Bailey bill ensures Kelley won’t boost pension during his unpaid leave

As state Auditor Troy Kelley takes time off to defend himself against accusations of lying, cheating and stealing, a bill sponsored by state Sen. Barbara Bailey, R-Oak Harbor, ensures he won’t rack up credit toward a state pension.

Her measure would block statewide elected officials who are under felony indictment from garnering “service credit” when they take unpaid leave. The prohibition would be lifted if they are acquitted or charges are dropped. The measure ought to eliminate any financial incentive for Kelley to remain on the job while he fights charges in federal court, Bailey said. Bailey plans to introduce her bill today.

“There are many of us who think Troy Kelley didn’t go far enough when he decided to take unpaid leave,” she said. “This bill should make it much easier for him to make the right decision – and go.”

Officials of both parties have urged Kelley to resign while he battles charges that he lied under oath, stole $3 million from real-estate clients and evaded roughly $1 million in taxes on the money he allegedly took. Kelley faces trial next year on 10 counts of felony criminal activity, following an indictment last month by a federal grand jury.

Kelley is the state official who is responsible for monitoring the financial integrity of state and local government agencies, and investigating allegations of waste, fraud and corruption.

Bailey was joined at a Thursday news conference by Sen. Steve O’Ban, R-University Place, vice chair of the Senate Law and Justice Committee, and Sen. Mark Miloscia, R-Federal Way, chair of the Senate Accountability and Reform Committee. “We hope that this will urge Troy Kelley to do the right thing and resign,” Miloscia said. “He should not be benefiting when his actions have compromised the integrity of his office and made Washington state a national embarrassment.”

Bailey, the chair of the Joint Select Committee on Pension Policy, noted that state law gives Kelley the ability to increase his pension even when he is not on the job. Kelley is a participant in the state PERS 2 retirement program. The law allows PERS 2 participants to take unpaid leave and then make “catch-up” payments at some later point, so that the time off work will be counted toward their pensions. The longer the time of service, the bigger the pension.

“This rule is really designed for the employee who takes time off to care for a sick relative, or some other legitimate reason,” Bailey explained. “Unpaid leave is supposed to be approved, presumably by a supervisor. But Kelley has no supervisor – he is an independently elected official. And all of us ought to be appalled at the fact that he can abandon his office and still count time off toward his pension.”

The law says a PERS 2 participant can make those catch-up payments at any point before retirement. A conflicting provision of the Washington Administrative Code says an employee must return to work in order to claim pension credit. Kelley could comply with that rule by choosing to return to work for a single day. The last full day of his term is Jan. 9, 2017.

When Kelley announced his plan to take unpaid leave, he offered a written statement promising not to collect salary or access state benefits while he is on leave. Yet the carefully worded statement did not address the pension benefits that accrue when he is not working. Kelley said:

“Beginning at 1 p.m. on May 4, I will begin a leave of absence from my position as auditor of the state of Washington. During my leave of absence I will not accept pay or any benefits through the duration of my leave.”

Bailey said, “The grammar alone ought to make us suspicious. We don’t know what Kelley is planning. He hasn’t said much since the indictment – or really much of anything since he was elected. But the statement does leave open the possibility that he could be planning to boost his pension benefits by remaining on the job. It’s really the only rational reason for him to keep the position.

“Even if he were to show his face in the statehouse and look us in the eye and swear he won’t try and collect a pension for the time he sits at home, doing nothing of value for taxpayers — we would have trouble believing him. He occupies a position of trust. He sure doesn’t have ours.”