Split decision for ex-auditor McGuiness: Delaware Supreme Court upholds 1 conviction, reverses another

Kathy McGuiness received a “fair trial,” the court ruled. She stands convicted of conflict of interest, and prosecutors are mulling whether to retry her for misconduct.

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Kathy McGuiness (left) and AG Kathy Jennings

Then-auditor Kathy McGuiness (left) was prosecuted by Attorney General Kathy Jennings. (WHYY file)

Former Delaware auditor Kathy McGuiness’ 2022 conviction for official misconduct has been overturned by the state Supreme Court, but the justices upheld the jury’s finding that she was guilty of conflict of interest.

Attorney General Kathy Jennings has not yet decided whether to retry McGuiness on the misdemeanor count of official misconduct, her spokesperson said.

“We just want to be thoughtful about our actions here, and not just do what’s reflexively the sort of first impulse,” said spokesperson Mat Marshall. “We’ll talk through it as a leadership team and figure out what’s in the best interest of the case and of the state and we’ll go from there.”

McGuiness, the first sitting statewide elected official ever charged  or convicted of crimes while in office, would not comment on the ruling. She resigned her office in October 2022 after being sentenced to probation and a fine.

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Her normally voluble attorney, former prosecutor Steven P. Wood, had an uncharacteristically terse response.

“Obviously we are disappointed with the result,” Wood said. “But we respect it and in particular we are grateful that we had an opportunity to make full argument before the Delaware Supreme Court.”

The 86-page ruling, handed down Tuesday afternoon, was a partial victory for both sides.

Wood had argued before the high court in November that “the trial that led to the convictions was profoundly unfair and unconstitutional.”

The justices ruled, however, that “notwithstanding the defendant’s inflamed rhetoric, the record amply demonstrates that she received a fair trial” from Superior Court Judge William C.  Carpenter Jr., who has since retired after 30 years on the bench.

McGuiness had filed a wide-ranging motion in a bid to have the justices toss the two guilty verdicts and clear her.

“The defendant raises a mélange of issues on appeal, including that the state failed to present sufficient evidence of the charged crimes and violated the defendant’s due process rights by suppressing exculpatory evidence,” wrote Justice Abigail M. LeGrow, who authored the decision. “We reject those arguments because they distort the trial court’s holdings or misapply the law.”

The court concluded, however, that the misdemeanor official misconduct conviction “must be reversed” because jurors should not have been presented with evidence that she illegally structured a contract with a campaign consultant to avoid a state procurement policy.

Even though jurors had convicted her of structuring, Carpenter later vacated it, ruling that while her actions violated state policy, they did rise to the level of a crime.

Chief Justice Collins J. Seitz Jr. agreed with Legrow and the other three justices — Karen L. Valihura, Gary F. Traynor, and N. Christopher Griffiths — that the conflict of interest conviction should be upheld.

But in a dissent, Seitz wrote that the official misconduct conviction should not have been reversed, arguing that Judge Carpenter did not “plainly err” when he allowed jurors to consider evidence that she had illegally structured the consultant’s contract in deciding whether to find McGuiness guilty of official misconduct.

McGuiness stands convicted of 1 of 5 original charges

Despite their differences in nuances of the law, the bottom line is that the justices have now spoken, potentially ending a two-and-a-half-year prosecutorial saga with political implications that had pitted first-term Attorney General Jennings and her office against another first-term statewide official.

Before McGuiness was charged in October 2021, political insiders had speculated that the two Democratic politicians might be candidates in the 2024 gubernatorial race to succeed Gov. John Carney, who by law can’t seek a third term. Instead, McGuiness exited the political arena the day of her sentencing, and Jennings is not seeking higher office at this time.

Unless Jennings refiles the charge of official misconduct and wins at a retrial, the end result of the unprecedented prosecution of McGuiness will be conviction on one of five counts.

McGuiness will remain convicted of misdemeanor conflict of interest over her hiring of her teenage daughter to a part-time job that continued remotely after she went to college in South Carolina.

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Beyond Carpenter overturning the structuring conviction, jurors had also acquitted McGuiness of two felonies — theft and witness tampering.

Before running for auditor in 2018, McGuiness had a long career as a pharmacist, business owner and a Rehoboth Beach commissioner.

Jennings began investigating McGuiness after whistleblowers in her office contacted prosecutors in the Division of Civil Rights and Public Trust. Jennings publicly announced the October 2021 indictment on the steps of the New Castle County Courthouse in Wilmington.

The trial was eventually moved to Kent County, where a Superior Court jury found her guilty in July 2022. While awaiting sentencing she nonetheless ran for re-election, only to get trounced in the September Democratic primary.

At her October 2022 sentencing, prosecutors sought a 30-day prison sentence for McGuiness and $30,605 restitution to the state, citing her lack of remorse and other aggravating factors. Carpenter gave her a year of probation, 500 hours of community service, and a $10,000 fine.

Although she had three months remaining in her four-year term, McGuiness resigned a few hours after the sentencing. That occurred after Carney, a fellow Democrat, indicated he would exercise his constitutional duty to remove her after sentencing.

Jennings did not agree to an interview about the ruling but issued a statement that said it was a vindication of her decision to bring the public corruption case.

“After more than two years of endless litigation and theatrical rhetoric, the bottom line is that a jury, a Superior Court judge, and now the Delaware Supreme Court have all concluded that the ex-auditor’s actions were criminal,” her statement read.

Jennings added that “above all else, I am inspired by the courage of the whistleblowers who came forward to seek justice.”

While the criminal case might be over, a civil lawsuit by McGuiness against Jennings and others in her office is pending in U.S. District Court in Wilmington.

The federal lawsuit, filed in August 2023, claims her constitutional rights were violated when the chief investigator in Jennings’s office made false statements to get a search warrant for her office records. McGuiness also charge s that Jennings and then-prosecutor Mark Denney slandered her by making similar public remarks after she was indicted.

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