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State Auditor McGuiness indicted in misconduct case

WILMINGTON – Delaware State Auditor Kathy McGuiness was indicted Monday and charged in a case where she is accused of misappropriating taxpayer funds and hiring her teenage daughter and daughter’s friend for office jobs.

State Auditor Kathy McGuiness | PHOTO COURTESY OF STATE OF DELAWARE

The charges obtained by State Attorney General Kathy Jennings include felony theft, felony witness intimidation, noncompliance with procurement law, official misconduct and conflict of interest. In a Monday press conference, Jennings called the findings of her months-long investigation “a clear and disturbing pattern of behavior that was not only unethical, but against the law.”

“We uncovered corruption, nepotism, fraud, and misconduct that implicated thousands of taxpayer dollars,” Jennings said outside the New Castle County Courthouse.

McGuiness is accused of awarding state contracts to My Campaign Group, a campaign communication services firm that she worked with during a failed 2016 run for lieutenant governor. She allegedly informed them of a loophole that doesn’t require contract bidding under $50,000, by paying them a total of $49,900.

The auditor is also accused of laying off employees during the height of the COVID-19 pandemic, only to then hire her daughter and her daughter’s friend without advertising the position. She allegedly paid her daughter a state salary for months after she moved to South Carolina for college and also provided her with a state-owned car.

As of August, her daughter was still on the state payroll having received more than $19,000 in wages, Jennings said. Her friend had received about $8,000.

“This was done by the state auditor whose job is to literally protect your taxpayer dollars from this kind of spending,” Jennings said. “If anyone should know better, it should be the state auditor.”

Jennings credited her investigation, which is still ongoing, with the “courage” of about a dozen office whistleblowers. McGuiness is charged with intimidating real or perceived whistleblowers by monitoring their email, among other measures.

Jenning noted that McGuiness has declined to speak with investigators from her Division of Civil Rights and Public Trust and that she had purposefully not spoken with the auditor.

McGuiness, a Democrat, is serving her first four-year term after being elected in 2018, becoming the first woman to hold the statewide office. The state auditor ensures accountability in the use of taxpayer dollars to identify fraud, waste and abuse through independent assessments, including the use of various audits, special reports and investigations of financial operations, performance management and statutory compliance of state government and to evaluate economy, efficiency and effectiveness, according to the office.

A licensed pharmacist and certified fraud examiner, McGuiness was a co-founder of Rehoboth Beach Main Street in the ‘90s. She would be elected to the Rehoboth City Council in 2000, serving for 18 years before running for state auditor.

During her term, McGuiness has shaken up the auditor’s office after a series of contentious episodes prior to her arrival, including the dismissal and reinstatement of the office’s deputy auditor. She paid for an audit of the office’s own work by an outside firm, which determined it wasn’t completing all of its legally mandated work.

McGuiness has also edged into policy decisions, including releasing a report in January outlining the potential tax benefits of legalizing marijuana in Delaware.

Jacob Owens

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  • So, I wonder what will happen to her? Nothing. That’s why these crimes are so brazenly committed I. The first place IMO

  • I have known Kathy since we sat next to each other in first grade. I feel that a another full investigation has to be done by a complete different group of people of interest. These things that she is being accused of, sound like a desperate form of sabotage. I truly believe that she is far to intelligent to do these things that would put herself and her family, at risk of an unfavorable reputation of being a fantastic State Auditor.

  • She was never qualified to be an "auditor'; let alone the head auditor of any state. She only got elected because of her family connections and the "D" after her name on election day. The definition of hubris = A pharmacist believing she was qualified to be a governmental auditor. The definition of stupid = People voting to allow her to do it. Ever since she took the position everything has been about self-promotion. It was obvious she was only taking this position as a stepping stone to something bigger and better politically. Listen people: she engaged an outside accounting firm to "audit" her office because 1) she was incapable of professionally evaluating it herself, and 2) it gave her cover in the event something popped up which could make her look bad. So, the citizens of Delaware paid her to be "the auditor", and then paid an outside accounting firm to do what she should have done herself.
    Unfortunately, Tom's assessment is correct. Nothing really will happen to her. After a lengthy negotiation period with Carney and the AG office (during which time she will continue to be paid) she will agree to step aside solely "for the good of the state and the party". The Dems will give her political cover and she'll get appointed to some other position in the party so her public image can be redeemed. The "Delaware Way" is still going strong!

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Jacob Owens
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