Swallow has publicly stated that he’s hired a downtown Salt Lake City law firm to take action against any defamation of his character. (And neither I nor UtahPolicy can afford to be sued.) Let me say at the outset of this article that it appears now that Swallow did not commit any illegal act.
I repeat, all that Swallow did was perfectly legal.
But was he foolish and greedy – which are not crimes – but severe faults in anyone and especially Utah’s highest law enforcement officer?
Since UtahPolicy is a political newsletter, let’s look at what we know about Swallow’s actions through media reports and put them in some political context:
-- Swallow was a major fundraiser for former Utah Attorney General Mark Shutleff in Shurtleff’s re-election of 2008. Even at this time, Swallow was looking at running for AG if and when Shurtleff retired.
-- As such, Swallow knew that Jeremy Johnson, a high-flying St. George Internet entrepreneur, who liked to show off the millions of dollars he had, was in the process of giving – both through himself; his firm, I Works; family and friends; more than $200,000 to Shurtleff.
-- Shurtleff, who decides to retire, begins giving Swallow considerable amounts of money from his personal PAC for Swallow's 2012 AG race. Ultimately, Shurtleff gives Swallow $298,250 in cash and campaign services, starting in December 2011.
Swallow raises in his whole race $1.309 million.
Shurtleff’s contributions (which may well contain some Johnson money) makes up more than 22 percent of Swallow’s whole campaign war chest.
Johnson, whose firm was losing money around 2010 or so, doesn’t directly contribute to Swallow’s campaign.
-- Swallow was working in 2008 as chief legal counsel for Richard Rawle, who owned the Provo-based Check City, a payday lender.
-- In 2009 Swallow left Check City to become Shurtleff’s chief deputy, and clearly Shurtleff’s handpicked successor if the attorney general should retire in 2012.
-- Around 2010 Johnson, who was in trouble with the Federal Trade Commission (and later the U.S. Justice Department) came to Swallow and asked if he knew anyone who could help him with the FTC investigation (which would later file a complaint against him and I Works).
-- Swallow knew that Rawle had had some dealings with the FTC and Congress. Perhaps Rawle knew some D.C. lobbyists who could help Johnson?
Now, this is where the plot thickens.
-- Both Rawle and Swallow set up independent “consulting” firms. Meetings are held with Johnson. The intent of those meetings is in great disagreement.
But let’s take Swallow at his word (and Rawle’s via a deathbed signed testimony, for Rawle died in December 2012 from cancer).
-- Johnson is convinced to pay a large amount of money (claims vary on how much ultimately was pledged), and he pays Rawle more than $250,000 (Johnson claims). Rawle keeps $50,000 for himself as a “consulting” fee.
-- Meanwhile, Rawle pays Swallow $23,500 for “consulting.”
Swallow says, and Rawle’s deathbed testimony says, that the $23,500 is for consulting work Swallow did on a Nevada cement plant project, not for any consulting work on Johnson’s FTC lobbyist work – although it is unclear whom, if anyone, Rawle hired on Johnson’s behalf.
-- Just before the March 2012 candidate filing deadline, Swallow officially takes his name off of his own consulting firm and makes his wife the firm’s manager/owner.
That means legally he doesn’t have to list on his candidate financial forms his consulting firm P-Solutions (you gotta love that name) nor the $23,500 Rawle paid him.
Such listings could lead to some unwelcome questions from the press or Swallow’s political opponents.
-- Swallow faces Sean Reyes, a well-respected attorney, in a late-April state GOP convention.
Swallow is being attacked from his political right – just as other conservative Utah GOP leading candidates/officeholders were in 2010 and 2012. Reyes is getting some important endorsements.
A sweep in the state GOP convention looks less likely for Swallow. He may well face a primary.
Swallow can’t afford any kind of political/business scandal now.
-- Johnson, who has a complaint filed against him by the FTC, wants to know by the spring of 2012 where his money has gone. He starts making inquiries and at some point is demanding his money be returned.
-- Just before the GOP state convention Swallow had raised in total $452,000. Shurtleff had given him $130,000, or about a third of it.
Swallow had spent $180,000 wooing state delegates and/or on pre-convention campaigning.
But Swallow kept $272,700 in cash aside; no doubt worrying he would have a late June primary against Reyes.
Indeed, Swallow can’t 60-percent Reyes in the convention, and the two go to a seven-week primary battle.
-- About this time, Swallow looks into returning the $23,500 to Rawle in some fashion. Why?
He doesn’t want to give the money directly to Johnson, since Swallow says Rawle didn’t pay him for FTC/Johnson work, but for the cement plant work in Nevada.
The $23,500 may have come from Johnson, but Rawle says even if it did come from his $50,000 consulting fee, once the cash hit Rawle’s bank account it was his and he could pay a debt to Swallow if he wished.
Besides, Johnson is acting hinkey, demanding money from Swallow and asking why the money he paid isn’t ending his FTC and Justice Department probes. Johnson says he borrowed the $250,000 from friends and needs the money back.
-- Swallow beats Reyes 67.9 percent to 32 percent in the GOP primary, spending $427,000 in the short campaign.
As almost anyone knows, in big Utah races the Republican nominee almost always wins.
Swallow’s real challenge was Reyes, first in the GOP convention, then in the June primary; it was never Democrat Dee Smith in the November general election.
Finally, Swallow beats Smith 64.7 percent to 30 percent, with Swallow spending, in total, $1.15 million on his AG race.
-- But Swallow even before the November election still can’t afford a scandal in the final race against Smith.
By this time, Johnson was making all kinds of threats, including trying to get Swallow to resign as a candidate just before the November ballot. Swallow, of course, refuses.
-- Still, even after the election Johnson is a threat, one way or another. Swallow hires an attorney.
-- Rawle, unfortunately, is now dying of cancer. And three days before Rawle’s death, in his hospital room, a strange deathbed scene plays out.
Whether at Swallow’s or Rawle’s insistence, a document is drawn up – changed and reworked apparently at the bedside as Rawle’s family is around him -- and Rawle signs a testimony that basically upholds Swallow’s tale of events concerning Johnson.
-- The whole matter blows up earlier this week when at a federal court hearing originally called for Johnson to plead guilty to federal fraud charges, Johnson introduces a list of people he doesn’t want prosecuted in his case.
And on the list is John Swallow’s name.
Prosecutors refuse the official list. Swallow says he didn’t ask Johnson to put his name on such a list and doesn’t know why Johnson did so.
The affair now plays out with Swallow officially asking Utah’s federal prosecutor to investigate the whole incident, believing his good name will be saved.
What do we know?
That Swallow was at the very least extremely careless in his dealings with Johnson – a man under federal investigation – held private meetings with him; sought in some way to help him, if only in finding D.C. lobbyists.
Utah has a history of top officials/candidates meeting with big shots who have, or could, provide considerable campaign contributions.
(Just think of Gov. Gary Herbert meeting with I-15 contractors and such.)
In addition, there’s a long history of Utah politicians becoming lobbyists themselves after their public careers are over. (Look at the current 400-plus lobbyist listings to see many former lawmakers and administrative officials).
It’s not unusual for those well-connected to help out folks and firms for “consulting” or “speaking” fees.
My mind goes back to the late U.S. Rep. Wayne Owens, D-Utah. It used to be perfectly legal for members of Congress to earn up to one-third of their official congressional pay in “consulting,” or “speaking,” and other fees.
Owens, who had his own personal finance challenges, did so regularly. I once asked him who had paid him around $20,000 or $25,000 over the last year in speaking fees.
Owens seemed to enjoy telling little tales, and he didn’t lie here. He said it was long-time Democratic Party support Ian Cummings who had paid him the one-third fee for addressing some of Cummings’ board meetings.
I asked Owens if his congressional insight speeches – all perfectly legal – were really worth $25,000.
“I guess so,” he said with a small smile.
Certainly Swallow looked to gain financially in some kind of “consulting” outside of his deputy-AG job.
And he wanted to keep it quiet, that’s why he put P-Solutions into his wife’s name and didn’t report it on his 2012 candidate form.
He certainly felt uneasy about the $23,500 – trying to find a way to return it during his campaign last year.
And he went to the deathbed of a friend and former boss to get a testimony signed, while grieving family members were nearby.
All these may be legal actions.
It may well be that Utah voters in 2016 will decide if they are proper actions.
Utah has no recall law.
Swallow may resign – two newspapers’ editorial pages have already demanded it.
If not, and if no criminal charges are filed against Swallow (they certainly wouldn’t be if his side of events is to be believed), then there likely won’t be any action taken by the Utah House or Senate to impeach Swallow – the only way to force him out of office.
Greedy, maybe even desperate, actions by our new attorney general?
It certainly seems so.
And it’s not a good way to start one’s four-year tenure as Utah’s chief law enforcement officer.