As promised, the Alliance for a Better Utah filed a federal election complaint Wednesday against Sen. Mike Lee, R-Utah, and some of his donors.
Part of it stems from indicted businessman Jeremy Johnson telling investigators he laundered $50,000 in campaign contributions — at the request of former Attorney General John Swallow, who later resigned amid a scandal — to Lee’s successful 2010 campaign.
The other part comes from Lee’s “short sale” of his home in Alpine at a voluntary loss of $400,000 to mortgage-holder J.P. Morgan Chase, and then renting another home from the same campaign donor who had bought his house.
The group’s complaint to the Federal Election Commission said investigations into Swallow showed that Johnson, at Swallow’s request, gave $50,000 to a variety of people and asked them to contribute it to Lee, which violates federal law.
It said multiple checks bounced, showing they came from “gift donations that had not been processed quickly enough.”
Lee said Thursday in response to the complaint, “If Mr. Johnson used straw donors, I was never aware of that. Neither was any of my campaign team.”
Maryann Martindale, lead filer on the complaint, said, “Whether Lee knew of the potential violations or not, he owes it to his constituents … to call for a full, complete and independent investigation into these allegations, to immediately return any illegal donations that are discovered, and to fully cooperate” with investigations.
A second count in the complaint alleges the short sale of Lee’s home gave him financial gain that amounted to an unreported and illegal campaign contribution.
Lee originally bought his home for $1.1 million, but solid it for $720,000 after his election to the Senate when he said he could no longer afford payments. The mortgage holder agreed to the short sale — selling for less than was owed — at a loss of up to $400,000.
The House was bought by Ron McMillan, who had donated $7,500 to Lee’s campaign. Lee then rented another home from McMillan.
The complaint says, “Given the appearance that these transactions were prearranged,” the alliance alleges “that these transactions were not negotiated at arms-length and may have been arranged at prices other than fair market value.”
It said that would amount to “an unreported campaign contribution” in violation of federal law.
Lee has said he paid fair-market rates for rent, and has said the loss of his “dream home” was part of a sacrifice he made to serve as a senator by giving up a lucrative career as an attorney.
Tribune reporter Thomas Burr contributed to this article.