Matheson helped Johnson in FTC fight — sort of
By Robert Gehrke
The Salt Lake TribuneFirst published Feb 07 2013 07:49PM
Staring at a looming federal investigation, Jeremy Johnson and his business partners reached out to various political leaders for support.
They didn’t get much.
Only one member of Utah’s congressional delegation — Rep. Jim Matheson — contacted the Federal Trade Commission on behalf of Johnson’s company, according to documents obtained under an open-records request.
Matheson’s office dismissed the letters as routine.
"It is a standard constituent-services thing, one of the things our district office typically does," said Mike Reberg, district director for Matheson.
In September 2010, Bryce Payne — general manager of Johnson’s I Works, which used online sales to market a disk purporting to help buyers get government grants, and an owner of one of the scores of I Works shell companies — contacted Matheson’s office.
Payne said I Works was being targeted unfairly by the FTC and complained that the agency had already decided that all the businesses with a model similar to I Works were frauds.
"What I would like is some pressure to be put on the commissioners at the FTC to stop the ‘witch hunt,’ " Payne asked of Matheson’s office.
Payne invited the Utah Democrat to tour I Works’ facility and said that Utah Attorney General Mark Shurt-leff had visited the operation and "was impressed."
Matheson forwarded the concerns to Jeanne Bumpus, the FTC’s congressional liaison, with a form letter asking her to help resolve the issue.
"It’s not necessarily taking a side," Reberg said, "as much as it is saying, ‘What’s going on?’ "
Payne’s overture to Matheson came at about the same time that Johnson was reaching out to Utah’s chief deputy attorney general, John Swallow, seeking intervention in the FTC probe
Swallow put Johnson in touch with Richard Rawle, late owner of the Provo-based Check City payday-loan chain, and Johnson paid him $250,000, the first installment on a $600,000 agreement. Johnson says the money was meant to sway Senate Majority Leader Harry Reid; Swallow says it was meant to hire lobbyists.
Payne went back to Matheson in mid-November, stating that the probe had forced I Works to shut down its business, costing 200 people their jobs.
Matheson again sent the information to the FTC with the same form letter. The agency responded a month later, after it had sued I Works, alleging the company had engaged in deceptive business practices.
That case is ongoing.
According to files provided by Matheson’s office, Payne again sought help, in January 2011, requesting a congressional investigation of the FTC. But because of the agency’s case, Matheson’s staff told him it would not be appropriate for his office to take any further action.
Johnson sought meetings with other elected officials.
In one instance, Shurtleff arranged for Johnson to meet with Sen. Orrin Hatch, R-Utah. The purpose was ostensibly to discuss some of Johnson’s charity work, according to Hatch spokesman Matthew Harakal.
"Mr. Swallow accompanied Mr. Johnson to the meeting," Harakal said, "and, during the course of the meeting, Mr. Johnson told Senator Hatch that he thought he was being treated unfairly by the Federal Trade Commission."
The senator suggested Johnson follow his attorney’s advice and "never weighed in on Mr. Johnson’s behalf with the FTC or any other agency on this matter."
Johnson also sought out Republican Gov. Gary Herbert, who refused to meet with the I Works founder. Several requests went to Herbert’s campaign, "all of which were declined by the campaign manager," according to Herbert’s spokeswoman, Ally Isom.
Johnson, his family and business partners contributed more than $200,000 to Shurt-leff’s campaigns. I Works gave $5,000 to Herbert’s campaign in June 2009. Johnson kicked in $2,400 to Mike Lee during the Utah Republican’s successful 2010 Senate campaign.
But Lee’s office said neither the senator nor any of his staff met with Johnson.
Johnson did not contribute to Matheson.