Legislators Consider Draft Report on Swallow Investigation

A confidential draft report on the House’s John Swallow investigation – which has now cost $3.8 million – was given to the committee on Wednesday, starting the official 21-day review period.

 

Rep. Jim Dunnigan, R-Taylorsville, the committee chair, said he didn’t want any of nine committee members to give the report to the media, or discuss its specifics, because the draft will be changed before it is ultimately made public.

In a committee meeting Wednesday, in which two proposed bills dealing with the Swallow scandal were discussed, Dunnigan also said that part of the final report will be hundreds, if not thousands, of emails between Swallow and others.

Many of those new emails come through the committee’s forensic computer experts being able to recover data from a Swallow hard-drive that Swallow’s attorneys said couldn’t be retrieved – the hard-drive was too damaged.

“We recovered around 99 percent” of the damaged hard-drive’s data, said Dunnigan.

The new emails “corroborate” other evidence, including email trains, proving that Swallow acted unethically, and perhaps illegally, in his campaign finance dealings and work with some of his election supporters.

Swallow resigned in early December when it became clear he would be taken to court over some of his campaign reporting irregularities.

At least two other criminal investigations concerning Swallow and his predecessor, Mark Shurtleff, are still ongoing.

But with his resignation the House committee and the Lieutenant Governor’s Elections Office investigations are ending.

Because the House resolution setting up the Swallow investigation requires the committee to consider its draft report for 21 days before voting to make it public, the committee can only release the report on March 4, seven working days before lawmakers adjourn at midnight March 13.

That means Dunnigan and his committee members have to move forward with legislation well before the final report is released.

Dunnigan said Wednesday that not all legal fixes needed to deal with the Swallow scandal can be achieved this session.

“Some will have to wait for the interim” – or the seven months that lawmakers study and draft bills from one general session to the next.

As reported previously in UtahPolicy, Dunnigan, however, has opened up four bill files for changes that he believes can be made this session.

The Swallow committee discussed two of those four bills Wednesday.

One, entitled Pattern of Unlawful Activities Amendments, deals, apparently, with Swallow “losing” any number of his electronic devices, like his tablet, phone and computer hard-drives.

Swallow told investigators that he either had those devices wiped or lost them, like on airplanes or at his home.

The draft bill says an official can’t falsify or alter a government record and can’t “tamper” with evidence.

The draft includes any investigation by the Legislature, or their staff, as an official proceeding under which government documents can’t be tampered with.

By including legislative investigations in the current “pattern of unlawful activities” statute, Swallow would have fallen under that existing RICO penalties.

The penalty for violating that act is a Class A misdemeanor – or a year in jail and/or a $10,000 fine.

Another draft bill passed out in the committee deals with campaign filing reforms.

Swallow and his campaign consultant, Jason Powers, used various schemes to hide campaign contribution sources.

Swallow, on the night before he filed for Attorney General, made his wife the manager of his own consulting firm, P-Solutions, in an effort to hide pay-day lender dealings he had.

But tightening up conflict of interest and campaign reporting for statewide races means placing the same new restrictions on legislators themselves.

And this is where the rubber hits the road – will legislators require more reporting by themselves?

One idea in the campaign reform draft places officeholder/candidate spouses in the same reporting category as legislators, governors and attorneys general.

This is aimed at stopping the sham Swallow used with P-Solutions and in hiding some of his consulting money by setting up a trust with a married daughter as the trustee.

“I have a problem with that (spouse reporting) one,” said Rep. Lynn Hemmingway, D- Salt Lake. “My wife didn’t get elected. (Her assets) is private. That is a root canal; it really hurts.”

But fellow Democratic Rep. Rebecca Chavez-Houck from Salt Lake said she and her husband “got into this gig together.” Most of their assets are really his, she added.

“The loopholes we saw Swallow using (involved) his family members and other holdings. This was abused” and getting at spouse assets or other ways to hide money should be included as needed reforms, she added.

House Majority Leader Brad Dee, R-Washington Terrace – who has already said he wants his GOP caucus to elect him speaker next fall – warned that when he ran some legislative ethics bills several years ago, “not too many people in the Legislature considered me a friend, when all was said and done.”

In other words, the Swallow scandal bills may sound good, but in practice some lawmakers may not want to go there.

Dee added: “This will take a lot of education” of fellow legislators to get them to pass new restrictions on their own private activities.

“These bills may be confusing” to legislators who haven’t sat through the Swallow committee hearings, and learned how he manipulated current campaign and conflict of interest reporting requirement to conduct his scurrilous activities, said Dee.

“This is tough” selling such bills, “so laborious,” added Dee.

Several committee members said no matter how strict they may try to be, crooked candidates and officeholders will find loopholes and not fully report.

“But we found a lot of bad stuff” that Swallow, Powers and others did in 2012 and before, said Rep. Francis Gibson, R-Mapleton. “Our intent is not for this to happen again.”

“If someone wants to be devious and beat this, they will do that anyway,” said Hemmingway.

Rep. Mike McKell, R-Spanish Fork, an attorney, said the suggested changes “are not too onerous.”

He worries that legislators and other state officers could run shell games by becoming consultants (as Swallow did) and hide assets and money all over the place.

Consulting contracts “are the high weeds” where candidates and officeholders can hide nefarious operations, McKell said.

One problem in the Swallow investigation was that most campaign reporting and conflict of interest laws today carry no real penalties.

Filing a false or “incomplete” campaign finance report, for example, could be fixed with just an amended return (although Swallow didn’t really try to amend his returns to make them legal or complete.)

The proposed bill would make it a Class B misdemeanor to purposely file an inaccurate conflict of interest report – six months in jail and/or a $5,000 fine.

Dunnigan said the committee will meet “again soon” to consider language in two other bills, yet to be even drafted.