Judge tosses 1 McGuiness conviction, upholds 2 others

Charlie MegginsonHeadlines, Government


State Auditor Kathleen McGuiness, left, and her attorney, Steve Wood. Photo by Charlie Megginson/Delaware LIVE

The judge who oversaw the trial of Delaware State Auditor Kathy McGuiness has thrown out one of the jury’s three guilty verdicts. 

He upheld their guilty verdicts on the other two charges and denied McGuiness’ request for a new trial.

On July 1, McGuiness was found guilty on three misdemeanor charges of official misconduct, structuring and conflict of interest. 

The jury found her not guilty on felony charges of theft and intimidation.

Superior Court Judge William Carpenter, Jr. on Tuesday upheld the jury’s guilty verdict on the official misconduct and conflict of interest charges. 

He found “insufficient evidence” to convict McGuiness on the structuring charge and granted her motion for a judgment of acquittal. 

A DOJ spokesperson said they would reserve comment until McGuiness is sentenced.

McGuiness’ attorney said the auditor will appeal her remaining convictions to the Delaware Supreme Court after she is sentenced.

Read the ruling here.

Structuring conviction thrown out

McGuiness asked that the structuring conviction be thrown out because, in order to break the law, a contract would have to be fragmented into multiple separate contracts with the intent to circumvent the state’s procurement code. 

At the time of the alleged offense, the procurement code required contracts over $50,000 to go through a public bidding process.

Fragmenting payments within one contract does not satisfy the elements of the crime, McGuiness’ legal team argued. In order to be found guilty, she would also need to have intended to break the law or known that she was breaking the law.

The judge said the prosecution changed its theory on the charge after it became clear McGuiness did not fragment a contract to keep it beneath $50,000, negating the need for a public bidding process.

The contract in question was properly executed, the judge ruled, because at the time it was signed, it was for an amount less than $50,000.

“And the fact that at the end of the contract, the total amount exceeded the $50,000 threshold amount is irrelevant,” Carpenter wrote. “While the Defendant’s conduct is arguably improper pursuant to the relevant accounting rules, the Court cannot find that any violation of those rules is criminal.”

He said, “it appears that the evidence produced shows no more than an improper accounting procedure followed by the Defendant’s office, during a time when there was high staff turnover and delays in employee training complicated by the COVID-19 pandemic.”

The judge called the matter a “comedy of errors,” the result of McGuiness relying on her staff to ensure the contract was paid according to the law.

“Unfortunately, her Chief of Staff was inexperienced and while perhaps politically savvy, lacked any degree of reasonable sophistication as to the inner workings of the State’s accounting procedure,” Carpenter wrote. 

Conflict of interest conviction sticks

The jury found McGuiness guilty of violating the state officials’ code of conduct by hiring her daughter, Saylar McGuiness, and affording her benefits not available to others, including the ability to work remotely while in college, drive a state vehicle and “bank hours,” then apply them to weeks during which she did little or no work.

McGuiness argued that she acted within the law when she hired her daughter. Other employees were allowed to work remotely, use the state vehicle and bank hours, she said. 

Carpenter emphasized that there is no law prohibiting a state officer such as the Auditor from hiring a close relative. 

“However, when this occurs, the state officer must remove themselves from the hiring decision and allow the normal administrative function of the office to make the decision, particularly when they have a personal or private interest in that decision,” he wrote. 

McGuiness did not.

Carpenter said the evidence clearly showed that McGuiness participated in both the hiring and supervision of her daughter as a part-time worker in 2020. He said it appears Saylar McGuiness did not sit for a formal interview and was hired at her mother’s insistence.

One way to violate the law is for a close relative to accrue a financial benefit to a greater extent than others who are similarly situated.

“Even when evidence regarding the use of state vehicles, the ‘banking’ of hours, or the work performed by [the] daughter is removed, the bottom line, which is undisputed, is that [the] daughter was allowed to continue to work after she left Delaware to attend college in Charleston, South Carolina and received payments during those months,” Carpenter said.

The extra salary earned while Saylar McGuiness was away at school is a sufficient financial benefit that was not granted to other part-time workers during the same timeframe, according to Carpenter’s ruling.

“In sum, Defendant’s poor judgment allowed a close relative to receive a greater financial benefit than others similarly situated and there can be no other reasonable conclusion based upon the facts presented during the trial,” he wrote. “Therefore, the Court will not disturb the jury’s decision.”

Official misconduct conviction upheld

The official misconduct charge required the state to prove to the jury’s satisfaction that McGuiness knowingly and willfully abused the powers of her office to enrich herself or disadvantage someone else. 

Carpenter said it was clear during the trial that McGuiness had a different view of the role of the Auditor’s Office from her predecessor and intended to dramatically increase the public knowledge and perception of the office. 

That led to increased use of social media, the implementation of special reports regarding various functions of state government, and participation in a regional effort to ensure the appropriate use of COVID-19 relief funds, he said.

“These efforts raised the prominence of the office and in return the Defendant personally and were critical to the decisions to hire her daughter who had social media skills at least beyond those in the office and enter into the contract with Christie Gross” of My Campaign Group, he wrote.

For that reason, it’s clear that hiring Saylar McGuiness and entering a contract with My Campaign Group were done, at least partially, to directly and personally benefit McGuiness, the judge said.

The final element of the crime is for McGuiness to have performed official functions in a way designed to benefit “her property or financial interest.”

“While an odd term to use in the context of Official Misconduct, the Court believes the word ‘property’ was intended to be broad in scope and would encompass benefits beyond those of a financial nature,” Carpenter wrote. “This would include reputation, status, effectiveness, and perhaps even in the context of an elected official, one’s electability.”

He said the evidence leaves no question that the efforts made in social media and communication were intended to promote McGuiness individually. 

“Whether this conduct was reasonably justified in the performance of her official function was one for the jury to decide,” he wrote. “The Court, however, finds the State has presented sufficient evidence to support this element of the offense and the jury had a reasonable basis to render a guilty verdict on this count.”

Request for new trial denied

McGuiness’ legal team raised several arguments to support her motion for a new trial.

First, her attorney said the state committed multiple Brady violations.

According to Cornell Law School’s Legal Information Institute, the Brady rule, named after Brady v. Maryland, 373 U.S. 83 (1963), requires prosecutors to disclose materially exculpatory evidence in the government’s possession to the defense. 

That “includes any evidence favorable to the accused — evidence that goes towards negating a defendant’s guilt, that would reduce a defendant’s potential sentence, or evidence going to the credibility of a witness.”

McGuiness said the state withheld such evidence throughout the trial.

“This adversely affected the Defendant’s ability to prepare and present her case, including her ability to conduct necessary investigations,” her request for a new trial said. “There is no question that the guilty verdicts in this case are not worthy of confidence.”

Carpenter said that “when you cut through the Brady shouting that has occurred nearly every time the defense received documents from the State,” McGuiness’ real complaint is that she was not given sufficient time to review large volumes of material provided to her months before the trial. 

He said it’s important to note that the documents in question are ones that were contained on McGuiness’ laptop in her office.

Prosecutors should have cloned the material from the computer and either returned the copies or the computer itself to McGuiness and her attorneys.

“This would have allowed all parties to have timely access to its contents and to search the material for relevant documents well before trial,” he wrote. “Unfortunately, that did not occur here.”

The judge did, however, limit the use of documents in the state’s case that were produced after March 31, 2022, he said. He also, on numerous occasions, gave McGuiness the option to delay the trial until the fall of 2022 to allow for a more thorough review of the documents provided. 

“The Court appreciates that other ‘election’ factors were in play, but the decision to move forward was at the insistence of the defense and not the Court,” Carpenter wrote. “In addition, due to the decision to reindict the case in Kent County and to hold the trial in that forum, there was an additional delay of several weeks before the trial began.”

While the Brady rule requires disclosure, it does not require a “‘hand-me-on-a-plate’ roadmap to all documents,” he said.

Carpenter said it was McGuiness, whether intentionally or not, appeared to have withheld evidence that could have helped her case.

In her motion for a new trial, McGuiness’ defense said it had discovered several additional part-time workers who were allowed to continue working while attending college.

“Certainly, the Defendant would have appreciated that the unique attending college/working situation would call into question the benefits provided to Daughter that other similarly situated individuals had not been provided,” he wrote. 

Because those individuals were unknown to prosecutors and therefore not interviewed, it’s not something the state should or could have been aware of, the judge said.

There are three explanations for the omission, Carpenter said: “either counsel was not discussing this issue with his client, the client was not being candid with counsel or perhaps the Defendant amazingly had a total lack of awareness of the importance of this issue.”

“What is even more remarkable is it appears these two casual/seasonal employees were allowed to work from college in 2021, almost a year after the Defendant’s daughter was given that same benefit,” he wrote. “The Court can only assume that since the Defendant allowed this conduct by Daughter, she felt it was appropriate to approve the request for these two other individuals.

“Unfortunately for the Defendant, consistent bad judgment does not make it right.”

McGuiness also argued in her motion for a new trial that Carpenter erroneously admitted inadmissible character evidence, allowed the prosecution to shift their theory on the structuring charge, and made inappropriate comments on the state’s witnesses that may have influenced the jury.

Carpenter defended himself against the suggestion that he admitted bad evidence.

“From the beginning of the case, the State has asserted the Defendant was aware she was under investigation well before the execution of the search warrant. Therefore, it was clearly appropriate and fair to allow the State to introduce evidence that would support this assertion,” he wrote. “Further, simply because the Defendant asserts that she first learned of the investigation in June of 2021 does not mean it is true.”

As for the complaint about the state’s shifting theories on the structuring charge, Carpenter tossed that conviction, rendering the complaint moot.

Carpenter rejected McGuiness’ charge that he made an unconstitutional and impartial comment when he criticized her attorney for questioning a DOJ investigator’s honesty during his investigation.

He didn’t disclose the true scope of his investigation to witnesses he was interviewing, something McGuiness’ attorney pointed to in painting the investigator as a liar.

During the trial, Carpenter criticized his line of questioning.

“If you want to pursue this, we all know what this is. It’s an investigative technique used by the officer,” Carpenter told McGuiness’ attorney. “You want to ask him that, that’s fine. But to imply that because this is false, he is lying — that’s simply unfair, Mr. Wood. So you can ask him about investigation techniques if you’d like. But to imply it otherwise is not acceptable.” 

In his ruling Tuesday, Carpenter said his comment did not undermine the defense’s theory of unfair investigation nor the questioning of the officer’s tactics, but simply “put a stop to a line of questioning that was belabored and the subject of previous cross-examination of the witness by defense counsel.”

“While it is not uncommon for a defendant to attempt to blame others when the outcome of the trial was not as they hoped, the weeks of pounding the idea of a flawed investigation was so overwhelming and so pronounced it lost its effectiveness,” he continued. 

“Reasonable questions regarding the manner in which the investigation was conducted are fair. But, to consistently call the investigator a liar and to attempt to mislead the jury as to his conduct, not only once but multiple times, and to now suggest the Court’s comment would have affected the jury’s decision, is nearly laughable.”

Even if his comments had swayed the jury, Carpenter said he specifically instructed the jury to come to a verdict only on the evidence and not based on comments by either attorney or the judge. 

McGuiness responds

“We are gratified that, together, the jury and the Court have now correctly acquitted Kathy McGuiness of three of the five charges that the State brought against her,” McGuiness’ attorney, Steve Wood, said in a written statement.

He said the structuring charge “has always been nonsense” and expressed gratitude that the court “finally put an end to the State’s baseless attempt to find a crime where none was committed.”

“We are disappointed by the Court’s decision not to acquit Ms. McGuiness of the two charges that relate to the hiring of her daughter as a casual-seasonal employee,” Wood added. “Delaware law does not prohibit the hiring of close relatives. The practice is common throughout state government, and there are at least four current members of the General Assembly whose children worked at Legislative Hall.”

During appeal, McGuiness will “point out the legal and factual errors that led to her being wrongly convicted for a crime that she did not commit,” Wood said.

Lawmakers react

In a statement from the Delaware Senate Democratic Caucus, party leaders recalled that they encouraged McGuiness to resign when she was first indicted on criminal charges in late 2021. They called on her to resign again when she was found guilty in July 2022.

“After she repeatedly refused to put the public’s interests ahead of her own, we held a special session where the Senate voted to call on Governor John Carney and our colleagues in the House to begin removal proceedings, a Constitutional power granted to the General Assembly that was dismissed as political theater,” they said. “Delawareans have had enough.”

They said McGuiness “owes it to the people of Delaware to do what is right and step down before she is forced out of the elected office that the Attorney General, a jury and a Superior Court judge all agree she used to violate the public’s trust.” 

House Majority Leader Valerie Longhurst and Majority Whip Larry Mitchell followed with a condemnation of their own.

“The state Auditor, elected by the people of Delaware to serve in the public trust, was found guilty by a jury of her peers of criminal acts in her official capacity, and today a judge has rendered the final verdict,” they said. “When these criminal allegations, now proven in a court of law, were brought forth, we joined those who called for her to step down. Today, we reiterate our call for her resignation.

“If she refuses to do so, the Governor is required to remove her from office at the time of sentencing in accordance with the Delaware Constitution,” they said. “The people of Delaware deserve better.”

McGuiness’ primary opponent, Lydia York, issued a similar statement.

“The decision to convict Mrs. McGuinness [sic] for crimes committed in the course of her duties as the Auditor of Accounts show plainly that she cannot continue serving as an elected official,” York said. “I trust that the electorate of the Democratic Party will see fit to remove her from office if she does not go of her own accord. I am a lifelong Democrat and I believe that we should clean up our own house.”

What’s next

McGuiness will be sentenced. It’s not clear when that will happen or what the penalty will be, but she continues to run for re-election and has said she is undeterred by the jury’s verdict.

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