‘Dark Money’ Scrutiny May Come From Swallow Probe

The political ghost of former AG John Swallow may well pass over the 2014 Legislature and a few legislative races next year.


House Majority Whip Greg Hughes, R-Draper, tells UtahPolicy that he’s been told that the same “dark money” tactics used against former Rep. Brad Daw, R-Orem, could be used against him this spring and summer.

And, coincidently, UtahPolicy has been told by other sitting House members that the upcoming report by the House special investigatory committee on Swallow will contain some analysis of the Daw 2012 race’s finances, and perhaps even recommendations about how to shine a light in the future on such “dark money” campaign fundraising and subsequent candidate attack ads.

Daw professed that political consultant Jason Powers had a hand in negative fliers and other materials that claimed Daw supported Obamacare-type health care reform, when in fact Daw never did.

Here is an interesting online video put together in 2012 by Utah Senate President Wayne Niederhauser, R-Sandy, and Sen. Howard Stephenson, R-Draper.

It gives you a little bit of background about negative races run by non-profit 501(c)(4) entities, who get all their money from other non-profit entities that DON’T have to disclose where the money ultimately came from.

That’s why it’s called “dark money,” because tracing it back leads to a dark dead end.

And, by the way, the video refers to the group Proper Role of Government Defense Fund. And who is that?

A non-profit group – that doesn’t have to report where it gets its money from – which was formed by political consultant Jason Powers.

You can read about the Daw/Powers battle in this Salt Lake Tribune story. Powers defends his use of 501(c)(4) organizations and their anonymous donations.

Yep, this is the same Jason Powers who helped run and fundraise for Swallow’s 2012 AG race.

Powers was subpoenaed by the House Swallow Investigation Committee, but after Swallow resigned earlier this month those subpoenas, as well as others, were dropped by committee attorneys.

But, sources tell UtahPolicy, the Swallow/Powers/“dark money” issue may well be addressed by the House’s special committee report – which will recommend any changes to Utah campaign/election law that could help curtail Swallow campaign shenanigans investigators looked into.

Swallow was guilty of several violations of Utah campaign finance reporting law, a separate Utah Elections Office investigation found. (Outside of this story, that report is interesting reading.)

And while Powers may not have been the cause of those violations – how Swallow raised money and from whom is still interesting talk in Capitol Hill hallways.

In the 2013 Legislature Hughes ran HB43, a bill that requires non-profit corporations and other entities that get involved in candidate and political issue campaigns to file with the Utah Elections Office and disclose their contributors.

HB43 is here.

Hughes says he’s heard two things that could be happening around HB43:

1) Some groups who like the idea of hiding their political contributions behind the firewall of a non-profit and/or groups who fear that they will have to disclose their members’ dues (and thus their membership lists) don’t like the idea of having to disclose so much to public purview.

“I hear they would sue under the claim that such disclosure violates their rights of free speech,” said Hughes.

“I don’t see that at all.”

There is plenty of legal precedent where government can require people who support political causes and candidates financially to make their donations public, Hughes argues.

2) There will be attempts in the 2014 Legislature to amend – read that to weaken – HB43, providing loopholes through which a person or group could hide their political donations from the public, Hughes adds.

Hughes also hears that part of the possible anonymous negative attack coming to him will deal with his 2008 ethics complaint.

Several Democratic House members filed a complaint against Hughes a month before the 2008 election.

The House’s Ethics Committee went into full-mode hearings – most of them secret as the then-rules allowed.

(In part because of the Hughes cacophony, the Legislature, to make their ethics process more fair and less partisan, adopted a totally new ethical judgment route, one now run by the independent Legislative Ethics Commission.)

The bi-partisan House Ethics Committee found Hughes not guilty of the charges against him, although committee members did write Hughes a letter of reprimand – which he accepted.

It was a painful time for Hughes and his family, and costly — he had to hire a private attorney to defend him.

Hughes consequently won re-election three times and has been elected to House GOP leadership twice.

Former GOP Gov. Jon Huntsman also entrusted Hughes to be the House sponsor on one of Huntsman’s defining pieces of legislation – liquor law reform that resulted in liquor-by-the-drink, something many Utah political observers believed impossible to achieve.

“I’m told they (his yet unannounced political opponents next year) will hit me with all that old 2008 ethics stuff,” Hughes said. “I’ve been warned.”

Part of the anonymous campaign against Daw in 2012 was negative fliers dropped in his Orem district during the January-March general session.

It was damning – and effective – timing.

“When we are in session, you’re working 12-hour days,” said Hughes.

By law, legislators can’t fund raise during the Legislature.

And they certainly have little time to organize or talk to prospective GOP delegates – which are picked in neighborhood caucus meetings just two weeks after the session ends.

Hughes says the 2012 negative mail drop against Daw “was clearly aimed at poisoning the delegate pool – many think it worked” – keeping Daw from winning his re-nomination outright in the Utah County GOP convention.

Hughes said the Proper Role of Government Defense Fund fliers against Daw were, interestingly enough, also sent to a number of GOP House members.

Why? Speculates Hughes, would they go to people outside of House District 60?

To let them all know what could happen to them if they bucked traditional GOP insider politics, says Hughes.

HB43 passed the House 60-13. It passed the Senate 20-8 – with many legislators clearly upset with what happened to Daw.

Just what can occur in a close legislative contest when considerable negative campaigning comes into the race?

Let’s look at Daw’s 2012 re-election campaign.

Fellow Republican Dana Layton, R-Orem, beat Daw in a June, 26, 2012 GOP District 60 primary. (Utah County has no Democratic legislators and hasn’t for years. The GOP nominee wins, period.)

Layton says she had nothing to do with the negative attacks against Daw. That anything there was outside of her own campaign. And indeed the negative Daw mailers were not paid for, nor signed by, the Layton campaign.

But Layton was one of 13 representatives who voted against HB43.

Candidates have to file a pre-primary financial report several days before the June election. The pre-primary report contribution/expenditure cut-off date is 12 days before the primary.

In keeping with the law, Layton’s pre-primary report shows she received no financial help from Proper Role of Government Defense Fund, within that pre-primary reporting period.

However, just a few days before the June primary, her Aug. 31 report shows, PRGDF gave her $2,074 worth of “signs” and $1,753 for a “telephone town hall.”

Thus, the PRGDF donations made just days before the June primary were not public before the District 60 GOP primary election, where Layton defeated Daw, 2,528 votes to 2073 votes, or 55-45 percent.

Overall, Powers’ group gave the Layton campaign 19.6 percent of the $19,523 she spent on her 2012 election.

Incumbents historically outraise and outspend their challengers.

In 2012, Daw raised $31,275 and spent $27,111 – most of it coming, as is usually the case with incumbents, from special interests that have business before the Legislature.

So Layton took Daw out, even though he outspent her.

Daw, interestingly enough, has not closed down his campaign account. At last report it had $3,623 in available cash.

Hughes does not blame Layton for Daw’s defeat. But he still worries that “dark money” could harm him, as it did Daw.