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Ex-A.G. Shurtleff told FBI about Swallow allegations last year

"I think John had some poor judgment"

Published: Friday, Aug. 28 2015 9:54 p.m. MDT

Jeremy Johnson leaves federal court in Salt Lake City  Friday, Feb. 1, 2013. (Jeffrey D. Allred, Deseret News) Jeremy Johnson leaves federal court in Salt Lake City Friday, Feb. 1, 2013. (Jeffrey D. Allred, Deseret News)

SALT LAKE CITY — Former Utah Attorney General Mark Shurtleff told federal investigators last October about the bribery allegations a St. George businessman made earlier this year against new Attorney General John Swallow.

Jeremy Johnson called Shurtleff just before the November election urging him to convince Swallow to drop out of the race. "He wanted to report to me what he thought were improprieties on John's part," Shurtleff told the Deseret News on Monday.

Johnson let Shurtleff listen to portions of a secretly recorded meeting between Johnson and Swallow that occurred at a Krispy Kreme doughnut shop in Orem last April. During the conversation, the two discussed a financial arrangement through which Senate Majority Leader Harry Reid would receive a payoff to derail a Federal Trade Commission investigation into Johnson's once lucrative Internet marketing company.

After talking to Swallow about Johnson's claims, Shurtleff said he didn't see any evidence of a state crime, but perhaps there was potential of a federal crime "depending on whether you believe Johnson's story to the max."

Jeremy Johnson speaks to reporters after a change of plea hearing at the Frank E. Moss United States Courthouse in Salt Lake City on Friday, Jan. 11, 2013.  Johnson is accused of bilking online customers out of hundreds of millions of dollars through his online business Iworks by putting through unauthorized charges for unwanted products.  (Laura Seitz, Deseret News) Jeremy Johnson speaks to reporters after a change of plea hearing at the Frank E. Moss United States Courthouse in Salt Lake City on Friday, Jan. 11, 2013. Johnson is accused of bilking online customers out of hundreds of millions of dollars through his online business Iworks by putting through unauthorized charges for unwanted products. (Laura Seitz, Deseret News)

"At that point as a law enforcement official, I felt like I had a duty to notify federal authorities, even though it was obviously very difficult for me to do that. He's my chief deputy. He's my friend. I don't believe, knowing him as well as I do, that he ever formed criminal intent to bribe or break the law. But I'm not a federal official," Shurtleff said.

The former three-term Republican attorney general, who now works for the international law firm Troutman Sanders LLP, spoke about the accusations against Swallow for the first time in an interview Monday.

Shurtleff said he met with the FBI and the Department of Justice before and after the Nov. 6 election in which Swallow handily defeated Democratic Weber County Attorney Dee Smith.

"I don't know if that matters to people, but when it came to my knowledge I just didn't brush it off," said Shurtleff, who hired Swallow to be his chief deputy in 2009.

Jeremy Johnson leaves federal court in Salt Lake City  Friday, Feb. 1, 2013. (Jeffrey D. Allred, Deseret News) Jeremy Johnson leaves federal court in Salt Lake City Friday, Feb. 1, 2013. (Jeffrey D. Allred, Deseret News)

Shurtleff said he understands that the federal investigation is now focusing more on campaign promises Swallow might have made in exchange for donations.

"I'm hearing rumblings that more people are going to come say he promised to do this, take care of my issues or whatever," he said. "I was only at a few of his fundraising events, but I never heard him make any kind of tit for tat, quid pro quo. He's smarter than that."

Johnson claims Swallow helped arrange a deal to enlist Reid to quash a FTC investigation of his company, iWorks, in 2010. Swallow maintains that he only introduced Johnson to his friend and former employer, Richard Rawle, who had connections to federal lobbyists who could tell Johnson's side of the story.

Johnson and an associate paid Rawle $250,000, but the FTC shut down iWorks before any lobbying was done.

Shurtleff said he told Swallow to hire a lawyer and "take himself down there and clear it up as soon as possible." Swallow did get an attorney, but Shurtleff said Swallow did not speak with federal authorities on the advice of his attorney.

Utah Attorney General John Swallow speaks out Monday, Jan. 14, 2013, in his office at the state Capitol about allegations that he was involved in improper deals. (Scott G Winterton, Deseret News) Utah Attorney General John Swallow speaks out Monday, Jan. 14, 2013, in his office at the state Capitol about allegations that he was involved in improper deals. (Scott G Winterton, Deseret News)

Shurtleff also said he told the FBI to interview Rawle, who was dying of cancer.

"I don't know if they did or not. I kind of suspect they did not, but I don't know why," Shurtleff said. "But it might have helped. People are griping now that John got a deathbed affidavit."

Rawle died Dec. 8, three days after signing a declaration saying he was not aware of a plan to influence Reid. The senator has disavowed any knowledge of Johnson's case.

In the four-page document, Rawle said he kept $50,000 as his fee and paid Swallow $23,500 out of that money for consulting work he did on a Nevada cement plant project. Swallow returned that money and asked Rawle to pay him from a different account, which he did, according to the affidavit.

"The stuff John's admitted was upsetting to me, clearly. I didn't know," Shurtleff said. "After he told me he'd been consulting on the Nevada cement project, I was, 'What? What? Why?'"

Attorney General Mark Shurtleff is interviewed in his office at the Capitol in Salt Lake City, Tuesday, Dec. 18, 2012. (Ravell Call, Deseret News) Attorney General Mark Shurtleff is interviewed in his office at the Capitol in Salt Lake City, Tuesday, Dec. 18, 2012. (Ravell Call, Deseret News)

Shurtleff said Swallow didn't violate office policy but he said it wasn't a good idea.

"I think John had some poor judgment. But as I told the FBI and the U.S. attorney, he's too trusting, but there's no way he intended to bribe a senator or any other official," he said.

Swallow's judgement and ethics have come into question since Johnson's allegations became public Jan. 5. The U.S. Attorney's Office took the unusual step of acknowledging that it is investigating the accusations.

Campaign finance reports, secret recordings, court documents and interviews with associates and others showed Swallow's willingness to advise people whose dealings are in question, and put in focus the role money plays in gaining access to decision-makers.

Shurtleff came under fire during his 12 years in office for allegedly going easy on Internet marketers who contributed to his campaign fund.

Utah Attorney General John Swallow speaks out Monday, Jan. 14, 2013, in his office at the state Capitol about allegations that he was involved in improper deals. (Scott G Winterton, Deseret News) Utah Attorney General John Swallow speaks out Monday, Jan. 14, 2013, in his office at the state Capitol about allegations that he was involved in improper deals. (Scott G Winterton, Deseret News)

"There's no factual basis for it," he said, attributing the notion to "misreported" news stories.

Johnson was one of Shurtleff's biggest backers, donating more than $200,000 to his campaign and attorney general's office initiatives. Shurtleff said he never accepted money in exchange for dropping an investigation into iWorks. The Utah Division of Consumer Protection issued the company administrative fines several years ago.

But that general perception has persisted as Shurtleff's hand-picked successor, Swallow, has become the state's top law enforcement official. Shurtleff called that "hurtful, maddening and outrageous."

Shurtleff said he told Swallow to stand firm if he believes in his heart of hearts that he did nothing wrong, illegal or unethical.

"If your conscience is OK and you remain committed to serving the public honestly and ethically, then you just gotta withstand all the garbage that's been thrown at you on stage, all the rotten tomatoes, and hang in there," Shurtleff said.

Attorney General Mark Shurtleff is interviewed in his office at the Capitol in Salt Lake City, Tuesday, Dec. 18, 2012. (Ravell Call, Deseret News) Attorney General Mark Shurtleff is interviewed in his office at the Capitol in Salt Lake City, Tuesday, Dec. 18, 2012. (Ravell Call, Deseret News)

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