Utah’s Former Attorneys General in the Soup

     SALT LAKE CITY (CN) – Two former Utah attorneys general are implicated in an FEC lawsuit against a businessman accused of using straw donors to funnel $170,000 in illegal donations to political campaigns.
     The Federal Election Commission sued Jeremy Johnson on June 19 in Federal Court.
     Johnson gave $100,000 through straw donors to former Attorney General Mark Shurtleff’s 2009 U.S. Senate campaign, $50,000 to Sen. Mike Lee’s successful 2010 campaign, and $20,000 to then-Senate Majority Leader Harry Reid, according to the lawsuit.
     The FEC claims Johnson called upon two attorneys general – Shurtleff and his successor John Swallow – to try to pull strings to stop an FTC investigation of Johnson’s online poker company.
     Swallow, 52, resigned in 2012 amid bribery allegations after just 11 months in office.
     He faces 13 felony charges and one misdemeanor in Utah, including money laundering, bribery, misuse of public funds, obstruction of justice and falsifying government records.
     Shurtleff, 57, was jointly charged, but the cases have been separated. He faces five felony charges and two misdemeanors, including accepting lavish gifts from Johnson, including use of his private jet and luxury houseboat.
     The Utah district attorney who is prosecuting Shurtleff blasted the FEC lawsuit, saying it would complicate his criminal prosecution of the former three-term attorney general. (See below.)
     The Federal Trade Commission sued Johnson in Nevada in December 2010, claiming his Internet-marketing company I Works charged customers without authorization. He was criminally indicted in Utah Federal Court in June 2011. (United States v. Johnson et al., No. 2:11-cr-0501.)
     According to the new FEC complaint, in 2010 Johnson “discussed with individuals in the online-poker gaming industry, including Ray Bitar, a principal of an internet-poker company called Full Tilt Poker, using straw donors to contribute unlawful amounts to federal candidates, including Majority Leader Reid, in an attempt to protect or further their business interests.”
     Full Tilt Poker and others were charged in a civil forfeiture case in Manhattan Federal Court in 2011. (United States v. Pokerstars, et al., No. 11-cv-2564 (S.D.N.Y.)
     As the online poker investigations were gathering steam in 2009, Johnson, aware of them, met with Swallow, then Utah’s chief deputy attorney general and a fund raiser for his boss Shurtleff’s Senate campaign, to discuss how to get around campaign limits, the FEC says.
     After Swallow told Johnson about the donation limits, the men “discussed the possibility of illicitly contributing additional amounts to Shurtleff’s campaign by giving the funds to straw donors and arranging for those straw donors to pass on the funds to the Shurtleff campaign,” according to the FEC complaint.
     Shurtleff was seeking the 2010 Republican nomination for U.S. Senate, a race he abandoned as rumors of illegal donations swirled. Federal law limited campaign contributions to $2,400 per person per election at the time.
     Johnson’s straw donors did give $100,000 to Shurtleff’s campaign, though the money came from Johnson, according to the FEC.
     After Shurtleff dropped out in November 2009, Mike Lee entered the race, with Shurtleff’s endorsement. Johnson then gave Lee’s campaign $50,000 through straw donors, after discussing with Swallow “how contributing to Lee’s campaign would help protect and advance Johnson’s business interests,” the FEC says in the complaint.
     It continues: “In particular, Swallow told Johnson that if Johnson contributed to Lee, and if Lee won election to the Senate, Lee could then play a key role in the appointment of a United States Attorney in Utah who could protect Johnson’s business interests from prosecution by other United States Attorneys.”
     The FEC claims that Johnson also sought Reid’s assistance – unsuccessfully -in stopping the FTC investigation in 2010.
     Johnson’s conspiracy with Swallow was blatant, according to the FEC complaint.
     “For example, Johnson has reported that Swallow said to him: ‘[I]t is important that we raise this money and make Mike Lee our guy. … ‘[H]e is going to be choosing the next U.S. Attorney and you gotta have him in your corner and you gotta have the U.S. Attorney in your corner especially while you are processing poker in this district.'”
     Johnson’s pitch to straw donors was simple, the FEC says: “Hey would you donate to Mike Lee? I’ll get you the money.”
     Davis County Attorney Troy Rawlings, who is prosecuting Shurtleff, excoriated the FEC for its lawsuit against Johnson.
     “The message being sent by the feds: ‘You never should have opened your mouth, boy,'” Rawlings told Salt Lake City TV station KUTV on Sunday. “In exchange for his significant assistance and information, Jeremy Johnson is getting screwed by the United States government.”
     Rawlings gave Johnson immunity in the criminal probe of Shurtleff.
     Rawlings continued, in no uncertain terms: “Even though the FEC action is a civil lawsuit, it is still burning Jeremy Johnson for his cooperation. … For reasons I cannot explain at this time, this situation poses obstacles to our prosecution that was based on Jeremy Johnson’s cooperation.”
     The Salt Lake County district attorney is prosecuting Swallow. Lee is seeking re-election to a second term in 2016. His spokeswoman Emily Long said Lee knew nothing about the alleged donations.
     “At no time during or since the 2010 campaign, was Senator Lee or anyone associated with the Lee campaign aware of any unlawful contributions to the Lee campaign,” Long said in a statement. “The documents obtained by investigators confirm that the scheme was known only to the two individuals who may have been involved.”
     She said the FEC filing “demonstrates clearly that the Lee campaign had no knowledge of any of the activities in which Jeremy Johnson and others may have engaged.”
     The FEC seeks treble damages for violations of three sections of the Federal Election Campaign Act.

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