Utah prosecutors forward allegations against Sens. Mike Lee, Harry Reid to feds

Published: Friday, March 14 2014 3:11 p.m. MDT

Sen. Mike Lee, R-Utah speaks at the Conservative Political Action Committee annual conference in National Harbor, Md., Thursday, March 6, 2014.

Cliff Owen, Associated Press

SALT LAKE CITY — County prosecutors investigating former Utah Attorneys General John Swallow and Mark Shurtleff say they have come across allegations of wrongdoing by Senate Majority Leader Harry Reid and Utah Sen. Mike Lee.

Salt Lake County District Attorney Sim Gill and Davis County Attorney Troy Rawlings say they're not actively investigating the two senators but have passed along information to the U.S. Department of Justice.

Also, Lee's name came up in the Utah House Special Investigative Committee's report released this week in connection with Swallow's effort to raise campaign funds for him through indicted businessman Jeremy Johnson in 2010.

“We do not have sufficient evidence to convict any United States senator of any state crime, and our focus to date has not been on that prong of allegations and information received," Rawlings said. "It is our hope that the DOJ will re-engage related to any potential federal aspects of this case. However, we will not ignore potential state ramifications."

ABC News and the Washington Times ran a lengthy story Thursday raising questions about whether Lee and Reid sought or received money or other benefits from donors and fundraisers in connection with doing political favors or taking official actions.

The story also questions whether Lee provided accurate information when he bought, then sold his Alpine home for a big loss to a campaign contributor and federal contractor, leaving his mortgage bank to absorb large losses.

Gill said those allegations popped up in the course of the county investigation.

"Are we aware of this? Yes. Are they potentially serious allegations? Absolutely," he said.

But, Gill said, there are a "host of different little things out there" that are outside his jurisdiction but deserve to be looked into by the appropriate authorities. He said he couldn't be specific because of the ongoing investigation.

Lee spokesman Brian Phillips said on Friday: "The article doesn’t present any new information about Sen. Lee and he is looking forward to clearing things up." As it relates to the sale of the home, he said the senator filed all the required documentation.

The Utah House report released Wednesday tied Lee to Swallow and his effort to raise money for the senator's 2010 election campaign. Swallow — chief deputy attorney general at the time — enlisted Johnson to help but only after clearing it through his boss Shurtleff, who was the attorney general.

Swallow asked Shurtleff in a February 2010 email: "can i (sic) introduce Mike Lee to Jeremy Johnson?" Shurtleff replied, "Sure." Johnson was a large donor to Shurtleff's campaign fund.

Swallow was "working hard" to raise money for Lee before the June 22 primary election, according to the report.

An email exchange between Swallow and Johnson on June 21, 2010, suggests that he had asked Johnson to round up donations.

In one email, Swallow tells Johnson that "four of those checks bounced," to which Johnson replied, “I am really sorry about the checks. I will get it fixed ASAP! Let me know whos (sic) bounced. I was in a mad rush to get those so maybe I pushed a few people too hard."

The four checks totaling $9,600 were written by associates of Johnson.

Swallow forwarded the email exchange to a member of Lee's campaign staff. Johnson himself gave $2,400 to Lee’s primary campaign — the federal limit — on June 21, 2010.

The House report paints a damning picture of Swallow's own campaign activities leading up to his election as attorney general in 2012, saying he "hung a veritable 'for sale' sign" on his office door. The 200-page report included allegations of hiding campaign funds, doing favors for wealthy supporters and friends and destroying evidence.

The report also goes into detail about his relationship with Johnson, the one-time multimillionaire founder of the online marketing company iWorks.

Johnson claims Swallow helped arrange a $250,000 payment to a friend who had ties to Reid to derail a Federal Trade Commission investigation into iWorks. Reid has disavowed any knowledge of Johnson's case.

The FTC filed a civil complaint against Johnson in December 2010, which remains unsettled. Johnson also faces fraud charges in an 86-count federal indictment connected to iWorks.

Rawlings said the county investigation, in conjunction with the FBI and the Utah Department of Public Safety, is sweeping up a broad swath of evidence, but it is focused on Swallow and Shurtleff.

"I think it would be unfair to say we are currently investigating Sens. Reid and Lee at this time. But we are not going to ignore the scraps of evidence coming in about them. Do we plan on formally turning attention to all of the scraps picked up about them? We do plan on that,” Rawlings said.

Gill said state investigators have passed on information to their counterparts at the FBI because they can't investigate on a federal level.

The U.S. Attorney's Office for Utah opened an investigation into Swallow and Shurtleff in early 2013 but turned it over the DOJ Public Integrity Section, which last September declined to file criminal charges against them.

The county prosecutors have expressed frustration that the DOJ investigation ended prematurely.

Gill said the House report is part of a larger "mosaic" and complements the investigation.

State investigators say they've conducted hundreds of interviews, combed through nearly 100,000 pages of documents and electronic files and issued search warrants and subpoenas. They're also looking at a state elections office report that says Swallow violated financial disclosure laws.

"We have a lot of information to digest and we're working aggressively to reach certain conclusions, but we're not there yet," he said.

Email: romboy@deseretnews.com, Twitter: dennisromboy; DNewsPolitics

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