Former Attorney General John Swallow hid donations from payday loan industry, investigators say

Published: Friday, Dec. 20 2013 10:35 a.m. MST

Steve Reich, lead attorney for the special investigative committee, and John L. Fellows, legislative general counsel, confer during a House Special Investigative Committee meeting at the Capitol on Thursday, Dec. 19, 2013.

Laura Seitz, Deseret News

SALT LAKE CITY — John Swallow did not want voters to see him as the payday loan candidate, so his campaign devised a strategy to hide hundreds of thousands of dollars in contributions he received from the industry.

At the same time, Swallow told payday lenders he would go to bat for them with federal consumer protection regulators if elected attorney general.

"I am ready and willing to help lead out on that," he wrote in a June 29, 2011, email to Kip Cashmore, a payday loan industry leader in Utah.

Chief investigator Jim Mintz told the Utah House Special Investigative Committee on Friday that Swallow's 2012 run for attorney general had three aspects — transparent, obscured and hidden.

"That kind of flow of benefits back and forth with elected officials is pay-to-play," Mintz said. "If it isn't dirty, why is it kept so secret?"

Swallow had relationships with several businessmen that benefited him personally, professionally and politically, said committee lawyer Steve Ross.

Ross, Mintz and lead attorney Steve Reich described in detail the complex dealings Swallow had with each of them, leaving Rep. Lynn Hemingway, D-Salt Lake City, to say, "John Grisham couldn't dream this stuff up, could he?"

Ross said investigators uncovered facts that show state laws were skirted if not broken.

The findings outraged committee members just as they did Thursday when investigators described intentionally deleted data and fabricated documents to cover any appearance of wrongdoing.

"This is serious," said Rep. Mike McKell, R-Spanish Fork. "There's a strong, strong, strong likelihood that somebody should go to jail."

The committee intended the two-day report — including the eight-hour presentation Friday — as a wrap on its four-month investigation, but lawmakers say they intend to seek more money to continue and expand the nearly $3 million inquiry.

"I don’t think we’re done yet," said House Majority Leader Brad Dee, R-Ogden. "We are appalled by some of the information we received today."

Dee said the committee could find a "treasure trove" of information about how campaigns are run in Utah if it presses on. One of the committee's duties is to recommend election law reform.

"We cannot stop here," said Rep. Lee Perry, R-Perry. "We need to clean our house in the state of Utah."

Swallow's campaign consultant Jason Powers ran the payday loan money through a convoluted network of political action committees and nonprofit entities to hide its sources, Mintz said. He ultimately used the cash to run attack ads against Swallow's GOP primary election opponent Sean Reyes and former GOP lawmaker Brad Daw, who ran a bill to more closely regulate payday lending.

"This whole thing was one structure," Mintz said. "It makes the point that somebody thought this whole thing through."

Mintz said a substantial amount of the money came from the payday loan industry, including Swallow's friend and mentor, the late Richard M. Rawle. Swallow worked as lawyer for Rawle's company Softwise Inc., the parent firm for the Check City chain.

Softwise attorney Sam Alba sat through both days of committee hearings.

"There are two sides to the story, and you are only getting one," he said afterward.

Alba, a former federal judge, said he intends to file a written response to the committee's report but had nothing more to say.

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