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Attorney: Swallow’s fee was for consulting

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Steve Griffin | Tribune file photo The office of Utah Attorney General John Swallow says the Utah State Bar has closed one of its investigations into him and has declined to prosecute.

By Robert Gehrke

The Salt Lake Tribune

First published Jan 17 2013 08:05PM
Updated May 20, 2013 10:02PM

A partner on a Nevada limestone project says Utah Attorney General John Swallow earned the $23,500 that the late Check City founder Richard Rawle paid him two years ago for consulting work on the project and not for any involvement in helping embattled businessman Jeremy Johnson fight off federal regulators.

Allen Young says claims to the contrary are absurd and that he and Rawle’s family are "very upset" that Rawle— whom Young calls his best friend — is having his name unfairly tarnished.

Young, Rawle and another man, Drew Downs, had been working since 2009 to lay the groundwork for what they hope will become the first cement plant to serve Las Vegas. Now, cement is shipped in from California, Arizona or elsewhere. If successful, the project could net the organizers hundreds of millions of dollars.

But when Rawle was stricken in 2010 with cancer, which claimed his life last month, he brought Swallow in to represent him in the project.

"He asked if he could bring John in, and he said he would pay him because he couldn’t be the laboring oar," Young, an attorney, said Thursday in an interview in his Provo law office.

Swallow, then Utah’s chief deputy attorney general, attended three or four meetings on the project and participated by phone in two or three others. He also put the group in touch with two lawyers who tried to arrange meetings with the Moapa Band of Paiute Indians and the Bureau of Indian Affairs to advance the project — meetings which ultimately never took place.

For his work, Swallow received $23,500, which was paid from Rawle’s RMR Consulting to Swallow’s P-Solutions in late 2010 and early 2011. There was never a contract or invoices, Young says, and the whole deal was worked out between Rawle and Swallow.

But Young says there is no doubt in his mind that Swallow was reasonably compensated for what Young estimates must have been easily 100 hours’ worth of work.

That money has come under scrutiny because it came from a $250,000 payment to Rawle arranged by Johnson, an Internet get-rich-quick guru who is now under federal indictment. Johnson has said the $250,000 — which Swallow helped broker — was intended as the first installment on a $600,000 bribe to be paid to Senate Majority Leader Harry Reid to head off a Federal Trade Commission investigation into the business practices of Johnson’s I Works company.

Reid, D-Nev., denies any knowledge of the alleged scheme. Swallow insists the money was intended to hire lobbyists to help sway regulators, and, in a declaration signed three days before his death, Rawle lays out a similar version of events.

Young says the declaration was drafted by Cort Walker, who attended Rawle’s first meeting with Johnson. Young reviewed the details with Rawle, who signed it. Young also signed as a witness.

Rawle was lucid and fully aware at the time, Young says, and he assumes that Rawle knew Johnson was threatening to go public with his bribery claim, so the dying man wanted to make a record of his version of events.

Young says he believes Rawle originally agreed to meet with Johnson because he saw him as something of a kindred spirit — Johnson believed he was being mistreated by the FTC, and Rawle was constantly having to defend his payday-loan business from government critics.

"Richard had done very well for himself," Young said. "He didn’t need another $100,000."

But when Johnson began demanding a refund and making threats if the money wasn’t returned, Young says Rawle’s opinion changed and by the end he saw Johnson as a "flimflam artist."

Rawle eventually agreed to return $75,000 to Scott Leavitt, Johnson’s business partner who Young says had mortgaged his home to come up with $200,000 of the money.

Another $100,000 was paid to two lobbyists, including one with whom Rawle had a close personal relationship and had been on hunting trips with. Young says it was not his place to identify the lobbyist.

Swallow was paid $23,500 out of the funds for the consulting work on the cement project, according to Rawle’s declaration.

The project, Chaparral Limestone & Cement Co. LLC, is aimed at lining up limestone mining claims, water rights, power and other permits to build the first cement plant to service Las Vegas. The goal is to "bundle the sticks" and then sell it to a company that can invest the tens of millions of dollars to build the quarry.

"It’s kind of a long shot, but if we hit the bull’s-eye, we can make lots of money," Young said he told Rawle when pitching him the deal in 2009 or early 2010.

The group has bought the rights to 500 acres of limestone deposits just off Interstate 15, about midway between St. George and Las Vegas, and believes it could produce about a million tons a year.

"John would come to these meetings, was involved in strategizing on what to do, who to do it with, how to do it," Young said. "I didn’t specifically ask him if his employer [the Attorney General’s Office] allowed him to do that" but assumed it was permitted.

Chaparral also sought to approach the Moapa Band about potential limestone deposits on the Indian land, and Swallow recruited David Colvin, the former counsel for the Las Vegas Band of Paiute Indians and a law school friend, to try to set up meetings with the Moapa Band’s governing council. The meetings never happened.

Swallow also recruited another lawyer, Dennis Ickes, to contact the Bureau of Indian Affairs on Chaparral’s behalf, but the company didn’t hire Ickes.

Young’s description of Swallow’s role differs somewhat from what Swallow told Fox 13 News in a recent interview. Then, the attorney general described his consulting work as "market research" and "some relationship research," along with finding people who had connections to the tribe.

Swallow has declined to respond to questions from The Salt Lake Tribune, citing a potential federal investigation into Johnson’s allegations.

More than 14 months after Swallow was paid — after Johnson had confronted him about his involvement in the deal, and Swallow had transferred management of his P-Solutions consulting company into his wife’s name — Swallow returned the money to RMR Consulting and asked to be paid from a different account.

Young says he never discussed why Swallow did that, but he suspects it was because being paid out of the money Johnson and Leavitt had provided didn’t look right.

gehrke@sltrib.com

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