Local News

The Seattle Times political team explores national, state and local politics.

Ever since the news broke that state auditor hopeful Troy Kelley settled a potentially embarrassing lawsuit last year, the candidate has been trying to downplay the incident.

“This is standard business practice,” Kelley said last week in an endorsement interview with The Seattle Times editorial board, referring to the suit, which accused him of “fraudulently transferring funds, intentional spoliation of evidence, shady business schemes, tax evasion, and hiding from creditors” $3.8 million in newly formed accounts.

But Kelley has so far declined to say how much he paid to settle what he calls a “nuisance lawsuit,” citing the settlement’s confidentiality agreement.

Now, the business customer that got money in the settlement says it’s willing to revoke the confidentiality agreement and make the details of the deal known — if Kelley agrees.

Scott Smith, a Seattle attorney representing Old Republic National Title Co., sent a letter to Kelley last Friday asking if he is willing to waive the confidentially agreement.

“Troy Kelley has been commenting that the lawsuit was frivolous, that this happens all the time —  implying the lawsuit is without merit,” Smith said in an interview with The Seattle Times. “If that’s true, then he ought to be interested in disclosing to the public what the (settlement) amount was. Old Republic Title is willing to do that.”

Kelley, the owner of an escrow-services company and a three-term Democratic state representative from University Place, received the letter Friday, according to campaign spokeswoman Cynara Lilly. He hasn’t yet decided whether or how to respond, she said.

“Beyond Old Republic and Troy Kelley, there were multiple parties involved in the lawsuit in question. Some of those parties would have to waive confidentiality as well to make any release, which is highly unlikely.” Lilly wrote in an email. “And in any case, the terms of the settlement are under a confidentiality agreement designed to protect the privacy, and in some cases, the personal information, of all parties involved and thousands of individuals.”

“The important thing here is that the underlying business dispute in question was resolved long ago and has no bearing on the race for auditor,” she added.

Kelley’s Republican opponent, Redmond business development consultant James Watkins, is seeking to make it an issue in the race. He has repeatedly brought up the lawsuit, along with another suit in which Kelley won an undisclosed settlement, as evidence that Kelley is unfit to serve.

Watkins won the August primary, although Kelley and two other Democrats split a majority (54 percent) of the vote.