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A look at campaign aide who helped elect Swallow, Hatch, Lee

Published January 14, 2014 9:42 am

Politics • Ties to Swallow has investigators all over the consultant who got big names elected.
This is an archived article that was published on sltrib.com in 2014, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

A year ago, Jason Powers was, without question, Utah's top political kingmaker.

Powers had amassed an extraordinary winning record, with a hand in getting six of Utah's seven statewide officers elected — including Sen. Orrin Hatch, Sen. Mike Lee and Gov. Gary Herbert — as well as Utah's Senate president and a number of state legislators.

But his dealings with one of the first Republican candidates he ever helped, former Attorney General John Swallow, have made him a focal point in multiple investigations and a target of legislative subpoenas and court-approved search warrants.

During the past dozen years, Powers built a reputation of putting the "pain" in campaign, with an aggressive, no-holds-barred style that offended some. His ads have blasted opposing candidates, accusing them of wanting to legalize marijuana, promoting abortion for minors, skimming off public funds and supporting socialized health care.

Still, more often than not, he won.

"In politics, winning is a habit. So when you win some races, you get referred and that's how the whole process built up," said Chuck Warren, a director of the Silver Bullet consulting firm, who added that Powers' reputation for negative campaigning isn't entirely fair.

"Jason has had success, and I think the success basically spawned jealousy by some people," Warren said. "I don't think he's any more hard-nosed than other people in Utah."

Powers grew up around politics. His father, Jack Powers, has long been active in Republican politics and has held various positions with the Salt Lake County Republican Party.

But for son Jason Powers, one of his first experiences in the professional campaign world came in 2002, working for a then-state legislator — John Swallow — who ended up losing to first-term Democratic Rep. Jim Matheson by about 1,600 votes.

By the start of the 2006 election cycle, Powers had opened his own consulting business and had begun to hone his hallmark style of messaging.

When the going gets tough • Longtime Utah lobbyist Rob Jolley said he recommended Powers to state Senate hopeful Jon Greiner and other Republicans in 2006, because he thought the consultant's bare-knuckle tactics were a good fit for their campaigns.

"They had tough, tough election campaigns, and they needed someone who was more aggressive than what you typically see in Utah," Jolley said. "So, based on my experience in other states, I thought Jason could help those campaigns that had tough elections."

One of those races Powers ended up working on in 2006 was for a real estate developer running for a state Senate seat in Sandy. His name: Wayne Niederhauser.

Niederhauser said he found himself jockeying for the Republican nomination in the open seat, and "I didn't know what I was doing."

The race was expensive — among the most costly legislative races in Utah history. Niederhauser paid Powers more than $185,000 for consulting work and direct mail that the candidate acknowledges went negative but, he insists, only after his opponent did. And Niederhauser emerged victorious.

In 2008, Powers ran Mark Shurtleff's successful re-election bid for attorney general, with Swallow pitching in with fundraising help. Huge sums of money flowed to Shurtleff's campaign from payday lenders and online-marketing firms.

"You've got to be able to raise the money and spend the money to do it right," Shurtleff said at the time.

Powers earned more than $345,000 for his work on the campaign, and Shurtleff won handily. Powers also helped to elect state Rep. LaVar Christensen, was key in helping state Sen. David Hinkins grab what had long been a Democratic-held Senate seat, and tried but failed to help House Speaker Greg Curtis retain his seat in a bruising battle.

Soon after the 2008 election, Powers, Shurtleff and Swallow began laying the groundwork for Shurtleff to run either for governor or against three-term U.S. Sen. Bob Bennett, while Swallow eyed taking Shurtleff's job as attorney general.

But Shurtleff took a pass on the Senate bid, citing his vdaughter's health issues. Powers was hired in 2010 by the conservative Club for Growth to lead efforts in the state to knock off Bennett, who was seen as too moderate.

Republicans ousted Bennett at the state GOP convention, and Powers joined Lee's Senate bid. Lee paid Powers' firm, Guidant Strategies, nearly $220,000 through his 2010 election and up to as recently as last July for various direct mail, polling and other consulting work. Swallow, too, helped raise money for the Lee campaign.

Tim Bridgewater, who lost to the Swallow-Powers duo three times — when seeking the Republican nod for Congress in 2002 and 2004 and then the GOP Senate nomination in 2010 — said the two showed a clear pattern in their campaigns.

"There's been a long history with these guys," said Bridgewater, "from my races for Congress to my race for Senate, of doing things that were unethical and misleading to voters."

Powers also did direct-mail work for Herbert's 2010 election bid, records show, as well as state Reps. Derek Brown and Steve Eliason.

Heading toward the 2012 cycle, Powers was clearly the pre-eminent Republican campaign operative on Utah's political scene.

In 2012, for example, Hatch paid Powers' firm nearly $1.5 million for its services.

Hatch's campaign manager, Dave Hansen, said he hired Powers to do its direct mail because he was good at what he did, worked hard and knows Utah.

"Ideally, you want to have someone in-state and, to be honest with you, there aren't a whole lot of vendors who do political mail," Hansen said. "He was always very good. I found if you needed something quick, he'd produce it quick."

Former state Rep. Carl Wimmer paid Powers' firm nearly $40,000 for work on his failed 2012 bid in Utah's 4th Congressional District. He did work for John Dougall's successful bid to be state auditor and the Utah House campaigns of Brown, Eliason, and Jon Stanard and Senate bids for Aaron Osmond, John Valentine and Evan Vickers.

During those races, Niederhauser said that Powers hit too hard, and he and fellow Sen. Howard Stephenson recorded a video message pointedly calling for civility in the campaigns.

"What we were seeing in those races a couple of years ago, was just completely different than what I'd experienced [with Powers]." Niederhauser said. "I felt like it was over-the-top."

Another of Powers' races that year was Swallow's bid to become attorney general. He won that contest convincingly and, in the process, Guidant was paid nearly half a million dollars by Swallow's campaign and three associated political-action committees — all for running a race that Swallow captured by more than 30 percentage points without ever having run a television ad.

But his role in getting Swallow elected could lead to his downfall.

Hiding donors • Kirk Jowers, director of the Hinckley Institute of Politics at the University of Utah and an expert on campaign-finance laws, said that Powers "really did become the go-to guy for a lot of our major figures."

But what Jowers had been hearing recently were questions about the legality of Powers' fundraising practices.

"He seemed to have the reputation," Jowers said, "of being the master of legally laundering [campaign] money."

House investigators have spelled out how Powers set up a shadow finance strategy that would enable him to conceal much of the political activities for the Swallow campaign and others.

Powers established a nonprofit, called the Proper Role of Government Education Association, that investigators said raked in more than $450,000 — the bulk of it from various payday-lending interests that could prove a liability to Swallow's candidacy.

He transferred some of the money to another nonprofit, Energy Alternatives Inc., which then moved the funds to the Nevada-based It's Now or Never PAC. That PAC spent $140,000 on ads attacking Swallow's Republican primary opponent, Sean Reyes.

Reyes lost his duel to Swallow, but Herbert appointed him as attorney general after Swallow stepped down last month.

The practice of shielding donors from disclosure through the use of nonprofits is legal and used frequently by political operatives from both parties.

And Powers used the Proper Role of Government nonprofits to conduct other political activities.

Powers also moved about $43,000 so-called "dark money" from the Proper Role of Government Education Association into the Proper Role of Government Action Fund, where it was spent on get-out-the-vote efforts for Mitt Romney's failed presidential campaign, records show.

The group poured resources into defeating then-state Rep. Brad Daw, who had sponsored legislation cracking down on payday lenders. It sent a dozen direct mailers to voters in Daw's district and sent one of the anti-Daw fliers to state lawmakers — viewed at the time as a clear warning that if they followed Daw's lead, they would meet the same fate.

Daw lost the GOP nomination to Dana Layton. On its website, Guidant boasts how it was able to overcame a 25-point deficit at the start of the campaign in defeating the incumbent.

All of that was, on the surface at least, legal.

In the aftermath of Daw's defeat, the Utah Legislature sought to tighten its campaign reporting, requiring corporations — including nonprofits like Powers' operations — to disclose their political activities.

But it's another disclosure — this one to the Internal Revenue Service — that may spell trouble for Powers.

Investigators in a criminal probe of Swallow, Shurtleff and apparently Powers obtained a search warrant to seize emails belonging to Powers and another employee. A warrant, unsealed last week, cited a confidential source who worked for Powers. The source and Powers, according to the warrant, concocted a bogus ledger and sent it to the IRS to conceal how much the Proper Role of Government Education Association had raised and spent on political causes.

IRS rules set limits on how much nonprofits can actually engage in political activities without losing their status and having to disclose their donors. The source told investigators that the Proper Role of Government Education Association would have violated that limit if the actual figures had been reported.

The warrant said investigators were also seeking evidence of other crimes, including bribery, witness tampering, obstruction of justice and communications fraud.

Powers' attorney, Wally Bugden, declined last week to address specifics of the allegations in the warrant, except to say that his client had met all his legal obligations. Bugden said Powers complied with a law both political parties use, and if people don't like it, then the law needs to be changed.

"The whole thing surprises me. I'm sick about it, just sick about it," said Warren, the political consultant. "I don't know how we came to this point. … If it's true, it's a serious charge."

Jowers said that, if Powers avoids a criminal conviction, he could emerge from his ordeal even more powerful.

"From what I've seen in other states where something like this happens, if he makes it out of this without being convicted, he probably comes back stronger," Jowers said. "It almost enhances their reputations. … Notoriety is often very valuable in politics."

gehrke@sltrib.com

Twitter: @RobertGehrke —

Powers' players

Here is a list of clients of Jason Powers' Guidant Strategies consulting firm and the money it received, based on campaign financial-disclosure records:

2012

U.S. Sen. Orrin Hatch: $1,479,180

Former Attorney General John Swallow: $377,284

Utah's Prosperity Foundation***: $69,496

Proper Role of Government Defense Fund**: $66,730

Utah Republican Party: $63,254

State Sen. John Valentine: $54,324

U.S. House candidate Carl Wimmer: $39,331

State Sen. Evan Vickers: $35,100

House candidate Sarah Nitta: $27,632

State Auditor John Dougall: $19,370

State Rep. Derek Brown: $18,175

Former state Rep. Bill Wright: $15,685

State Sen. Aaron Osmond: $14,648

PAC For Utah's Future****: $11,921

State Rep. Steve Eliason: $8,726

State Sen. Curt Bramble: $5,000

Salt Lake County Republican Party: $5,000

State Rep. Jon Stanard: $4,300

State Rep. Dana Layton*: $3,828

State Sen. David Hinkins: $2,428

2010

U.S. Sen. Mike Lee: $218,967

PAC For Utah's Future****: $103,453

Friends of Shurtleff: $95,941

Utah Republican Party: $58,816

Gov. Gary Herbert: $11,236

State Rep. Derek Brown: $7,000

State Rep. Steve Eliason: $3,641

State Sen. Wayne Niederhauser: $2,112

Salt Lake County Republican Party: $1,792

2008

Former Attorney General Mark Shurtleff: $345,585

State Sen. David Hinkins: $84,452

Former House Speaker Greg Curtis: $72,653

State Rep. LaVar Christensen: $4,000

Utah Republican Party: $2,000

2006

State Sen. Wayne Niederhauser: $183,597

Former State Sen. Jon Greiner: $37,418

* Dana Layton paid the Proper Role of Government Defense Fund, which Powers ran, for lawn signs and a telephone town hall

** Powers ran the Proper Role of Government Defense Fund, which reported doing work for Layton and Republican presidential candidate Mitt Romney

*** A PAC supporting John Swallow

**** A PAC operated by Mark Shurtleff

Note: Payments by the Lee campaign run beyond the 2010 election and are as recent as July 2013