Missouri auditor Galloway sues state board over investigation prompted by Hawley audit

Missouri State Auditor Nicole Galloway is suing a state licensing board that investigated her at Sen. Josh Hawley’s request, after her office conducted an audit that concluded Hawley may have used public resources during his time as Missouri Attorney General to successfully campaign for U.S. Senate.

Her lawsuit, filed in Cole County Circuit Court, accuses the State Board of Accountancy of threatening to professionally discipline her and her staff for failing to protect the confidentiality of Hawley’s former office as a “client.”

She’s seeking a court’s declaration that the accountancy board’s powers and client confidentiality laws do not apply to government agencies reviewed by the state auditor.

“Allowing the Board to assume authority over state audits and for this disciplinary action to continue risks the license of every certified public accountant of the State Auditor’s Office and has a chilling effect on every audit and public report issued by the office,” attorneys for Galloway’s office wrote in the complaint.

The board’s director, Patty Faenger, did not response to a request for comment. A spokesperson for the Missouri Department of Commerce & Insurance, which houses the accountancy board, said the department had not been notified of a lawsuit Wednesday afternoon.

Galloway, the only statewide elected Democrat, began a legally required “close out” audit of the Attorney General’s Office in late 2018 after Hawley, a Republican, won election to the U.S. Senate. The review was also encouraged by Republican Secretary of State Jay Ashcroft, who asked for Galloway’s help in determining whether Hawley should be prosecuted for violating a state law barring elected officials from using public funds to support political campaigns.

The probes concerned Hawley’s use, beginning in January 2017 shortly after he was sworn in as Attorney General, of out-of-state political consultants to help direct the office, giving taxpayer-paid staff directions on raising Hawley’s image and profile. The same advisers went on to run Hawley’s 2018 campaign that unseated Democratic Sen. Claire McCaskill. The Kansas City Star first revealed the arrangement in October 2018.

In February 2020, Galloway published the audit, finding that Hawley “potentially used state resources for political purposes.” Whether he broke the law was unclear, however, because he and his staff regularly used private emails and text messaging to conduct official business. The published report included transcripts of depositions with former staff, emails, financial records and other documents. The release of the transcripts, not unprecedented but a departure from usual practice, added to the politically-charged atmosphere surrounding the audit.

At the time, Galloway was running to unseat Republican Gov. Mike Parson, and Hawley cast the probe as politically motivated. He filed a complaint with the accountancy board, which agreed to investigate the matter last September. Hawley called Galloway’s office’s hiring of a former McCaskill campaign manager “deeply inappropriate;” Galloway said the staffer was not involved in the audit.

Galloway, in turn, called the investigation of her biased, pointing out the board is comprised of Parson appointees and campaign donors.

In her lawsuit, Galloway said the board has “absolved [her] of all the allegations in Josh Hawley’s complaint,” but sought to discipline her and her staff for release of the audit’s details. The board cited a state law requiring licensed certified public accountants to get their “client’s” consent before publishing information about audits.

Galloway said that in July the board offered a settlement that would have asserted that the agencies she audits are “clients.” She said the board indicated it would pursue a complaint against her in an administrative court if she did not accept the terms. She filed the lawsuit instead.

“The purpose of a published report is to make public that which may have evaded public scrutiny,” her lawsuit states. “The Board’s misinterpretation leads to reduced government transparency for an office whose core responsibility is transparency.”

In response to the lawsuit, Hawley on Twitter renewed his accusation that Galloway’s audit was biased.

“End the culture of corruption,” he wrote. “Resign.”

Galloway announced in June that she would not be a candidate for office in 2022. Her term ends in early 2023.