SALT LAKE CITY — Marc Jenson sat at a posh Newport Beach resort sipping water with then-Utah Attorney General Mark Shurtleff and future Attorney General John Swallow in the spring of 2009.
Jenson poured his from a pitcher the staff had brought the men while they lounged in the well-appointed Pelican Hill clubhouse. But Shurtleff and Swallow didn't want that water. They drank $8 bottled water — on Jenson's dime.
Though a small thing, Jenson, whom the attorney general's office had prosecuted for selling unregistered securities a year earlier, said it bugged him. Worse, he said, it was indicative of how Shurtleff and Swallow treated him on two visits to the luxury resort for which he says he played the reluctant host and paid their expenses.
"It is symbolic," Jenson said in an interview at the Utah State Prison. "They felt like they owned me."
How Shurtleff and Swallow came to spend time with Jenson in Southern California in the spring of 2009 is part of a long and winding story that goes back nearly a decade.
Now, Swallow sits in the seat Shurtleff occupied for 12 years, under fire as Utah's top cop, while Shurtleff a little more than a week ago quit his job at the international law firm where he had worked since leaving office in January. And both men are subjects of wide-ranging federal and local investigations, tied in part to their relationship with Jenson and his account of their visits to the Pelican Hill resort.
The controversy surrounding Shurtleff and Swallow centers on money, with allegations of influence peddling serving as a backdrop to the investigations now underway — impropriety that both Shurtleff and Swallow have each denied.
In 2004 and 2005, Amy White, wife of Utah businessman Ricke White, gave Shurtleff $6,500 in campaign donations, including $1,500 that was given when Shurtleff wasn't running for re-election. Ricke White was among the investors in Jenson's "hard-money lending" operation in which he told the investors their money would be used for short-term, high-interest loans to entrepreneurs in need of cash while they worked out long-term financing. Upon repayment of the short-term loans, the investors would make money.
But the investors said they were not repaid and that Jenson tried to get them to settle for much less than they invested or threatened to give them nothing at all. They also said he never told them before they invested that he had been in federal prison in 1992 for bank fraud.
White and other investors took their concerns to Shurtleff seeking help, claiming millions of dollars in losses. The attorney general's office investigated Jenson and he was charged in 2005 with selling unregistered securities, securities fraud and pattern of unlawful activity.
Allegations of questionable campaign donations, attempted bribery of prosecutors, political pressure and threats swirled around Jenson's criminal case from the outset, according to a May 2008 Deseret News story.
Shurtleff was at the center of the storm.
Shurtleff said at the time that meeting with people who want his office to take legal action is common. In the Jenson case, he said he listened to the allegations and then had the businessmen talk to prosecutors on his staff and that they decided to file charges.
Jenson's defense attorneys raised the possibility that Shurtleff filed the charges as a favor to a campaign donor who also was a victim in the case. Conversely, victims wondered if Shurtleff gave into political pressure to allow Jenson a plea deal that one of the attorney general's own prosecutors said "does not serve all the interests of justice" and that a judge rejected.
Shurtleff denied any wrongdoing. But he acknowledged "extraordinary pressure" coming from both sides — including being offered a bribe, according to the Deseret News story. He said he reported that to the FBI.
Shurtleff told the Deseret News at the time that Jenson supporters contended the charges were political. Shurtleff described the pressure as "like nothing I have seen in a criminal prosecution, to get the charges dismissed," including calls from LDS mission presidents and Jenson family members.
"They've hired people who are lobbyists who I've worked with or who I've known and am friends with, people who have raised money for me in the past, to try to get me to drop the charges," Shurtleff said in 2008.
Shurtleff said he received a fake newspaper headline — apparently as a threat of what he might someday read in a newspaper — saying, "Shurtleff prosecutes innocent man on behalf of campaign contributor."
In Jenson's mind, that is the headline today.
"I was operating under the delusion that they had just made a mistake. It was no mistake. I was targeted from the beginning," Jenson said, speaking from Utah State Prison in Draper, where he is incarcerated.
Jenson said he and his attorneys tried but could never get his side of the story to Shurtleff.
Jenson eventually reached a plea-in-abeyance agreement that included a $15,000 fine but no jail time for selling unregulated securities. A 3rd District Court judge, however, rejected the deal as too lenient. The judge accepted a second plea agreement that also allowed Jenson to pay the fine and avoid jail but imposed restitution totaling $4.1 million — $2.5 million to Morris Ebeling and $1.6 million to Bodell Construction owner Michael Bodell.
"With a plea deal, at least we've got (Jenson) on a short, very tight leash," Shurtleff said in the 2008 Deseret News story.
Jensen was out of jail but in need of money to make restitution.
Trip to California
After all the turbulence in the Jenson case, Shurtleff and Swallow curiously flew down to Newport Beach in May and June 2009 — with Jenson covering the expenses.
Why would the sitting attorney general and Swallow, whose own ambitions would put him in the attorney general's office as a deputy, and later as the attorney general, agree to take such a trip?
Shurtleff has not offered an explanation and Friday refused to discuss the trip. But Jenson says money was at the heart of it.
The trip was apparently arranged through a mutual associate who told Jenson it would be good for him to get to know Shurtleff and Swallow, Jenson said.
Among Jenson's claims is that Shurtleff demanded he give businessman Darl McBride $2 million to get McBride to take down a website attacking another prominent businessman, Mark Robbins, with whom McBride had an ongoing battle over a business deal gone bad.
The Salt Lake Tribune reported last month about a secret recording in which Shurtleff is heard offering to get McBride $2 million from Jenson if he dropped his battle with Robbins. McBride recorded the conversation and turned it over to federal agents. The U.S. Department of Justice is investigating the activities, as is the Salt Lake County district attorney and the Davis County attorney.
Jenson said Shurtleff and Swallow, who was in private practice at the time but was Shurtleff's chief fundraiser, wanted him to introduce them to his wealthy friends whom they saw as potential campaign contributors. Shurtleff was running for U.S. Senate at the time.
Jenson also claims Shurtleff told him "more times than I could count" that had he donated to his election campaign, the attorney general would have known him and that he wouldn't be in the position he was in at the time. Jenson said he was working on paying the court-ordered restitution when Shurtleff and Swallow showed up at Pelican Hill resort.
"It will work out for you in the end," Jenson says they told him.
"I don't need protection, he said he replied. "I need $4 million so I don't go to prison in three years."
Shurtleff has called Jenson a liar and denied having those conversations.
Swallow, in one of the few interviews he has done since the allegations surfaced against him the past six months, said in May that he couldn't talk about Jenson due to a pending criminal case. Swallow issued a statement last month saying his interactions with Jenson occurred when he was a private attorney. He said he never promised to help Jenson if he breached his plea arrangement and he was never retained as his lawyer, according to the statement.
Jenson to prison
Jenson said Swallow wanted access to his rich friends. "I'm the next attorney general. You've got to save some for me. I need some, too," he said Swallow told him at the time.
Shurtleff made Swallow his chief deputy in 2009. When Shurtleff didn't seek a fourth term in 2012, Swallow ran and won the attorney general election.
When Jenson failed to pay the millions of dollars in restitution, a judge in November 2011 sentenced him to 10 years in prison. He has served about 22 months so far, and must still pay the restitution.
Jenson said he doesn't owe the investors anything and that he's the one who lost money. Signed agreements provided by his attorney show Ebeling releasing Jenson from any claims and Bodell accepting a $3 million settlement. Those documents were submitted to the Utah Board of Pardons and Parole.
New charges followed Jenson.
The attorney general's office in August 2011 charged Jenson with communication fraud, money laundering and pattern of unlawful activity in connection with a failed $3.5 billion luxury ski/golf resort project on Mount Holly in Beaver County.
The fallout30 comments on this story
Jenson, a California native who attended high school and college in Utah, said he spent those weekends at Pelican Hill trying to "fend off" Shurtleff and Swallow, while trying to figure out how to pay the $4 million restitution and "get that Utah chapter in my life behind me."
Meantime, he says they were living it up on his tab.
Receipts provided by Jenson's attorney show Shurtleff and Swallow enjoyed meals, massages, golf and items from the pro shop, including a $98 argyle sweater that Swallow bought.
"It's like I said to these guys, 'Come on down and do whatever you want,' " Jenson said.
When Jenson saw the argyle sweater, he said he told Swallow he had plenty of sweaters and he could have just asked to borrow one, rather than buy one.
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