After a meticulous review, it became apparent there were some legal questions regarding estate planning and trusts which fall outside the realm of election law. —Mark Thomas, chief deputy for the Utah Lieutenant Governor's Office
SALT LAKE CITY — At least one of the several investigations involving embattled Utah Attorney General John Swallow is moving forward.
The lieutenant governor's office said Friday it will appoint special counsel to investigate three of 12 alleged elections violations against Swallow. It dismissed the other nine counts.
Two of those counts allege Swallow failed to disclose that he was an owner or manager of a consulting firm called P Solutions and a family trust named SSV Management, and that he received more than $5,000 from P Solutions and another firm called RMR Consulting. The third alleges he made false and misleading statements about his financial condition on campaign disclosure forms.
“After a meticulous review, it became apparent there were some legal questions regarding estate planning and trusts, which fall outside the realm of election law,” said Mark Thomas, the lieutenant governor's chief deputy and state elections office director. “Special counsel will provide additional review of the outstanding legal questions and help to determine if violations occurred.”
The Alliance for a Better Utah filed an 18-page petition in March accusing Swallow of filing misleading or false campaign declaration and disclosure forms regarding his personal business interests; conducting campaign activities from his state office during and after business hours; and putting campaign funds to personal use.
"We have election laws for a reason," said Maryann Martindale, Better Utah executive director. "I think they are taking it seriously."
Swallow campaign adviser Jason Powers said it's good news that nine of the allegations were dismissed.
"We remain patient while the elections office seeks additional legal advice and are optimistic that the remaining allegations will be dismissed," he said.
Swallow filed a response to the petition through his attorneys in April, saying the claims were without merit and politically motivated. Lawyers Rodney Snow and Jennifer James argued that his disclosure forms were filed in good faith and were true and accurate to the best of his understanding.
The lieutenant governor's office will now put out a request for proposals from law firms interested in acting as special counsel.
Martindale said the state needs to ensure the firm not only has expertise in tricky election law, but doesn't have a relationship with the offices of attorney general and lieutenant governor.
"It needs to be someone who is far removed from that," she said.
Swallow faces the possibility of being removed from office if he is found to be in violation of state elections law. His attorneys, however, dispute that, arguing the Utah Constitution provides only for removal through impeachment conducted by the Utah Legislature.
"It's kind of an open question out there as to what will happen in the end," Thomas said.
The elections petition claims Swallow failed to disclose his interest in several business entities and income from three, including RMR Consulting.
The late Richard M. Rawle set up RMR Consulting after Swallow introduced him to St. George businessman Jeremy Johnson as someone who could help lobby the Federal Trade Commission on Johnson's behalf. The FTC was investigating Johnson's Internet marketing company in 2010.
Johnson claims Swallow helped arrange a deal to pay off a U.S. senator to thwart the investigation. Johnson and an associate paid Rawle $250,000.
In an affidavit before he died, Rawle said he paid lobbyists with a portion of the money and took $50,000 for his fee, part of which he used to pay "miscellaneous" expenses. One of those bills was from P Solutions for consulting work that Swallow did on a cement project Rawle had in Nevada.
P Solutions later returned the check, which came from the RMR account, and asked that it come from another account. Rawle then paid P Solutions $23,500 from another account, according to the affidavit.
Swallow's estate planning attorney, Lee McCullough III, formed P Solutions as a subsidiary of a blind family trust and limited liability company, SSV Management, he had set up for Swallow's family, according to Swallow's response to the elections complaint.
"At no time did Mr. Swallow receive any income, distributions or payment for services from P Solutions, nor was Mr. Swallow compensated directly by Mr. Rawle for consulting work," according to the response. All disbursements from P Solutions were made to Swallow's wife, Suzanne.
According to the response, Swallow never had any ownership interest in P Solutions, but had served as a manager. McCullough advised him that if he resigned as an unpaid manager before the campaign filing deadline, he would not have to disclose P Solutions on his forms, which is what Swallow did.