SALT LAKE CITY — Gov. Gary Herbert has "grave concern" over how a former Utah Transit Authority board member profited from his involvement in a land deal near a controversial commuter rail stop.

Speaking at his monthly KUED news conference Thursday, the governor also said he's "absolutely" pleased that the attorney general's office is looking into the matter.

"There ought not to be the appearance of anything that would be a conflict of interest," Herbert said.

Legislative auditors determined that former UTA trustee and land developer Terry Diehl had a conflict of interest when he made money from the sale of development rights near a future FrontRunner station in Draper. The audit released last December did not include a dollar figure.

Through a government records request of the auditors' notes, the Deseret News and KSL learned and first reported last week that Diehl was paid "in the millions and less than $24 million."

"I'm concerned. I'm a taxpayer just like you are, and if in fact somebody is profiting inappropriately, that causes me grave concern," Herbert said.

The governor said he doesn't know whether the "suppositions and allegations" are true. But he welcomed the attorney general's decision to conduct an investigation.

"I think it's appropriate for AG to investigate. We need to bring some kind of understanding, guilt or innocence. Let's find out what it is," Herbert said.

According to the audit, Diehl in 2008 consulted for and later held ownership in a company that wanted to develop land next to the proposed FrontRunner stop at 12800 South. In November 2009, UTA selected that site for the station. A month later, Diehl sold the development rights for the property, the audit said, "for an undisclosed amount."

Although Diehl made UTA aware that he had a financial stake in the land and did not interfere with the site selection, auditors concluded that he may have violated the Public Transit District Act's misuse of official information provision, a class B misdemeanor.

Diehl resigned from the UTA board in May.

At a legislative Transportation Interim Committee meeting last week, several residents and a state lawmaker called for a federal probe into the transaction.

Herbert said he has in the past talked and reiterated with UTA board Chairman Greg Hughes about being open and transparent so the public knows what the transit agency is doing. Hughes, a Republican state legislator from Draper, said UTA has taken steps to do that.

E-mail:, Twitter: dennisromboy