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Special counsel will investigate John Swallow's financial arrangements

Published May 10, 2013 5:15 pm

Campaign dealings • The probe aims to find if the A.G. violated disclosure requirements and — if he did — whether he offered false information.
This is an archived article that was published on sltrib.com in 2013, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Utah Lt. Gov. Greg Bell will appoint a special counsel to investigate three alleged campaign-law violations by Attorney General John Swallow.

The decision, announced Friday, comes in response to a complaint filed by the liberal-leaning group Alliance for a Better Utah, which laid out a dozen instances in which, the group said, Swallow had omitted information from his financial disclosure statement, including concealing his interest in a company at the center of a scandal involving indicted St. George businessman Jeremy Johnson.

The alliance argued that, if the complaints in the disclosure were proven, a court could have Swallow, a first-term Republican, removed from office.

The lieutenant governor's office dismissed nine of the 12 counts, including several in which the complaint referenced the wrong John Swallow. But three instances warranted further investigation, according to the office.

Under a bill rushed through the Legislature, the lieutenant governor — a Republican in charge of overseeing state elections matters — has the authority to appoint a special counsel to investigate the allegations. Before the bill passed, it would have been up to the attorney general's office to conduct the inquiry, which lawmakers said created a clear conflict of interest.

Jason Powers, a campaign adviser to Swallow, welcomed the investigation.

"It is good news that nine of the allegations were dismissed summarily," Powers said. "We remain patient while the Elections Office seeks additional legal advice and are optimistic that the remaining allegations will be dismissed."

Swallow's attorneys had urged the lieutenant governor in a filing last month to toss out the entire complaint, saying it "lacks sufficient merit to be worthy of serious consideration." They argued that any omissions could be corrected by filing amended disclosures.

One of his lawyers, Rod Snow, said in an email Friday that Swallow "has offered to amend the disclosure forms per the statute and in fact may do so next week."

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No disclosure • In the personal financial disclosure filed when he became a candidate, Swallow did not disclose his interest in P-Solutions, a consulting company Swallow has said was paid $23,500 by the late Richard Rawle for consulting work Swallow did on a Nevada cement project.

The payment to P-Solutions came directly from funds that Rawle, who founded the Provo-based payday-loan chain Check City, received from Johnson for what Swallow characterized as a lobbying deal that he helped arrange to help Johnson's I Works company deal with an investigation by the Federal Trade Commission.

Johnson has said the $250,000 deal was intended to bribe U.S. Senate Majority Leader Harry Reid, D-Nev. Reid and Swallow have denied that.

Swallow later returned to Rawle the $23,500 he was paid and asked to be paid from another account.

After filing his initial disclosure, Swallow removed his name from the management of P-Solutions and submitted an amended disclosure, but still failed to list his wife's interest in the company.

The special counsel — who will be hired through a contracting process — will investigate whether Swallow should have listed P-Solutions and another company, SSV, on his financial disclosure, and whether he should have disclosed $8,500 paid to P-Solutions by Rawle. The remaining $15,000 was paid outside the window where it would have had to be disclosed.

The third question — assuming he was required to disclose his interests in those companies and the payment from Rawle —  is whether he intentionally provided false information on the forms.

Swallow's attorneys contend that he was not obligated to disclose the companies because they were put into a blind trust for his children as beneficiaries, so Swallow never benefited from payments to the companies and he was not obligated to disclose his role.

Group pleased, will monitor • The Alliance for a Better Utah said in a statement it is "unclear" why the administration decided to choose a special counsel through a competitive bidding process "rather than appointing a county district attorney, such as [Salt Lake County District Attorney] Sim Gill, as special prosecutor."

But Maryann Martindale, the group's executive director, said in an interview that even though nine counts were dismissed, she is pleased three are going forward.

"I do think those three are probably the most substantive parts of the claim. Those were the ones I felt like we had the strongest remedy," she said. "It's good that they're taking this seriously as they are."

She said her group will continue to monitor the selection of a special counsel to make sure whoever is chosen doesn't have partisan conflicts or ties to the attorney general's office and has the expertise to do the job.

The move to appoint a special counsel is the latest bad news for Swallow.

This week, convicted businessman Marc Sessions Jenson told The Salt Lake Tribune of a series of trips that Swallow and then-Attorney General Mark Shurtleff took to a luxurious Newport Beach villa, charging thousands of dollars of expenses to Jenson.

At the time, Jenson was free, thanks to a plea deal he had cut with prosecutors in the attorney general's office on six felony charges related to a failed business deal. Jenson is back in prison after failing to pay restitution as part of that deal.

Swallow did not work in the attorney general's office at the time, but was a fundraiser for Shurtleff. Jenson said Swallow told him he would join the office as Shurtleff's handpicked successor.

And last week, the former head of the state's Division of Consumer Protection filed a complaint with the Utah State Bar alleging Swallow violated attorneys' ethics rules when he discussed a case brought by the division with a potential donor without the agency's knowledge.

gehrke@sltrib.com

Federal probe

Indicted St. George businessman Jeremy Johnson, who faces 86 criminal counts, has alleged that Utah Attorney General John Swallow helped broker payoffs to enlist the aid of Senate Majority Leader Harry Reid in derailing a Federal Trade Commission investigation of Johnson's I Works business.

Swallow and Reid have denied the allegations. The Justice Department is investigating. —

Join us for a Trib Talk chat

Reporters Robert Gehrke and Tom Harvey will join Trib Talk host Jennifer Napier-Pearce for a behind-the-scenes look at the ethics controversy involving Utah Attorney General John Swallow and former AG Mark Shurtleff. Visit sltrib. com Tuesday at 11 a.m. for the live video chat.