Indicted Washington auditor fires key staffers

Kelley also ordered that Thomas Shapley, a part-time special assistant to deputy state auditor Jan Jutte, stop working pending his planned retirement at the end of this month.

Last week, after deliberating for several days, a federal jury in Tacoma failed to reach a verdict on 14 of 15 charges against Kelley, which included possession of stolen property and money laundering.

Prosecutors accused Kelley of pocketing $3 million in fees he should have refunded to homeowners when he ran a real-estate services business a decade ago.

"During his extended absence due to his trial, the hardworking Auditor's Office staff worked diligently to maintain high standards, fulfill the mission of the Auditor's Office and serve the people of the state of Washington," Inslee said in a written statement.

Last December, when Kelley returned from leave and Shapley switched from deputy communications director to a part-time role reporting to Jutte, Wilson stepped into Shapley's former role.

After others in the office intervened on his behalf, Kelley agreed to allow him to remain on paid leave through the end of the month, and to take a personal day on June 1, which will allow him to keep his health care through the end of June, Wilson and Jutte said.

Shapley handled press calls about the federal investigation of Kelley as it was unfolding last year, but eventually said he would no longer answer questions on Kelley's behalf, and would only answer questions related to the work of the auditor's office.

Kelley, a Tacoma Democrat, was elected in 2012 as the state official charged with rooting out waste and fraud in government.