Daughter testifies at corruption trial of Delaware auditor

DOVER, Del. (AP) — The daughter of Delaware State Auditor Kathy McGuiness testified Wednesday at her mother’s criminal corruption trial, saying she earned her pay after being hired for a part-time job in the auditor’s office but was treated poorly by other staffers.

Elizabeth McGuiness, 20, was called as a prosecution witness after reaching a limited immunity agreement with prosecutors shielding her from any repercussions regarding conflicting statements she had previously made to investigators, including denying she used her personal phone or personal email account for work.

Kathy McGuiness, a Democrat elected in 2018, is responsible as state auditor for rooting out government fraud, waste and abuse. She is being tried on felony counts of theft and witness intimidation, and misdemeanor charges of official misconduct, conflict of interest and noncompliance with procurement laws.

Prosecutors allege, among other things, that McGuiness hired her daughter and her best friend as temporary employees in 2020, even though other temporary employees had left because of the lack of available work amid the coronavirus pandemic.

Authorities allege that in hiring her daughter and exercising control over taxpayer money with which she was paid, McGuiness engaged in theft of state money and conflict of interest.

Elizabeth McGuiness, who has not been charged with any crime, testified under questioning by prosecutor Maria Knoll that she and her best friend applied for “casual-seasonal” jobs in her mother’s office in February 2020 and began working there the following May.

McGuiness could not recall details of how she learned about the job or what she was asked when interviewed by her mother’s chief of staff, but she acknowledged under cross-examination by her mother’s defense attorney, Steve Wood, that she was pretty certain she would get the job.

McGuiness said her duties included “a lot of editing of reports, presentations and newsletters, as well as graphic design and social media work. Prosecutors allege that she continued to be paid after leaving for college in the fall of 2020, but McGuiness said she continued work a few hours a week on projects while at school, and also got paid for hours she had “banked” after exceeding her weekly maximum of 29.5 hours while working long summer hours at the Delaware State Fair.

“I was able to continue the data entry and more adds from the future social media,” McGuiness told her mother in a September 2020 email from her personal email account. “I won’t be able to do more than 10 hours a week since I am in school and my excess hours end the week of the 20th.”

Under cross-examination by Wood, McGuiness denied billing the state for hours she did not work and said she worked every hour for which she was paid. She also told Wood that she was treated poorly by other staffers in the auditor’s office, saying that they had “gotten a distaste” for her and her friend and co-worker, Virginia Bateman “right off the bat.”

In earlier testimony, the owner of a consulting firm hired by Kathy McGuiness in late 2019 under a no-bid contract said staffers in the auditor’s office were incompetent and pushed back on reforms Kathy McGuiness wanted to make after her predecessor’s 30-year tenure.

“It was a very toxic culture,” said Christie Gross, adding that she never had any conflict with McGuiness herself.

Gross testified that she eventually stopped working for the auditor’s office in 2021, after having successfully bid on a second contract. She said the final straw came after she spent several late-night hours correcting numbers in a budget request to be presented to state lawmakers, only to see the old numbers put back in. After complaining to McGuiness, Gross was assured by the auditor’s chief of staff that the right numbers would be restored, only to discover by accident that they were not.

“When I saw it, I just decided it was too much for me to continue,” said Gross, who described the auditor’s office as a “disaster” that “lacked professionalism.”

Prosecutors have alleged that McGuiness orchestrated a no-bid “communications services” contract for Gross’ consulting firm, My Campaign Group, which she had used as a campaign consultant when running for lieutenant governor in 2016. They also said she deliberately kept the contract payments under $5,000 each to avoid having to get them approved by the Division of Accounting.

Gross testified that McGuiness never told her to submit a bill for less than $5,000, and that she didn’t even know about the $5,000 reporting threshold until after McGuiness had been indicted.

McGuiness also is charged with intimidating and retaliating against employees who reported her alleged wrongdoing or who she believed might be cooperating with investigators.

Prosecutors allege that the intimidation, which included monitoring employees’ emails, began as early as March 2019, even though McGuiness was not told until September 2021 that she was the subject of a criminal investigation.