No Taxpayer-Funded Private Attorney for Indicted Delaware Auditor, Judge Says

A judge has refused to allow taxpayers to foot the bill for a private attorney representing Delaware’s state auditor on criminal corruption charges.

Superior Court Judge Jan Jurden ruled Thursday that State Auditor Kathleen McGuiness is entitled to a public defender, but that she is not entitled to a private attorney at taxpayer expense.

McGuiness, who is responsible for rooting out government fraud, waste and abuse, was indicted earlier this month on felony counts of theft and witness intimidation, and on misdemeanor charges of official misconduct, conflict of interest and noncompliance with state procurement laws.

McGuiness, through her attorney, has denied the allegations and maintains that she has done nothing wrong. She has rejected requests from some fellow Democrats to resign, or to at least take a leave of absence pending resolution of the case.

McGuiness has been represented by Steven Wood, a white-collar defense attorney who previously served as Delaware’s chief state prosecutor.

Wood, who began representing McGuiness roughly a month before she was indicted, filed a motion just days after the charges were announced asking that taxpayers pay McGuiness’ defense costs. He cited a Supreme Court rule under which a state officer or employee named as a defendant in a civil or criminal case can petition for appointment of a lawyer. The rule includes a provision allowing for the appointment of a private attorney if representation by the attorney general’s office would present a conflict or potential conflict of interest.

Wood argued that such a conflict exists in McGuiness’ case because the attorney general’s office is prosecuting her. He sought payment at taxpayer expense at an hourly rate of $550 per hour, noting that McGuiness has “limited resources.”

Prosecutors opposed the motion, noting that McGuiness is paid a salary of $112,000, has loaned her political campaigns more than $75,000, and owns a house estimated to be worth between $2.2 million and $3.7 million.

They also argued that the Supreme Court rule regarding appointment of counsel is trumped by a provision in state law. That provision states that if a judge finds that the Department of Justice is unable to represent a public officer or employee in a criminal case, the court can may appoint an attorney from the Office of Defense Services, commonly known as the public defenders office.

“Compensating a wealthy defendant’s law firm by several times the court’s standard fees would metastasize the statutory entitlement into something absurd,” wrote Chief Deputy Attorney General Alexander Mackler.

Jurden sided with the state, ruling that the language of the statute is “clear and unambiguous” and appointing the Office of Defense Services to represent McGuiness.

Wood did not immediately respond to email and phone messages Thursday.

The criminal charges against McGuiness include allegations that she hired her daughter and one of her daughter’s friends, both high school seniors at the time, as temporary employees in May 2020, even though other temporary employees had to leave their positions because of a lack of available work amid the coronavirus pandemic.

Authorities said Elizabeth McGuiness, who has not been charged, continued to be paid even after enrolling at a college in South Carolina last August. Payments to McGuiness’ daughter totaling $19,000 were deposited into a bank account for which McGuiness is a listed owner.

McGuiness also is charged with orchestrating a 2019 no-bid contract for a company she had used as a campaign consultant when running for lieutenant governor in 2016. Investigators said she evaded public bid requirements by keeping the initial contract with My Campaign Group just under the $50,000 threshold that requires public bids. They said she also avoided getting approval from he Division of Accounting, a separate state agency, for the payments to My Campaign Group by splitting up invoices and keeping payments under the $5,000 reporting threshold.

Authorities said that when employees in her office became aware of McGuiness’ misconduct, she responded by trying to intimidate the whistleblowers, including submitting more than three dozen requests to the Department of Technology and Information for the contents of their email accounts. That allowed McGuiness to monitor several employees’ email communications in real time, according to prosecutors. They said McGuiness also monitored the email of a former employee who now works in a separate government agency.