A jury found Delaware Auditor Kathy McGuiness guilty of three public corruption misdemeanors on Friday.
They found McGuiness guilty of conflict of interest, structuring and official misconduct. Each carry the potential for one year imprisonment. McGuiness will be sentenced at a later date. The jury returned not-guilty verdicts for the two felonies McGuiness faced: theft and witness intimidation.
The jury deliberated for about four hours over Thursday afternoon and Friday morning.
Leaving the courthouse, McGuiness said she was disappointed by the verdict and felt the prosecution was “political,” declining to elaborate. Her attorney, Steve Wood, said he intends to move for a retrial as well as ask a judge to acquit his client on legal technicalities.
McGuiness becomes the first statewide-elected official to be both criminally charged and found guilty of a crime while in office. The Democrat took office in 2019 as auditor, a position tasked with investigating and safeguarding public spending throughout state government and local school districts.
Lead prosecutor Mark Denney declined to comment on the verdict as he departed the courthouse. In a written statement, Delaware Attorney General Kathy Jennings, whose department prosecuted McGuiness, thanked whistleblowers and witnesses who “came forward and made accountability possible.”
“Our office’s — and the jury’s —message is clear: abuse of office will not be tolerated in Delaware,” Jennings said.
Earlier this year, McGuiness filed to run for reelection. After the verdict, she said she will continue her campaign. Both McGuiness and Jennings have been mentioned in political circles as potential candidates for governor in 2024.
McGuiness was indicted in October by prosecutors in the Delaware Department of Justice, who began investigating her in Spring 2020, according to trial testimony.
She has resisted calls to resign and Delaware’s Democratic lawmakers have punted on seeking her ouster. She mounted a legal defense through attorney, Wood, who spent decades as a state prosecutor and top official in the Delaware Department of Justice before his career in private practice.
She has not publicly discussed the case, but fought the charges in pretrial litigation claiming the nepotism and other issues at the root of some of the charges is commonplace in Delaware government and that Department of Justice officials ran an “incompetent” and “biased” investigation.
Her three-week trial occurred in Dover, steps away from her state offices. The proceeding saw testimony from nearly 30 witnesses, a mix of state officials explaining the documents entered in evidence as well as former employees, some of whom described a “toxic” workplace overseen by McGuiness.
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The conflict of interest misdemeanor the jury convicted McGuiness of centered on her hiring her daughter to work in the office.
Her daughter told the jury that McGuiness hired her and her childhood friend to part-time jobs in 2020. The daughter testified that she continued working remotely while in college and continues to work in the office as of when she took the witness stand.
Prosecutors argued the daughter was hired as other part-time employees saw a reduction of work during the pandemic. They argued she was given other special privileges in a way that violates the state’s conflict of interest laws.
Wood presented emails to argue that her daughter did in fact work for her pay. He argued that some other part-time employees were treated similarly and that prosecutors didn’t interview enough part-time employees to make a valid comparison.
Her daughter’s employment was the root of the felony theft charge as the two shared a bank account the daughter started when she was a child. She was found not guilty of that charge.
Much of the trial was spent by Wood hammering prosecutors for misunderstanding and making false statements about foundational documents at the center of the structuring charge when they indicted McGuiness last year.
Trial testimony showed that two payments in September 2020 totaling $11,250 to political and issues consultant Christie Gross, who had a contract with the auditor’s office, were done in a way that did not follow the exact process outlined in the state’s budget and accounting manual.
Prosecutors did not allege that Gross should not have been paid or that she was not hired illegally, but took issue with the process of routing the payments to her. Prosecutors showed emails they said evidence McGuiness orchestrating the non-compliant payments. Wood introduced emails showing McGuiness asking finance employees in her office what to do.
He also presented evidence showing similar missteps involving a lot more money in other state agencies that were corrected with waivers filed after the fact.
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Waivers were not filed to rectify Gross’ payments, but the employee responsible for that had quit around that time and another testified she incorrectly budgeted the second by mistake and without orders from McGuiness, according to trial testimony.
Leading up to trial, prosecutors made multiple conflicting statements about what the auditor did and why they think it is a crime related to the structuring charge. In closing arguments, prosecutors argued that the waivers didn’t get filed because McGuiness wanted to conceal the contract from authorities that sign off on such waivers.
McGuiness was also found guilty of official misconduct, a misdemeanor that goes along with the guilty verdicts for conflict of interest in structure.
Much of the trial also focused on former employees testifying about an office that was rife with tension and division, the foundation of the witness intimidation felony that the jury felt McGuiness was not guilty of.
Prosecutors presented documents showing McGuiness being granted authority to monitor some employee emails. Former employees spoke about being made to chant “confidentiality” as the office’s motto at the start of staff meetings.
Some who were working while feeding information to investigators felt they were subjected to unfair reprimands.
Prosecutors contended this was felony witness intimidation, a charge that required McGuiness to both know she was under investigation and take malicious actions aimed at dissuading witnesses’ participation in such an investigation.
Wood argued McGuiness didn’t know she was under investigation until she was subpoenaed by state investigators shortly before her indictment, that the email snooping could not be considered intimidating because the employees didn’t know about it and that reprimands handed down were for legitimate reasons.
This is a developing story. Check back for more details.
