct.

During the course of the investigation, officials discovered that McGuiness allegedly monitored and intimidated real or perceived whistleblowers.

Over three dozen requests were submitted to monitor employees emails, including at least one former employee at a completely separate agency, according to the DOJ.

“If anyone should know better, it is the State Auditor,” Jennings said. “Instead, as our investigation has shown, Kathleen McGuiness carried out the very misbehavior that she was elected to stop.”

McGuiness denied such a notion in her statement, saying “the witness intimidation charge is pure fiction, and clearly the result of fanciful tales spun by former employees with an axe to grind.”

“Ms. McGuiness will continue to work hard on behalf of Delaware’s taxpayers and intends to focus on the job that she was elected to do,” the statement read in closing. “She will have no further comment on this matter. When the whole story is finally heard, the facts will speak for themselves.”

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