Bribery or lobbying? Jeremy Johnson says there's no difference

Judge warns man tied to A.G. scandal to stop talking about cases

Published: Friday, Feb. 1 2013 5:20 p.m. MST

Jeremy Johnson leaves federal court in Salt Lake City Friday, Feb. 1, 2013. He has accused Utah Attorney General John Swallow of helping set up a $600,000 payment intended to enlist Senator Harry Reid in an effort to derail an FTC investigation into Johnson's company.

Jeffrey D. Allred, Deseret News

SALT LAKE CITY — Indicted businessman Jeremy Johnson says the word "bribe" never came up when he talked with Utah Attorney General John Swallow about how to keep federal regulators from shutting down his Internet marketing enterprise.

"You've (the media) characterized it as a bribe. I characterize it as if you want something, you gotta pay for it. I know now that's what it looks like. Truthfully, you'd have to define the difference. What's the difference between bribe and lobbying?" Johnson said.

Johnson accused Swallow of helping to set up a $600,000 payment intended to enlist Senate Majority Leader Harry Reid in an effort to derail a Federal Trade Commission investigation into Johnson's company, iWorks.

"It's nothing like what's being portrayed where John called me and we devised a scheme to bribe a senator. It was nothing like that," the 37-year-old St. George man said Friday. "Maybe it's semantics. But lobbying, well-placed money, influence peddling — it's all the same. You're putting money somewhere to get something."

Johnson made the comments in an interview Friday morning, hours before a federal judge essentially muzzled him pending the court's decision on the prosecution's request for a gag order.

"I'm really not supposed to say anything," he said after the court hearing.

U.S. Magistrate Judge Paul Warner sternly warned Johnson not to talk to the media or potential witnesses in both his civil and criminal cases or face going to jail. Warner will make a decision about a permanent gag order in March.

Johnson did numerous interviews before and since his allegations against Swallow surfaced three weeks ago. He also frequently uses social media to attack federal prosecutors and the FTC.

Also Friday, Johnson's court-appointed attorney, Nathan Crane, who constantly tried to dissaude Johnson from making public comments, withdrew from the case. The judge appointed high-profile defense attorney Ron Yengich to replace him.

"I will tell you, the stakes are very high for you. This is not a game," Warner said in telling Johnson to cooperate with his new attorney.

Yengich told the judge he won't talk to the press about the case if the government agrees to do the same.

"I don't believe the case should be tried in the media in any event," Yengich said. "It goes both ways."

The FTC alleges Johnson bilked online consumers out of nearly $300 million with deceptive "trial" memberships to bogus government grants and money-making schemes. It shut down iWorks and seized all of Johnson's assets in 2011.

Johnson also is charged with one count of mail fraud in connection with his business. Prosecutors say they intend to file additional criminal charges against him.

Swallow denies the allegation that he was involved in a deal to bribe Reid. He called Johnson a liar and a desperate man who is trying to get a better deal for himself with federal prosecutors. Swallow said all he did was introduce Johnson to his friend, the late Richard Rawle, whose connections to federal lobbyists might be able to help but that it wouldn't be cheap.

"He's actually telling the truth in that respect. That is pretty much what his involvement was," Johnson said in the interview.

But, he said, Swallow negotiated the $600,000 price tag before he arranged for him to meet Rawle. Johnson also said Swallow told him Rawle had "invested millions into a certain connection with Harry Reid."

In an interview earlier this month, Swallow said he did not attend a meeting between Rawle, Johnson and others in which they talked about how to get representation before members of Congress.

"That's where this whole arrangement was made. I was not a party to that meeting," he said.

Attorneys for Rawle, who died of cancer last December, issued a statement last week backing up Swallow's assertion that he wasn't at that meeting.

Johnson and a business associate ultimately paid Rawle $250,000. Rawle hired a lobbying firm and an attorney's office, which started making inquiries into iWorks and its industry. But no lobbying took place because the FTC filed its complaint 20 days after they were retained, according to the statement.

Johnson said Swallow was familiar with how iWorks marketed and sold its products and wanted to help get it out from under the FTC investigation. He said Swallow has failed to address that in his public comments about his involvement.

"He felt that the government was wrong. He was trying to help protect a Utah company and a Utah citizen," Johnson said. "He, of course, leaves all that out. I think people would have more respect for him if that's the story he starts telling, which happens to be the truth."

A poll conducted last week for the BYU Center for the Study of Elections and Democracy found that 49 percent of Utah voters who believe that the allegations against Swallow suggest he did something illegal or unethical say he should resign.

E-mail: romboy@desnews.com

Twitter: dennisromboy

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