New Attorney General John Swallow calls for investigation of claims against him
Others also calling for probe of allegations made by ex-multimillionaire
Jeffrey D. Allred, Deseret News
SALT LAKE CITY — Utah Attorney General John Swallow called for an investigation Monday into allegations that he brokered a deal to stifle a federal probe into a St. George businessman.
Swallow, a Republican, asked the U.S. Attorney's Office for Utah to look into Jeremy Johnson's claim that Swallow helped arrange a $600,000 deal to enlist Senate Majority Leader Harry Reid to quash a Federal Trade Commission investigation of his Internet marketing company in 2010.
"I deny I have ever participated in a scheme to bribe a member of Congress," Swallow wrote to U.S. Attorney for Utah David Barlow. "I expect no special treatment. I do not hold myself or anyone else above the law."
Barlow replied to Swallow later Monday, assuring him in a letter that the U.S. Attorney's Office and Department of Justice place a high priority on alleged federal crimes. All such matters, he wrote, are handled by the FBI and federal prosecutors.
"We will carefully review any information you or others provide and take any necessary and appropriate action," Barlow wrote.
In his first albeit brief interview since the story broke late Friday night, Swallow said Monday, "I categorically deny these allegations are true, and it's personal. I can't believe someone could make up a lie like that about someone who's just coming into office."
Swallow said maybe Johnson is upset because he wasn't willing to broker a meeting for him with the U.S. Attorney's Office several months ago.
Federal prosecutors indicted Johnson in June 2011 for mail fraud in connection with his once-thriving enterprise, iWorks. The FTC alleges he scammed consumers out of millions of dollars by billing them for products and services they never ordered.
Swallow said he never talked to federal prosecutors or pressured them to back off Johnson's criminal case, nor did he talk to anyone at the FTC about the civil complaint.
"The answer is categorically no. Nor would I," Swallow said.
Swallow's letter to the U.S. attorney comes after the Utah Democratic Party and others, including a prominent Republican, called for an investigation into his activities involving Johnson.
Meantime, Reid's office issued a statement rebutting Johnson's allegations.
"Sen. Reid has no knowledge or involvement regarding Mr. Johnson's case," the statement said. "These unsubstantiated allegations implying Sen. Reid's involvement are nothing more than innuendo and simply not true."
Swallow said the only thing he did was put Johnson in touch with a friend and former client, Richard M. Rawle, who had experience with federal lobbyists and might be able to help him with federal regulators. Rawle also had contributed to Reid's 2010 re-election campaign.
"It didn't seem at the time to me that it was that big of a deal for me to go ahead and say to him, 'I'll introduce you to someone I know who who knows people who might be able to help you for a fee,'" Swallow said, adding he knew and believed in Johnson and Rawle.
Johnson supports his allegations with emails, financial records and a transcript of a secretly recorded April 2012 conversation with Swallow that appear to indicate Swallow did more than introduce him to Rawle.
The state Democratic Party sent a formal request Monday to U.S. Attorney General Eric Holder for a special prosecutor to conduct an independent investigation of the allegations against Swallow. The party also started an online petition seeking an investigation.
"This is not a partisan issue. Everyone in the state wants to know if the attorney general or their high government officials are crooks. It's that simple," said Utah Democratic Party Chairman Jim Dabakis, who also serves as a state senator.
Former GOP Congresswoman Enid Greene Mickelsen suggested Monday the creation of a "truly independent investigatory board" made up of a retired judge and people in the legal community who are not politically affiliated. The panel should be given subpoena power to find out exactly what happened and present it to the public.
"This is the top law enforcement officer in the state. It's not just something that can be, 'Oh no, we're not just going to worry about it,''' she said. "There's significant questions here that for John Swallow's sake, if he's completely innocent, he still needs to get these facts out there so people can have confidence in that."
Mickelsen, former Utah GOP vice chairwoman, said her position won't be popular in her party.
"I know I'm going to be on every Republican's hit list, but I don't care," she said.
Republican Gov. Gary Herbert's office declined to comment when the story first broke but released a statement Sunday.
"All the governor knows is what he has read in the paper, and it would be irresponsible to arrive at conclusions based only on that alone," said Herbert's spokeswoman, Ally Isom. "The fact is there is a current investigation of Mr. Johnson, and federal agencies are aware of the allegations. This is an instance when facts should not be politicized and process should be followed."
The Provo Daily Herald called for Swallow's resignation in a Sunday editorial.
Alliance for a Better Utah, a Democratic-leaning advocacy group, called Monday for the Utah State Bar to investigate Swallow's activities to determine whether he violated its rules of professional conduct.
"Lawyers self-regulate, making the bar association uniquely positioned to address Swallow's ethical conduct as the state's chief law enforcement officer," said Maryann Martindale, Better Utah executive director.
Both Martindale and Mickelsen said the allegations against Swallow renew the need for the Utah Legislature to review ethics laws — which Mickelsen described as "porous" — for elected officials.
"If we had clearer laws that spelled out these bright lines, we wouldn't be having so many examples of this where it just seems like the public doesn't feel confident, and they have reason not to feel confident," Mickelsen said.
Speculation swirled during the Utah attorney general's race last year that Swallow was the subject of a federal investigation.
The U.S. Attorney's Office in Salt Lake City took the unusual step of issuing a statement Sunday based on the recent news reports regarding Swallow.
"It has been reported that federal prosecutors informally agreed not to prosecute John Swallow. This assertion is completely untrue," the office said. "This statement does not imply that there is or is not an investigation pending against Mr. Swallow."
The FBI also would not confirm or deny an investigation of Swallow.
In a prepared statement issued late Saturday, Swallow said the FBI has not contacted him about Johnson or Reid, and it hasn't notified him that he is under any investigation. He said he never worried that Johnson was cutting a deal with federal prosecutors.
Johnson placed Swallow's name on a list of people he wanted protected from prosecution should he plead guilty to federal fraud charges. Prosecutors balked at including the names in a proposed plea agreement last Friday and the deal fell apart. Federal authorities said they will now file new criminal charges against Johnson by Feb. 8.
Swallow said he never asked to be on Johnson's list. He said he never talked to federal prosecutors about Johnson's criminal case.
"My attorney also made it very clear to Mr. Johnson's attorney that I did not want to be on any list. Putting my name on the list was another calculated way for Mr. Johnson to draw attention to me and harm me," Swallow said.
Along with his statement, Swallow released an affidavit Rawle signed Dec. 5, 2012, three days before he died of cancer. Rawle explained how he handled a nonrefundable $250,000 consulting fee he received — $50,000 from Johnson and $200,000 from Johnson's business associate Scott Leavitt.
Rawle, who formed a company called RMR Consulting, said he wired $100,000 to lobbyists, took $50,000 as his fee and kept the remainder in an account.
"It is my understanding that the professionals I engaged did make contact with the FTC and did make progress, but the work could not be done in time to delay the filing of the complaint," he wrote.
The FTC filed a civil complaint against Johnson in December 2010, alleging iWorks lured Internet consumers into "trial" memberships for bogus government grants and moneymaking schemes and then repeatedly charged their credit cards for programs they didn't sign up for, totaling nearly $300 million. Leavitt was also named in the complaint.
Federal authorities seized all of Johnson's assets, including aircraft, luxury cars, houses and gold.
Johnson has steadfastly proclaimed his innocence and refused to settle with the FTC.
Rawle said in the affidavit he held on to the remaining $100,000 of the consulting fee because he wasn't wasn't sure how to deal with it after iWorks was placed into receivership.
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