After months of rumors and rumblings, The Salt Lake Tribune finally got the scoop on Attorney General John Swallow's alleged involvement in attempting to help ward off a federal investigation of St. George business owner Jeremy Johnson.
Johnson and his inner circle became very wealthy operating an online get-rich-quick company called IWorks, a company CW has reported about in a number of stories. After the Federal Trade Commission came calling in December 2010, Johnson stood accused of getting consumers to enroll in grant-writing or business-coaching programs for a nominal fee, then charging their credit cards hundreds of dollars in unauthorized monthly premiums. The fraud scheme is alleged to have raked in hundreds of millions of dollars. Just to reconstruct the routing of funds through dozens of shell companies required a 79-page explanation.
If you like to see the pretty colors when your head explodes, you can read the report here.
Prior to the FTC's 2010 civil lawsuit and prior to Johnson being criminally charged with mail fraud in the summer of 2011, Johnson said he knew about the FTC investigation and reached out to Utah's political power players for help. One of those players, according to the Trib article, was John Swallow, who had been recently hired by his predecessor, Attorney General Mark Shurtleff.
It's been well reported that Shurtleff liked "pal"ing around with Johnson, even going so far as to pose on the tarmac with Johnson's "toys" (a Lamborghini and private jet). As Johnson and his partners had donated to Shurtleff's campaign to the tune of $200,000, it's not surprising that Shurtleff was sympathethic to Johnson's plight. It also wouldn't be surprising that Shurtleff's top lieutenant, John Swallow, would use his past connections in the payday-loan industry to provide Johnson with access to those who might help him. Unfortunately, in Johnson's case, the FTC showed up before Johnson could bend the ear of people in high places (really, Harry Reid?).
And while it is important to note that Swallow hasn't been criminally charged, it is also worth pointing out that this is just one of two ethical political quagmires he's found himself in lately. City Weekly's Eric Peterson reported on an earlier one in the summer of 2012 in his story Campaign Confidential, noting that Swallow held a private meeting with a call-center owner who was in trouble with the state's consumer-protection agency. In a tape-recorded conversation, Swallow reassured the businessman that if he were elected AG, he would move the consumer-protection agency under the auspices of the AG's office so he might have more oversight on these investigations.
Peterson's story broke before the GOP primary, at a time when all good Republicans could have decided not to continue the "business-as-usual" perception of the AG's office. And beyond Republicans, the voters at large could have similarly ushered in a breath of fresh air at the general election. The Democrats had a decent AG candidate in Dee Smith, but neither he nor the party seemed the least bit motivated to get Smith elected.
So, here we are with Utah's new attorney general practically in a fetal position during his first week in office, insisting he's done nothing wrong. It's unknown if he will face criminal charges, but there is the simple matter that one of the AG's established duties is to "prosecute corporations which act illegally" (No. 13 on the Duties of the Utah Attorney General's Office here). According to the Trib story, Swallow himself has retained an attorney.
Politics in Utah never cease to amaze.