July 24, 2014

With Public Polls Favoring His Resignation, Swallow’s Case is Murky

SwallowThe news about John Swallow seems to get progressively worse.  His behavior may not have been illegal, but it skirts the line of what the public expects from elected officials enough that a plurality supports his resignation. Though none of the headlines this week has landed with the bombshell effect of that first story in the Salt Lake Tribune, every new revelation seems to further diminish the reputation of Utah’s Attorney General.


 

Investigated by the FBI and Department of Justice

Nearly two weeks after the Salt Lake Tribune broke the story, with calls for Swallow’s resignation in the air, the U.S. Attorney’s Office for Utah acknowledged that Swallow was under investigation by the Department of Justice and the FBI.

Neither the DOJ nor the U.S. Attorney’s Office typically confirms investigations, but an exception was made “because of the extraordinary public interest in this matter, we want to reassure the public that we, along with the FBI, have been investigating the allegations and will follow the facts and the law in doing so,” according to the statement.


The Money Trail

Photo Gallery    Money trail in John Swallow saga leads to friend of Sen. Harry Reid    The Salt Lake Tribune

Johnson has alleged that Swallow offered to help him pay off Reid to stop an FTC investigation into Johnson’s business. On Sunday, the Salt Lake Tribune’s Tom Harvey sketched the path Johnson’s money took, and it’s an article worth reading.

Jeremy Johnson

Jeremy Johnson

Especially interesting is the intended recipient of the money, Jay Brown, a Las Vegas attorney and friend of Senate Majority Leader Harry Reid. About Brown’s firm, the Tribune wrote that

The firm is not registered to lobby either Congress or the administrative branch. Jay Brown was registered as a lobbyist in 2010-11 for Caesers Entertainment Corp. on the issue of Internet gambling, a topic Reid has been actively involved in for several years. Brown also lobbied for a payday-loan industry trade group called the Community Financial Services Association in 2011-12, though the RMR payment to the Brown firm likely was made in December 2010. Rawle sat on the group’s board before his death.

Brown also has deep personal and business ties to Reid. In the senator’s 2009 autobiography, The Good Fight, Reid calls Brown a “longtime friend,” with the families close to the point that their kids frequently played with one another growing up. Their youngest children, Key Reid and David Brown, became best friends, the book says.

460xA close relationship between Reid and Brown is one thing, but it gets more interesting when similarities between Brown and Swallow appear. Apparently, Brown has been investigated by the FBI, as well.

The Associated Press reported in 2006 that Reid and Jay Brown engaged in questionable land deals in Nevada in which Reid earned $1.1 million on a $400,000 investment that probably violated Senate ethics rules when the Nevada Democrat failed to report his interest in the sale.

In addition, the Las Vegas Review-Journal quoted a retired FBI agent as saying Jay Brown has been a “person of interest” in separate investigations of organized crime.

“I think if you know Brown, you will have an inside track to Reid,” said Steve Miller, a former Las Vegas city councilman who now writes columns on organized crime and has written about the Brown-Reid relationship.

An odd association of individuals for Swallow to be associating with, let alone suggesting that money be routed to.

But is any of this illegal or unethical? Or does it demonstrate poor judgement?


 

Illegal? Unethical? Or just plain foolish?

When one listens to the secret recording as then Assistant Attorney General Swallow sat in an Orem donut shop talking to Johnson, it’s easy to see that there are problems here. Swallow recognizes that danger lurks in his association with this individual, as well as what the ramifications might be if the details of their relationship were publicized.  What is unclear is whether Swallow ever intended to break the law or if he had merely chosen to help out the wrong guy.  By his account, Swallow insists that he only wanted to help Johnson successfully lobby Senator Reid.

And perhaps that’s accurate. In the secret recording, it sounds like Johnson may be trying to draw Swallow out, while Swallow seems to insist that he’s only trying to help with lobbying.

“I think you may have the wrong idea,” Swallow tells Johnson at one point, adding, “I don’t know what the arrangement is, but I think, I think that they have lobbyists they pay on retainer.”

Johnson and his business associate paid Rawle $250,000.

Further, mails from 2010 show Swallow saying that

“Richard [Rawle, the individual who would arrange for the lobbyist] is traveling to LV tomorrow and will be able to contact this person, who he has a very good relationship with. He needs a brief narrative of what is going on and what you want to happen. I don’t know the cost, but it won’t be cheap,” Swallow wrote.

At this point, though, the story is a case of “he said/he said,” with Johnson’s claims that Swallow “shook him down” for money hanging in the air against the Attorney General’s claims of innocence.

Johnson says Swallow spoke with him several times about the price for such assistance, starting at more than one million dollars and negotiating down to $600,000. Even at that, Johnson says he could only scrape up $250,000, which he gave to Richard Rawle.

Over the course of the conversations, Johnson says he told Swallow paying Rawle would take all the money he had for a defense attorney, ”and his exact words were ‘trust me Jeremy, this is better than an attorney. You won’t need an attorney.’”

When the FTC sued I Works, beginning a fast process of shutting down the St. George-based company, Johnson says he went to Swallow and, again, the two talked money.

“I’m like, ‘John, I don’t understand,’ you know and then the talk started to turn to like, ‘You know Jeremy, you knew the deal, it was six hundred and you didn’t pay the whole amount.’”

With a federal indictment against him, Johnson’s motives in attacking Swallow are suspect at best, but the evidence he brings against Swallow remains. Further, revelations this week indicate that Swallow may have been closer to Johnson than he previously admitted, even going so far as to accept gifts from Johnson that may possibly run afoul of the law.

On the secret recordings, Swallow expresses anxiety about his use of Johnson’s million dollar house boat at Lake Powell.

“Do they know about the houseboat?” Swallow asks in the April 30, 2012, meeting that Johnson secretly recorded. “Is there any paper trail on that?”

“There’s no paper trail on the houseboat. Nobody knows about it,” Johnson assures him.

“There’s no email, there’s no … ” Swallow continues before Johnson interrupts.

“No emails on the thing,” Johnson reiterates, “and, no, my wife doesn’t even know you were on there.”

Swallow, then a candidate for Utah attorney general who assumed that office earlier this month, has acknowledged using the houseboat, “Peps I,” a 75-foot-long floating mansion with numerous cabins, a home theater and a helipad — from which Johnson can be seen in a YouTube video taking off in his copter.

Why would Swallow care about the boat, or anyone knowing that Swallow and his family had used it?  State law prohibits officers–including then Assistant Attorney General Swallow–from accepting gifts from parties on which they may have to take action.  According to the Salt Lake Tribune, the “attorney general’s office has sole authority to file class-action suits on behalf of citizens who have been defrauded. The state law parallels the federal one that the FTC cited when it sued Johnson in December 2010, a few months after Swallow used Johnson’s houseboat.”

In other words, Swallow was accepting gifts from Johnson, a person who was under investigation by the Federal Trade Commission for something that the Utah Attorney General’s office could have, or maybe should have, been investigating.   While state law allows such gifts if disclosed, the gifts were not disclosed, and as Swallow demonstrates in this recording, he did not seem to want it disclosed.

Illegal? Unethical? Or just incredibly foolish?


Meanwhile, The Public Is Not Impressed

Swallow-Figure-3-550x374

US Kayla Mc Maroney poses with her silveWhether Swallow’s behavior was illegal or not, the public is doing a Kayla Maroney on Swallow’s behavior. A recent poll by BYU’s Center for the Study of Elections and Democracy showed that at least 58% believed his behavior was either illegal or, if not illegal, unethical, while 49% believe he should resign. Only 34% are confident that he should remain in office.

That’s an awkward way to start one’s term as Attorney General.

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About Daniel Burton

Daniel Burton lives in Salt Lake County, Utah, where he practices law by day and everything else by night. You can follow him on his blog PubliusOnline.com where he muses on politics, the law, books and ideas. He is active on social media, Republican politics, and has been named to PoliticIt’s list of the “Top-50 Utah Political Opinion Leaders” on Twitter. You can reach him directly at dan.burton@gmail.com

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