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(Djamila Grossman | Tribune file photo) Sen. Mike Lee, R-Utah, was sworn in last year by Vice President Joe Biden, as his wife, Sharon, holds the Bible. Getting the federal debt under control has been his No. 1 issue.
Complaint to target alleged laundered donations to Mike Lee
Politics » Experts doubt FEC would punish the senator for accepting allegedly laundered funds.
First Published Jun 05 2014 11:17 am • Last Updated Jun 05 2014 08:59 pm

The Alliance for a Better Utah is preparing a federal election complaint stemming from revelations that indicted businessman Jeremy Johnson told investigators he laundered $50,000 in campaign contributions — at John Swallow’s request — to Mike Lee’s successful 2010 Senate bid.

"If Utah’s freshman senator did indeed allow, whether by ignorance, negligence or complete disregard of the law, a sizable amount of money to be illegally funneled into his campaign, then Sen. Lee should be held accountable," the progressive advocacy group said Thursday in a statement.

At a glance

The bounced checks

The Utah House investigation of John Swallow identified four checks — totaling $9,600 — to Mike Lee’s Senate campaign that bounced. The contributions ostensibly were from Arvin Lee Black (recently sentenced to prison for a Ponzi scheme), Atia Black and Matthew Black — all of whom have ties to Jeremy Johnson.

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Experts doubt that Lee’s campaign, in the end, would be punished; candidates usually aren’t.

The Republican senator’s spokesman said Wednesday that neither Lee nor his campaign knew of any arrangement with Swallow, who resigned in December after less than a year as Utah’s attorney general.

Johnson told investigators in the long-running criminal probe of Swallow and his predecessor, former three-term Attorney General Mark Shurtleff, that Swallow directed him to give $50,000 to other individuals, who then donated the money to Lee to bypass caps on federal campaign contributions.

Johnson said he also did the same for Shurtleff, kicking in $113,600 through straw donors to the then-attorney general when he was exploring his own run for Senate in 2010.

Shurtleff said he, like Lee, was unaware of any such arrangement.

Johnson had been Shurtleff’s top financial backer during his previous runs for office, with more than $200,000 pouring into Shurtleff’s causes from Johnson, his business or his associates.

Swallow’s attorney, Rod Snow, said Thursday he is surprised Johnson’s allegations are taken seriously.

"Someone [like Swallow] who had twice run for Congress and was aiding in the fundraising for serious senatorial candidates for the United States Senate," Snow said, "is not going to get involved in straw donations."

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He added that, to his knowledge, none of the contributors told Swallow they had used Johnson’s money.

"Johnson’s game plan has been to try and trade up to save himself," Snow said, "and the only people who are buying into his plan are members of the press [who] do not care who [they] recklessly damage in the process."

The new information came to light in an affidavit accompanying a search warrant unsealed Wednesday afternoon.

"Campaign election law violations are serious business," the Alliance for a Better Utah said in its statement. "Unfortunately, too many of Utah’s elected leaders seem to treat election laws like the rest of us treat speed limits — as if they were merely suggestions."

Matt Sanderson, a campaign finance law attorney with the Washington, D.C., firm Caplin & Drysdale, said the Federal Election Commission has gone after these so-called "straw donors" in the past.

"They have come down hard on people who have done that, both entities and individuals," Sanderson said, "and they’ve repeatedly penalized them."

The FEC can impose only civil penalties, but if there is a "knowing and willful violation," it can be referred to the U.S. Department of Justice for criminal prosecution.

It is unlikely, however, that the FEC would go after the Lee campaign.

"From the campaign’s perspective, it’s relatively opaque as to where the money is originally coming from," Sanderson said. "All they see is a check coming in from donors X, Y and Z. It’s impossible to tell where donors X, Y and Z got that money."

If the FEC does pursue the case, it could take years for the matter to run its course, Sanderson said. Any fines usually are for the amount in question — in this case the $50,000 — multiplied by some other figure, depending on the severity of the violation.

Johnson’s allegations against Swallow last year sparked the scandal that eventually drove the Republican attorney general from office. Johnson said Swallow helped orchestrate plans to aid the embattled St. George businessman in fighting a federal investigation of his I Works business.

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