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Thursday, Oct. 23, 2014

Group seeks probe into possible illegal campaign donations to Sen. Mike Lee

By Lisa Riley Roche and Dennis Romboy, Deseret News

Published: Thu, June 5 4:31 p.m. MDT

 Senator Mike Lee speaks at a rally in South Jordan on Saturday, Nov. 2, 2013.

Senator Mike Lee speaks at a rally in South Jordan on Saturday, Nov. 2, 2013.

(Laura Seitz, Deseret News Archives)

SALT LAKE CITY — St. George businessman Jeremy Johnson told investigators he made $150,000 in campaign contributions to Sen. Mike Lee and former Attorney General Mark Shurtleff in other people's names — a violation of federal election law.

The Alliance for a Better Utah said Thursday a complaint to the Federal Election Commission is being prepared to investigate "illegal election activity" in Sen. Lee's campaign, alliance spokesman Isaac Holyoak said.

"If Utah's freshman senator did indeed allow, whether by ignorance, negligence or complete disregard of the law, a sizable amount of money to be illegally funnelled into his campaign, then Sen. Lee should be held accountable," Holyoak said.

He said the complaint will also refer to questions raised about whether the short sale of Lee's Alpine home in 2012 should have been recorded as a campaign contribution.

Lee's communications director, Brian Phillips, said in a statement that "at no time during or since the 2010 campaign was Sen. Lee or anyone associated with the Lee campaign aware of any unlawful contributions to the Lee campaign."

Phillips said "the documents obtained by investigators confirm that the scheme was known only to the two individuals who may have been involved.”

As for the complaint being filed, Phillips said, "we have not received anything from this group or the FEC and will respond appropriately if we do."

The contribution to the GOP senator appeared deep in a newly released affidavit for a search warrant in the ongoing criminal investigation of Shurtleff and his successor John Swallow, who resigned last December.

The Feb. 12 warrant made public Wednesday is another in series of warrants Salt Lake County District Attorney Sim Gill and Davis County Attorney Troy Rawlings, along with the FBI and Utah Department of Public Safety, have obtained since starting the probe about 18 months ago.

Johnson says Swallow told him that when Shurtleff ran for U.S. Senate in 2009, he needed $100,000 for the campaign. Johnson offered to write a check for that amount, but Swallow, who worked as Shurtleff's chief fundraiser at the time, told him he couldn't do that because the limit was $2,500 per person.

Johnson says Swallow told him he could give the money to other people who then could donate it to the campaign. Johnson told investigators he "did donate money to Mark Shurtleff's campaign in behalf of other individuals," according to the affidavit.

Johnson also says Swallow told him he could do the same thing for Lee's 2010 Senate campaign, and he did so in the amount of $50,000.

Swallow cashed the checks so quickly that some of them bounced because the money Johnson gave to other people had not yet been deposited, according to the affidavit.

Shurtleff said in a text message he had "no knowledge" of Swallow suggesting Johnson make contributions through other people.

"I would not solicit nor accept straw donations," he said.

Swallow's attorney, Rod Snow, said Johnson "was thought of and believed to be a successful southern Utah businessman. John always believed that individuals who were making contributions were using their own funds — not Johnson’s or the funds of anyone else. And, to our knowledge, Johnson never contributed to the Swallow campaign."

Matthew Sanderson, a political law attorney with the Washington, D.C., firm of Caplin & Drysdale, said the Federal Election Commission can be tough on those involved with arranging so-called "straw" donations to a campaign.

"There's a strict prohibition on that. As campaign finance rules go, this is one of the things that can still get you in trouble," Sanderson said, noting violators can face both civil and criminal penalties, including prison time.

The Federal Election Commission usually does not go after candidates, he said.

"It would be exceedingly rare," Sanderson said.

In this case, there would have to be a situation where Lee "was in the mode of what Swallow allegedly did, which was arrange for donations."

It's more likely the commission will focus on Johnson and Swallow, given the roles they allegedly played in getting the contributions.

"I don't know that they'll do that. Generally, they're the people who have the most exposure," Sanderson said.

Lee would have to return any money determined to have been donated illegally, Sanderson said. But it can take two to three years for the commission to even decide to investigate, he said, and then six months to a year to come to a conclusion.

Lee told the Deseret Management Corp. editorial board in March that Swallow was one of many campaign volunteers.

"I do know John Swallow," Lee said then. "He approached me shortly after I announced my candidacy for the U.S. Senate in 2010. Like many other people who made similar offers, he volunteered his help and his support and encouraged others to do the same."

Email: romboy@deseretnews.com, Twitter: dennisromboy

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1. Monk
Pleasant Grove, UT,
June 5, 2014

Another article from today said Lee saw the Pope. Maybe he can ask him for repentance.

2. sg
newhall, CA,
June 5, 2014

I suppose the illegal contributions made to Obama's first election and second election don't count? No one seems to have cared enough to make a big stink about all the irregularities in his campaign not to mention the voter fraud that occurred when illegals and others voted multiple times. How about those districts in the battleground states that reported over 100% cast votes all for Obama and not one for Romney? Luck or corruption. And why is this businessman now coming forward with his claims? What's in it for him and why didn't he refuse to comply? Sorry, but this businessman is just as guilty and should be held accountable for his actions. Aren't we all just plain tired with the status quo of state and federal politics and campaigning? The best way to avoid this is by setting a ceiling amount that any candidate can spend from local politics to federal. It's about time we stop the wasteful spending we do on campaigns. $1 billion dollars was spent on the last presidential election and what did it get us? Nothing. It is time to get rid of all special interest groups, lobbyists.

3. Happy Valley Heretic
Orem, UT,
June 5, 2014

The good ol' boys club is falling apart....good riddance.

4. SharpHooks
Sandy, UT,
June 5, 2014

What a tangled web woven by Shurtleff/Swallow/Lee.
There is too much information about their misdeeds for ALL of it to be incorrect.
Utah needs--DESPERATELY---a functional 2-party system.

5. Brave Sir Robin
San Diego, CA,
June 5, 2014

@sg

So because Obama did it makes it OK for Lee to do it? I love the morality on display here.