Did Delaware prosecutors violate auditor’s civil rights and defame her over criminal charge that judge tossed?

While Kathy McGuiness appeals her official misconduct and conflict of interest convictions, she’s suing over false statements made against her.

Side by side headshots of Kathy McGuiness and Kathy Jennings

Former state auditor Kathy McGuiness (left) accused Attorney General Kathy Jennings (right) and aides of violating her civil rights and slander. (State of Delaware/file)

Did false statements used in 2021 by Delaware Attorney General Kathy Jennings’ chief investigator to get a search warrant for then-state auditor Kathy McGuiness’ records violate her constitutional rights?

Did Jennings and one of her top prosecutors slander McGuiness by making similar public remarks after prosecutors secured an indictment charging her with abusing her office?

Those are the accusations in a federal lawsuit filed this week by McGuiness, who is also appealing her July 2022 conviction on two misdemeanors to the state Supreme Court. Oral arguments before the justices are scheduled for September.

A Kent County jury convicted the first-term auditor of official misconduct and conflict of interest in hiring her daughter to a remote part-time job that continued while she attended the College of Charleston in South Carolina.

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Jurors also found her guilty of illegally structuring a state contract with a former campaign consultant to avoid state financial oversight, but a Superior Court judge reversed that conviction on appeal.

Jurors had acquitted her of felony theft and intimidation charges.

Kathy McGuiness leaving the courthouse
Then-state auditor Kathy McGuiness (in white coat) leaves courthouse with attorney Steven Wood after an April 2022 hearing in her criminal case. (Cris Barrish/WHYY)

McGuiness had campaigned for re-election while under indictment and after her conviction, but was defeated in last September’s Democratic primary in a race where her crimes took center stage.

Her four-year term as the state’s financial watchdog was supposed to end in January but she resigned in October after she was sentenced to probation and fined $10,000.

The lawsuit filed in U.S. District Court in Wilmington focuses on how Jennings sought to build the illegal contract structuring charge.

The crux of the allegations is an assertion made by Jennnings’ chief investigator Frank Robinson in an affidavit of probable cause. That allowed investigators to search financial, personnel, and other files from the auditor’s office, plus video footage, and to seize the work computers of Kathy and Saylar McGuiness.

Among other accusations, Robinson wrote that five payments to My Campaign Group in August and September 2020 were made below the $5,000 threshold that needed approval from the state Division of Accounting. A state magistrate approved the warrant application.

The truth, however, was that the Campaign Group only received two payments those months, and both were above $5,000 and approved by the Division of Accounting, the lawsuit said.

Not only were those payments processed correctly, but Robinson had that information when he filed the warrant application. He admitted as much during a pretrial suppression hearing under questioning by defense attorney Steven Wood.

“You told the court under oath there were multiple payments under $5,000 in September, correct?’’ Wood asked.

“Correct,’’ Robinson replied.

“That’s false,’’ Wood said.

“Correct,’’ Robinson said.

“And you knew it when you wrote the search warrant, right?” Wood asked.

“Correct,” Robinson said again.

The investigator also admitted he made similar false statements in the affidavit when describing the August payments.

The judge ultimately ruled that the state could not use any information obtained about those payments, but could use other information about the contract.

Did Jennings defame McGuiness during news conference?

The second count in the lawsuit centers on a news conference held by Jennings and prosecutor Mark Denney in front of the New Castle County Courthouse in Wilmington on the day McGuiness was indicted in October 2021.

The lawsuit says Jennings and Denney, who headed the Division of Civil Rights and Public Trust, made damaging and untrue statements in saying that McGuiness gave her 2018 campaign consultant a “sweetheart deal by manipulating [the] pay structure to avoid public scrutiny and direct payment overview, particularly by the Division of Accounting.”

The lawsuit cites several of their comments from the press briefing, including when Jenning said, “The defendant also illegally structured a series of payments to My Campaign Group to remain under the state approval threshold.”

By repeating false claims, the lawsuit charges, Jennings and Denney “intentionally or recklessly failed to determine the truth of the defamatory matter’’ because records their office either had in their possession or had access to showed otherwise.

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The lawsuit also said Jennings and Denney had trumpeted their “complete knowledge of the facts of the investigation and allegations in the indictment.”

Denney had told reporters that the indictment was “as thorough” as any in state history and Jennings said she was “laser beam focused” on the facts of the case.

The lawsuit claims the statements by Delaware’s chief prosecutor and Denney, who then headed the office’s Division of Civil Rights and Public Trust, were defamatory and harmed McGuiness financially.

The lawsuit asks jurors to award McGuiness unspecified attorney’s fees as well as actual and compensatory damages.

Jennings would not agree to an interview but her spokesman Mat Marshall dismissed the allegations.

“This is yet another sad, desperate, and wasteful attempt by the auditor to change the consequences of her own actions,’’ Marshall said. “We’ve heard this tirade from [McGuiness] before and it was rejected by a jury of her peers. The fact that she continues to proclaim her innocence now is not news.”

Denney, who recently left the Attorney General’s Office for private practice, expressed similar sentiments.

“The lawsuit is frivolous and nothing more than a rehash of old, failed arguments,’’ Denney said.

But attorney Ronald Poliquin, who represents McGuiness, scoffed at the response by the state’s Department of Justice.

“For them to come out and say this has no merit, that this is a waste of time, is kind of shocking,’’ Poliquin said.

The lawyer said Jennings and her aides need to be held accountable for misleading judicial authorities and the public.

Ronald Poliquin
Attorney Ronald Poliquin, who represents McGuiness in the civil case, says the AG’s office needs to pay for their false statements. (Courtesy of Ronald Poliquin)

“Frank Robinson provided a sworn affidavit to the judge with false information to secure a search warrant against the former auditor. We know that’s false’’ from Robinson’s own testimony, Poliquin said.

“That information and that search warrant provided the basis for the indictment on the structuring charge and also provided the basis for the statements made by Mark Denney and Kathy Jennings.”

Poliquin said a federal civil jury should decide whether the allegations have merit.

“You’re never going to restore Kathy McGuiness to what she was, but we’re trying to hold these people accountable in some small way,” Poliquin said. “They violated her civil rights and they slandered her and they had information contrary to what they were saying the whole time.”

Poliquin said he’s eyeing a reversal by the high court of the other crimes jurors did find his client guilty of, but added that the structuring charge should never have been brought.

“Look at how much time and effort and resources and money were spent on the structuring charge,’’ Poliquin said.

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