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As his industry faced scrutiny, Utah lawmaker donated to Swallow

State senator’s firms gave to soon-to-be A.G., seen as friend to finance-coaching industry under intense federal scrutiny.

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Critics — including state Sen. Todd Weiler, R-Woods Cross, who is pushing to have Utah’s attorney general appointed rather than elected — have questioned why Swallow and Shurtleff were getting such large amounts from these businesses.

"I can’t reconcile that," Weiler has said, "unless the donors are expecting, maybe, that person can offer them something in return."

At a glance

Allegations against Swallow and Shurtleff

Utah Attorney General John Swallow and predecessor Mark Shurtleff have come under scrutiny on a number of fronts:

Bribery allegation » Indicted St. George businessman Jeremy Johnson has, at times, accused Swallow of helping to arrange to bribe Senate Majority Leader Harry Reid, D-Nev. Swallow says he only helped Johnson set up a lobbying deal.

Special consideration? » Three Utah businessmen have said Swallow, as a fundraiser for Shurtleff in 2009, suggested that a contribution to Shurtleff’s campaign would get them special consideration if there were complaints about their operations to the attorney general’s office.

Rules violation? » A complaint has been made to the Utah State Bar by the state’s former director of consumer protection, alleging Swallow violated attorney-client rules by discussing a consumer-protection case with a potential donor and suggesting the target meet with Shurtleff.

Withholding information? » The lieutenant governor’s office is in the process of hiring a special counsel to investigate a complaint that Swallow concealed business interests on his candidate financial disclosure forms, including a company central to the Johnson deal.

Posh vacations » Convicted businessman Marc Sessions Jenson said Swallow and Shurtleff took posh vacations to his Newport Beach, Calif., villa on Jenson’s dime while he was free on a plea deal with the attorney general’s office. During the trips, Jenson said they pressed him for fundraising help and other financial deals.

$2 million solicitation? » Businessman Darl McBride provided a recording of a 2009 breakfast meeting in which Shurtleff offered him $2 million to take down a website criticizing Mark Robbins, Jenson’s former business partner. Shurtleff said he could get the money from Jenson because of his plea deal. Jenson said he refused.

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That didn’t happen in his case, according to Osmond. He said his companies — he has since resigned and is now a vice president at Certiport — were looking for a friend in state government after federal regulators indicated they were going to clamp down on the "financial education" industry.

"Our primary interest in John," Osmond said, "was he was pro-business, supportive of our industry, someone who would help us figure out how to manage the interference with the federal government to work through those regulatory issues."

Similar donations were not given in the gubernatorial race because that was seen as a lock for Republican incumbent Gary Herbert, Osmond said, and the owner of his companies, Joseph Johnson, did not want to contribute to local races.

Still, the companies helped raise funds for Sen. Mike Lee’s campaign and former state lawmaker Carl Wimmer’s unsuccessful congressional push, though Osmond said they did not donate any money.

Osmond said he was introduced to Swallow by Shurtleff confidant Rob Stahura, whom Osmond had hired as vice president of sales at one of the companies where he was CEO. Stahura also previously had a role at Mentoring of America, a coaching business and Shurtleff donor cited numerous times by regulators.

Osmond called Stahura a "key influence" in the decision to help Swallow.

"Ultimately, I made the formal recommendation that supporting John as a candidate was good for Utah and for our industry," Osmond said. "The owners then had to decide on their own to donate or not."

Powers, also a former campaign consultant for Shurtleff, ran Osmond’s campaign for the state Senate. But Osmond said "in no way was any donation to John Swallow tied to Jason’s involvement as my campaign manager."

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Swallow accepted contributions from a number of companies that had been cited for violations. Osmond said the companies of which he was CEO or affiliated with — Real Estate Investor Education, Booker T. Equity, Coventry Acquisition Group, Intelligent Wealth and Investor Brokerage Solutions — were largely clear of unresolved consumer complaints while he was CEO from July 2007 to January 2012, when he built them up to $30 million in annual revenue.

But Real Estate Investor Education, which did business as WealthRock, was slapped with a cease-and-desist order from the Utah Division of Consumer Protection. One of the complaints came before Johnson bought the company and before Osmond became CEO from a customer who bought a real-estate investment program for $25,000.

In responding to the complaint, Osmond made promises he knew the company was unlikely to keep since it was in shaky financial condition, the judge ruled.

The Division of Consumer Protection cited the company for failing to provide services and materials for which customers had paid, conducting telemarketing without registering those activities with the state and making untrue statements during calls.

Osmond defended his record as CEO, saying during his time there were no outstanding complaints with the Division of Consumer Protection or the attorney general’s office and said that the company maintained a B or A rating from the Better Business Bureau.

Soon after Osmond left Real Estate Investor Education, it went out of business.


Twitter: @TomHarveySltrib

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