Legislation Targets ‘Dark Money’ Following Swallow Scandal

Half a dozen campaign and election law bills have so far been filed in the Utah House and Senate, all (and perhaps more to come) could be in some way a reaction to the John Swallow scandal.

But certainly Rep. Patrice Arent’s HB294 is one of them.

“We started out trying to get more disclosure in campaign expenditure filings,” said Arent, who way back when worked as an attorney for the Office of Legislative Research and General Counsel.

But as the several investigations into actions by former Attorney General Swallow moved forward, Arent realized that she wanted a more broad-sweeping bill.

“Yes, my attempt was to get at the Swallow issue,” she told UtahPolicy on Wednesday.

HB294 tries to get at who really is behind contributions to Utah state campaigns.

As you may recall, Swallow and his political consultant, Jason Powers of Guidant Strategies, funneled hundreds of thousands of dollars into the Swallow campaign without revealing where the money was ultimately sourced.

In fact, leaders in Utah’s pay-day lending industry was the source. But Swallow started out his 2011-2012 AG race telling his campaign insiders that he didn’t want those large pay-day lender donations to be public, since he worried both his GOP and Democratic opponents would use such sources against him.

So he and Powers found ways to hide the source money – illegally so, an investigation by the Utah Elections Office found.

Lt. Gov. Chief of Staff Mark Thomas, he is also Elections Office director, told UtahPolicy that he hopes legislation like HB294 can lead to more campaign transparency.

Arent, with Thomas standing at her side, said that she’s become concerned that a number of legislative and statewide races are seeing large-dollar expenditures just being reported as “payment to Visa or MasterCard.”

Thomas said his office’s Swallow investigation found Swallow’s campaign wrote large checks to Guidant Strategies, with no detail of where that money was really spent.

“Are these expenditures for lawn signs?” Asked Arent. “Are they for radio or TV time?”

Citizens and political opponents of the candidate should know these details.

What HB294 is attempting to do, said Thomas, is treat a campaign consultant just the same as the candidate himself.

“Certainly the consultant knows where the money was spent, and can give a list to the candidate” to be filed appropriately with the Elections Office.

In the 2012 election cycle, said Thomas, more than $280,000 was spent by candidates, PACs, PICs with just listings of credit card payments – no details of what those cards paid for.

“It’s a little tricky,” said Thomas, trying to get at the source of all of the candidates’ money – which was the concern about Swallow and Powers.

Powers set up at least one 501(c)4 operation, which by law are considered a social entity, not a political one. He then gathered around $400,000 from groups and individuals, not naming them.

The money was funneled, some would say “laundered,” to other entities, with only his 501(c)4 entity as the source, including donations to Swallow’s campaign.

From independent expenditures from Powers’ groups, Powers ran negative ads against Swallow’s GOP opponent, Sean Reyes (now ironically the appointed AG) and former state Rep. Brad Daw, who ran a bill trying to better control the pay-day lending industry.

Arent, D-Holladay, and Thomas said HB294, if passed, would attempt to get at some of that “dark money.”

Senate President Wayne Niederhauser, R-Sandy, said that from what he’s gleaned from the House’s Swallow investigation, it is the concern over such “dark money” that lawmakers should address.

“The best approach is good transparency” in where candidates’ funds come from, said Niederhauser, who added he opposes any kind of campaign donation limits. (There are several bills which would limit donations also filed this session.)

Show where the candidate’s donations are coming from, “and the public can hold accountable for funds received,” said the president.

At the very least, HB294 would shine more light on candidate expenditures made to credit card firms.