Lee’s 2010 campaign received unlawful donations, indicted businessman claims

Sen, Mike Lee, proposes public lands amendment, file photo | Photo by Mori Kessler, St. George News

SALT LAKE CITY – A political watchdog group announced Thursday it is preparing to file a complaint with the Federal Elections Commission regarding statements made by indicted businessman Jeremy Johnson relating to campaign contributions made to Sen. Mike Lee’s 2010 run for U.S. Senate.

Johnson’s statement was a part of a search warrant recently unsealed and released to the public. He said that former Attorney General John Swallow, who was working as a fundraiser for Lee’s campaign at the time, told him to launder $50,000 in contributions to Lee’s campaign. This was done through donating money to the campaign “in behalf of other individuals” and Johnson giving his own money to other people to donate to the campaign. The same thing was done during former Attorney General Mark Shurtleff’s 2009 bid for senate, Johnson said, in which he laundered over $100,000 to that campaign.

Johnson said Swallow told him he was limited to individual campaign donations of $2,500. As amounts exceeding that violate campaign finance laws, the straw donor scheme was allegedly hatched between the two.

The search warrant is a part of an ongoing investigation into Swallow and Shurtleff by the Salt Lake County District and Davis County attorneys offices, along with the FBI and Utah Department of Public Safety. The warrant was dated Feb. 12, and was not related to searches conducted at the homes of the former attorneys general conducted Monday.

The Alliance for a Better Utah, a self-described progressive political advocacy group, issued the following statement in the wake of the search warrant’s release:

We are in the initial stages of preparing a complaint to the Federal Elections Commission to ask them to investigate illegal election activity in Sen. Lee’s campaign. That complaint could consider not only Johnson’s allegations, but also whether or not Lee’s debt forgiveness resulting from the short sale of his Alpine home in 2012 should also have been recorded as a campaign contribution.

Campaign election law violations are serious business. Unfortunately, too many of Utah’s elected leaders seem to treat election laws like the rest of us treat speed limits – as if they were merely suggestions. If Utah’s freshman senator did indeed allow, whether by ignorance, negligence or complete disregard of the law, a sizeable amount of money to be illegally funnelled into his campaign, then Sen. Lee should be held accountable. While Senate campaigns involve significant amounts of money, it is not unreasonable for the public to expect a first-time senate candidate from Utah to know the identity of his donors.

As reported by the Deseret News, Brian Phillips, Lee’s communications director, said in a statement that neither Lee nor anyone involved in the 2010 campaign was aware of any illegal campaign contributions. He also said documents collected by investigators confirm only the two individuals allegedly involved – Johnson and Swallow – knew anything about the possible scheme.

Shurtleff, who ultimately abandoned his bid for a senatorial run, told the Deseret News he was not aware of the alleged activity behind the campaign contribution. He also said he would not accept donations made in such a manner.

Rob Snow, Swallow’s attorney, told The Salt Lake Tribune he was surprised Johnson’s allegations are taken seriously.

“Someone (like Swallow) who had twice run for Congress and was aiding in the fundraising for serious senatorial candidates for the United States Senate is not going to get involved in straw donations,” Snow said, according to The Salt Lake Tribune.

As far as he is aware, Snow said none of the contributors told Swallow they were using Johnson’s money.

If the Federal Election Commission does decide to investigate contributions made to Lee’s 2010 campaign, Matt Sanderson, an attorney with the Washington, D.C., firm of Caplin & Drysdale, told both The Salt Lake Tribune and Deseret News that the FEC would most likely go after those involved in the straw donations and not necessarily the candidate that received them.

“It would be exceeding rare,” he said, if a candidate were targeted by the FEC. In this case, the FEC is more likely to go after Swallow and Johnson and others involved, he said. As there is a “strict prohibition” against straw donations, violators could face civil and potentially criminal penalties depending on the circumstances.

For Lee’s part, he would have to return money that was unlawfully donated.

If the FEC does decide to investigate the matter, it could take years to unfold, Sanderson said.

Accusations made against Swallow by Johnson last year sparked a scandal that ultimately led to Swallow resigning as attorney general in December. Multiple investigations into the allegations were launched. While the U.S. Department of Justice dropped its on investigation into Swallow and the Utah State Bar dropped a complaint of ethical misconduct, other investigations persisted.

A Utah House investigative committee released findings in March that accuse Swallow of tampering with evidence, using his office to advance himself personally and professionally, and creating a “pay-to-play” atmosphere at the attorney general’s office.

Johnson has been federally indicted with 86 criminal charges related to conspiracy, money laundering, a variety of fraud charges and other counts related to his former I Works business. He alleged that he was working with Swallow to try and get a federal investigation off his back, which formed the foundation of the resulting scandal and tsunami of investigations into Swallow’s alleged misconduct.

Salt Lake District County Attorney Sim Gill and Davis County Attorney Troy Rawlings are leading an investigation into Swallow and Shurtleff that has lasted 18 months so far, though may wrap up later this year.

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Email: mkessler@stgnews.com

Twitter: @MoriKessler

Copyright St. George News, SaintGeorgeUtah.com LLC, 2014, all rights reserved.

 

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3 Comments

  • Kevin June 7, 2014 at 8:45 am

    Not too surprising, but he will get a pass from Utah voters as long as his 10 and TR are up to date!

  • Karen June 7, 2014 at 10:56 am

    Mike Lee’s camp makes an inaccurate argument about who knew what and when. Obviously, if Jeremy Johnson gave money to people so they could make straw donations, there are certainly more than just the “two” people, Jeremy and Swallow involved. One of the straw donators to Lee’s campaign is now in prison for his Ponzi schemes. The AG’s office definitely had a “for sale” sign on it’s door and plenty took advantage of it.

    Funny how Jeremy has recorded so many conversations and directed the course of the conversations to get others to admit wrongdoing. If he hoped that turning state’s evidence would help him, it doesn’t seem to be working out so well for him. He must be terribly disappointed.

  • Bender June 9, 2014 at 7:41 pm

    Mike Lee loves America and is a true patriot. He understands what the holy founding fathers knew. How dare you impinge on his good name? USA, USA, USA.

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