Report of the Special Investigative Committee
Total Page：16
File Type：pdf, Size：1020Kb
Utah House of Representatives Report of the Special Investigative Committee March 11, 2014 Special Investigative Committee Utah House of Representatives COMMITTEE C HAIR : JAMES A. D UNNIGAN COMMITTEE MEMBERS : REBECCA C HAVEZ -H OUCK BRAD L. D EE SUSAN D UCKWORTH FRANCIS D. G IBSON LYNN N. H EMINGWAY MICHAEL K. MCKELL LEE B. P ERRY JENNIFER M. S EELIG COMMITTEE S TAFF : STEVEN R EICH , S TEVEN R OSS , J IM M INTZ , JOHN F ELLOWS , E RIC W EEKS , J ERRY H OWE Acknowledgement A complex and politically sensitive investigation such as this one can only be accomplished through the hard work, assistance, and cooperation of many persons and groups. The Committee acknowledges and thanks all of those who assisted us in our work, but singles out, with thanks and gratitude, those listed in this Acknowledgement. The Committee received legal assistance from the New York-based law firm of Akin Gump Strauss Hauer & Feld. Steven Reich and Steven Ross served as lead counsel. Their experience, judgment, mental acuity, objectivity, and fierce commitment to pursuing the facts were key in whatever success the Committee achieved. Members of their team, particularly Chris Egleson, Megan Greer, Samidh Guha, Patrick Mott, James Tysse, and Melissa Gyure were consummate professionals who performed the difficult tasks that drove the investigation. The Mintz Group, our lead private investigators, worked tirelessly to gather the facts and information necessary to fulfill the Com mittee’s mandate. Jim Mintz, the firm’s president, contributed his experience and wisdom to the development of the Committee’s investigative strategy. He also conducted interviews with important witnesses himself. Mintz Group investigators Patrick Kelkar, Andy Melnick, Jill Haberkern, John Mintz , Tom O’Rourke, Esther Rhee, Craig Kelbus, Doug Chisholm and Curtis Rose provided the “boots on the ground” that did the day-to-day work of the investigation. Lindquist and Associates, led by Pamela Lindquist and Richard Caspar, were the Committee’s Utah-based private investigators. They proved tenacious and committed in their pursuit of information for the Committee. The Committee’s in -house staff provided coordination and day-to-day assistance to committee members, outside legal counsel, and the C ommittee’s investigators. The Office of Legislative Research and General Counsel, particularly Legislative General Counsel John Fellows, Deputy General Counsel Eric Weeks, Managing Policy Analyst Jerry Howe, and Sara Thomas provided direct staff support to the Committee. Director Michael Christensen, Phalin Flowers, Doug Farr, and Trent Packer also provided general support and IT assistance. Legislative Fiscal Analyst Jonathan Ball and his Deputy, Steven Allred, provided fiscal support and assistance. House Chief Deputy Joe Pyrah was invaluable in assisting the Committee with strategic and tactical decisions and media communications. Speaker Rebecca Lockhart and the House Leadership team of Brad Dee, Greg Hughes, Don Ipson, Mel Brown, Brad Wilson, and Dean Sanpei provided the unfailing political support necessa ry for the Committee’s work . Lieutenant Governors Greg Bell and Spencer Cox cooperated with and assisted the Committee. Mark Thomas, their chief of staff, played an important liaison role. The Lieutenant Governor’s outside counsel, the law firm of Snell and Wilmer, worked collaboratively with the Committee, particularly Matthew L. Lalli and Stewart O. Peay. Members of the Office of the Attorney General were placed in an extraordinarily difficult position in attempting to cooperate with the Committee as it sought information from the Office. Brian Tarbet, David Sonnenreich, and Bridget Romano walked that tightrope with consummate professionalism -- their assistance is acknowledged and appreciated. Utah’s media brought the original allegations to light and assisted the Committee in crafting policy that both protected the integrity of the investigation and provided public transparency. Other persons and entities provided the Committee with extraordinary cooperation and assistance. You know who you are -- you have the Committee’s sincere thanks for all that you did to assist with the investigation. The spouses, friends, and families of committee members and staff provided practical and emotional support throughout this project. Finally, the citizens of Utah, whose concern about and commitment to a functional, ethical governmen t provided the essential support for, and ultimate reason for, the Committee’s work. Salt Lake City, Utah Jim Dunnigan March 11, 2014 Rebecca Chavez-Houck Brad Dee Susan Duckworth Francis Gibson Lynn Hemingway Mike McKell Lee Perry Jennifer Seelig TABLE OF CONTENTS EXECUTIVE SUMMARY ..............................................................................................................1 I. Overview of the Committee’s Investigation and Findings ..................................................2 II. The Attorney General’s Office For Sale ..............................................................................4 A. Mr. Swallow Provided Extraordinary Access to the Office to His Friend and Political Ally Jeremy Johnson and Provided Johnson with a Beneficial Opinion Regarding Utah Law ..................................................................................5 B. Mr. Swallow Made a Secret Promise to Support the Payday Lending Industry in Exchange for Campaign Support, and then Hid the Industry’s Support From Utah’s Voters .....................................................................................6 C. Mr. Swallow Undermined the State’s Efforts to Protect Utahns From Improper Mortgage Foreclosures Through Efforts to Benefit a Campaign Contributor (and Hide What He Was Doing) .........................................................10 III. Mr. Swallow’s Fabrication and Elimination of Evidence ..................................................12 PART I – THE COMMITTEE’S INVESTIGATION ....................................................................17 I. The Committee’s Investigation ..........................................................................................18 A. Overview of this Report .........................................................................................18 B. The Special Committee’s Formation and Mandate ................................................19 C. The Special Committee’s Powers, Policies and Procedures ..................................24 D. The Committee’s Investigative Process .................................................................26 E. Investigative Challenges Faced by the Committee ................................................30 1. The Attorney General’s False or Misleading Statements, Improper Invocations of Privilege, Withholding of Documents, and Refusal to Testify ....................................................................................................30 2. Litigation Challenging the Special Committee’s Document Subpoenas ..................................................................................................32 F. The Committee’s Sources of Evidence ..................................................................34 PART II – THE INFORMATION AND EVIDENCE GATHERED BY THE COMMITTEE ....................................................................................................................37 I. Mr. Swallow Compromised the Principles and Integrity of the Office of the Attorney General In Order to Benefit Himself, His Friends and His Political Supporters ..........................................................................................................................38 A. Utah’s Laws to Combat Government Corruption ..................................................39 B. Mr. Swallow Provided Extraordinary Access to the Office to His Friend and Political Ally Jeremy Johnson and Provided Johnson with a Beneficial Opinion Regarding Utah Law ................................................................................43 1. How Mr. Swallow’s Relationship with Mr. Johnson Developed ...............45 2. Mr. Johnson’s Interest in Processing Online Poker Payments ...................47 3. Mr. Swallow Joins the Office and Further Develops His Relationship With Mr. Johnson ..................................................................49 4. Trouble Looms for SunFirst’s Poker Processing Operation and Mr. Johnson Requests a Legal Opinion ............................................................51 5. Mr. Swallow Provides a Written Nod Toward the Legality of Poker Payment Processing in Utah While, at the Same Time, Accepting Personal and Political Favors from Mr. Johnson .......................................54 C. Mr. Swallow Made a Secret Promise to Support the Payday Lending Industry in Exchange for Campaign Support, and then Hid the Industry’s Support From Utah’s Voters ...................................................................................60 1. Mr. Rawle’s Support of the Swallow Campaign ........................................62 2. The Beginnings of Mr. Swallow’s Campaign and the Plan to Court the Payday Industry....................................................................................67 3. Building the Campaign Web: How Mr. Swallow Shielded Payday Support from Public View .........................................................................76 4. How the PRGEA Funds Were Used to Protect Mr. Swallow and the Payday Industry .........................................................................................89 5.