State Auditor Kathleen McGuiness was found guilty of three misdemeanors – conflict of interest, official misconduct and noncompliance with state procurement law – by a jury July 1 in the state’s criminal case against her. She was found not guilty on the felony charges of theft and intimidation at the end of the nearly three-week trial that began June 14.

State prosecutor Mark Denney declined to comment on the historic case – the first time a seated elected official has been convicted. Following the jury’s decision, Attorney General Kathleen Jennings sent out a press release thanking the jury and the prosecution team for their work.

"From the moment I took office, I promised that no one would be either above the law or beneath justice. Today’s guilty verdict confirmed that. After weeks of grueling trial and mistreatment of whistleblowers, the state auditor – whose job is to protect our state from waste, fraud and abuse – has been found guilty of three crimes by a jury of her peers,” Jennings said. “I am grateful for the jury’s judgment, for the excellent work of our trial team and, above all else, for the courage of the whistleblowers and witnesses who came forward and made accountability possible. Our office’s – and the jury’s – message is clear: Abuse of office will not be tolerated in Delaware.”

Sentencing will be held at a future date, and at the most, McGuiness could face up to one year in prison for each misdemeanor. Her attorney Steve Wood said he thinks it is doubtful she would get anything more than probation when sentenced. He also said he plans to file a motion for judgment of acquittal on all counts, a motion for a new trial, and appeal the case to the Delaware Supreme Court.

Mat Marshall, spokesman for the Department of Justice, said misdemeanor convictions do not preclude a candidate from running for elected office. “The Supreme Court ruled in the Capriglione appeal that the dividing line was a felony; anything beyond that is up to the General Assembly,” Marshall said.

The General Assembly has yet to take action on the state auditor’s case, but both House and Senate leadership issued statements following the verdict, reiterating previous calls by the Democratic Party and leadership for McGuiness to step down.

Senate President Pro Tempore Dave Sokola, Senate Majority Leader Bryan Townsend and Senate Majority Whip Elizabeth “Tizzy” Lockman issued a joint statement calling on McGuiness to resign immediately. 

“Today a Kent County jury found State Auditor Kathy McGuiness guilty on three counts that, taken together, show a brazen willingness to circumvent the same open government laws and accounting standards she was elected to enforce. When Auditor McGuiness was charged in November, the Senate Majority Caucus immediately called on her to take a leave of absence, citing concerns about her ability to execute her official duties given the gravity of the transgressions outlined in the indictment. Now that she has been found guilty of official misconduct, illegally structuring contracts to flout procurement laws, and conflict of interest, we call on her to resign immediately. Any public official engaged in these behaviors is unfit for public office, but especially the state’s top financial watchdog. While Auditor McGuiness considers her options and political future, the Delaware state Senate will carefully consider its constitutional role in ensuring accountability and that the best interests of Delawareans are served.”

House Democratic leadership echoed the Senate statement.

"We put our trust in our elected officials – especially those whose responsibility is to serve as a watchdog for the state's finances – and when you lose that trust, you cannot serve in that position any longer. Since the auditor was initially charged, we have maintained that we should wait and let the legal process play out. It has, and the auditor has been found guilty of several crimes that call into question her fitness to serve in this office. As a result, the auditor should step down from her position and resign immediately,” wrote House Majority Leader Rep. Valerie Longhurst, D-Bear, and House Majority Whip Rep. Larry Mitchell, D-Wilmington. 

They continued to say Gov. John Carney must take the next step by exercising the powers he has under the Delaware Constitution to remove from office any public officer convicted of misbehavior in office. “She cannot continue to serve in this position, and the governor can take action to remove her from office should she refuse to resign," they said.

In March, however, the Supreme Court provided an opinion at the General Assembly’s request that stated a hearing must be held by the Legislature, either jointly or by one house, followed by a vote by both House and Senate on a bill to address the governor in regard to removing an elected official. The bill must pass by a two-thirds vote in each house, the opinion states.

McGuiness, a Democrat who was elected in 2018, said she is still running, and she believes the charges brought against her were politically motivated. A grand jury first indicted her in 2021 on felony theft, felony intimidation, official misconduct, conflict of interest, and violation of state procurement law. Democrat Lydia York of Wilmington has filed to run for office, setting up a primary with McGuiness in September.

Wood said he respects the jury’s decision, but he believes they were influenced by errors made by the prosecution, including wording of the search warrant that led to the indictment.

“The crime of structuring as defined by the court, we have argued and will argue again, is contrary to the way the crime is defined in Delaware law,” Wood said.

Other evidence, he said, was inadmissible character reference. Several former employees testified that McGuiness monitored their emails and they received written reprimands or performance write-ups in what they referred to as retaliation.

McGuiness said she was disappointed with the decision but looks forward to working with her defense team to rectify the situation. “I was definitely hopeful for better things,” she said. “Hiring family members is not a crime.”

McGuiness said her daughter Saylar continues to work at the state auditor’s office.

Denney presented a case alleging McGuiness hired her daughter at a time when other employees left because their hours had been cut, and that her daughter’s paychecks were deposited into a joint bank account held by McGuiness and her daughter. Her daughter denied that she ever gave her mother money, and Wood submitted evidence that the bank account was a starter account commonly opened by parents for their children. The felony theft charge was linked to the shared bank account, and conflict of interest and official misconduct charges were related to the hiring of her daughter and friends.

The felony intimidation charge stemmed from allegations that McGuiness harassed employees who had complained to the Department of Justice over McGuiness hiring her daughter and her daughter’s best friend, and also over payments given to My Campaign Group.

Prosecutors said McGuiness violated state procurement law by giving the group a no-bid contract beneath the $50,000 amount that would have required a bidding process, and that invoices submitted by the group were intentionally structured beneath the $5,000 level to avoid Division of Accounting approval. On the stand, Christie Gross, owner of My Campaign Group, testified that she only billed for hours worked, and initial invoices came in under $5,000. She also said she received payments of more than $5,000.

“People who are satisfied with this verdict ought to take a close look at the process that occurred along the way,” Wood said.

McGuiness said morale in the auditor’s office is “fantastic” and she looks forward to bringing relevancy to the office – a motto she has repeated since she first took office. Looking back, she said, she would have required employees to keep better paperwork.

“We had some bumps along the way. Change is very difficult for some folks,” McGuiness said, adding now more people will know Delaware has a state auditor.