New allegation: John Swallow asked for $120K from jailed businessman

New recording, texts show worries about keeping information secret

By Sammy Linebaugh

For the Deseret News

Published: Wednesday, Dec. 18 2013 10:00 p.m. MST

In the face of the initial allegations in January that the target of the lobbying was a close contact to Senate Majority Leader Harry Reid, and Johnson’s assertions that he was promised help from the powerful senator himself in battling the FTC, Swallow distanced himself from the deal altogether.

“I told Jeremy I could not and would not intervene with the FTC on his behalf, given my position with the state (as attorney general),” Swallow told the Salt Lake Tribune in January.

Reid has denied any knowledge of the deal.

The subsequent release of an audio recording dated April 30, 2012, of a meeting between Swallow and Johnson at a Krispy Kreme shop in Orem — recorded by Johnson — forced the newly elected attorney general to acknowledge some political and ethical missteps, but he has maintained his innocence of allegations that he negotiated the price tag of Johnson’s deal or played any significant role.

Swallow also has previously told the Deseret News that 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 lawsuit.

"The answer is categorically no. Nor would I," Swallow said.

Johnson and four others currently face an 86-count criminal indictment in connection with iWorks.

Before scandal erupted

In February 2012 — nearly three months before the doughnut shop meeting and 10 months before the election — Johnson met with Swallow's campaign manager, Jason Powers, and recorded the conversation. The audio was released to the Deseret News and KSL by iWorks civil attorney Karra Porter.

Powers’ purpose appears to be a meeting of the minds on how to keep his candidate out of unsavory headlines.

“You kind of understand the situation, the quieter we keep things for a little while,” says Powers.

"I understand it, believe me,” Johnson replies.

Both sides, it appears, are motivated to keep under wraps information about the deal in which Johnson and his associate paid $250,000 to Swallow’s former boss, Rawle.

In the recording, Johnson and Powers discuss a partial refund of the payment on behalf of Johnson's associate, who paid the bulk of the money and was threatening to sue to get a portion of it back.

A settlement price of $20,000 is suggested by Powers, which Johnson rejects, saying he does not believe his associate will accept it. They discuss how to hold off any negotiations until after the election, suggesting that a lawsuit by Johnson’s associate would “drag (Swallow) into something that — it’s a bad time,” says Johnson.

“It’s a very bad time, which is why I’m here to talk to you,” Powers agrees.

Also on the recording, Powers and Johnson are heard doing a search on Johnson’s computer for any email exchanges between Johnson and Swallow that might be of concern to the campaign.

“I have a ton of emails. I didn’t realize I emailed him so much,” Johnson says.

Documents obtained by KSL and the Desert News reveal Swallow used as many as four different email addresses from 2009 to 2012.

Powers did not respond to a request for comment.

Porter, in releasing the audio, says its mere existence — along with the emails it references — raises questions about the thoroughness of the Department of Justice investigation of Swallow, which concluded in September without any finding of wrongdoing.

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