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Angry prosecutor calls on feds to take over Shurtleff, Swallow cases

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SALT LAKE CITY — Davis County Attorney Troy Rawlings called on the U.S. Attorney's Office to "re-engage" and take over the criminal case against former Utah Attorney General Mark Shurtleff and others.

Rawlings wrote in an email early Wednesday that federal prosecutors have apparently decided they are "no longer conflicted out" after the Federal Election Commission filed a civil complaint against indicted St. George businessman Jeremy Johnson last week.

The FEC alleges Johnson made illegal campaign contributions to Shurtleff, Sen. Mike Lee, R-Utah, and Sen. Harry Reid, D-Nevada. Johnson provided that information to state prosecutors, along with the Utah Department of Public Safety and the FBI, during an interview in which he was granted immunity from prosecution.

Rawlings is angry that the federal government is now using that information against Johnson and not honoring the promise of immunity, even though the FBI is working with him in the criminal cases against Shurtleff and former Attorney General John Swallow.

Then-U.S. Attorney for Utah David Barlow removed his office from investigations into Swallow and Shurtleff in May 2013 without explanation. He turned the case over to the Department of Justice Public Integrity Section, which five months later declined to file criminal charges against the two Republicans.

The FBI, however, continued to work with state investigators, leading to Rawlings and Salt Lake County District Attorney Sim Gill filing criminal charges against Swallow and Shurtleff last summer. Rawlings is prosecuting Shurtleff, while Gill is prosecuting Swallow.

Shurtleff and Swallow have denied any wrongdoing.

"If the local U.S. Attorney’s Office truly had a conflict in 2013, as we all thought by their recusal pronouncement and actions, the prosecutorial immunity granting function and determinations would belong to Sim Gill and I, the appointed state prosecutors," Rawlings wrote.

"If the local U.S. Attorney’s Office is now 'conflict free' and can exercise prosecutorial discretion by dishonoring our immunity agreement, they are 'conflict free' and can take back the case. I invite them to do so."

Rawlings called on the U.S. Attorney's Office to "re-engage" in the Shurtleff and Swallow cases.

"With the FBI's continuing assistance, I ask the U.S. Attorney’s Office-Utah to search for the light, play the cards dealt, follow the evidence provided by Jeremy Johnson and others to whatever island it goes," he wrote.

In response to Rawlings' assertion, U.S. Attorney's Office spokeswoman Melodie Rydalch issued a brief statement.

"We have always abided by our strict ethical code of conduct and will continue to do so," she said. "Beyond that, we will have no comment."

That comment prompted Johnson's attorney, Ron Yengich, to file a motion Wednesday to lift a gag order in the criminal case against his client.

Yengich argued that Rydalch's statement put the government in a "public posture of presumed superior ethics," which he calls inaccurate.

Johnson and his lawyers have not responded to numerous media reports that cast him in an "extremely negative light," giving the government an unfair advantage in the court of public opinion and possibly tainting potential jurors, Yengich wrote. He wants a judge to allow Johnson and his defense team to respond to public statements made about Johnson.

Last week, the FEC accused Johnson of violating campaign finance laws in donations made to Shurtleff, Swallow and Reid totaling $170,000. Federal authorities say Johnson used "straw" donors to give about $100,000 to Shurtleff, $50,000 to Lee and $20,000 to Reid. The legal limit for individual donations to federal campaigns is $2,400.

Swallow and Johnson discussed how contributing to Lee’s campaign would help protect and advance Johnson’s business interests, according to the complaint.

In particular, Swallow told Johnson that if he donated to Lee, and if Lee won election to the Senate, Lee could then play a key role in the appointment of a U.S. attorney in Utah who could protect Johnson’s business interests from prosecution by other U.S. attorneys.

Johnson's interests at the time include companies that made tens of millions of dollars processing financial transactions for online poker games, the FEC complaint says.

According to the complaint, Johnson knew federal prosecutors in New York were filing lawsuits to seize the assets of online poker companies, including those like Johnson’s that process online poker earnings.

Barlow, who worked a Lee's chief counsel on the Senate Judiciary Committee, became Utah's U.S. attorney in fall 2011. He resigned last summer. The U.S. Senate confirmed John Huber to replace him this month.

Under Barlow, federal prosecutors filed an 86-count fraud indictment against Johnson in March 2013 in connection with his once-lucrative Internet marketing enterprise, iWorks. Johnson and four associates are scheduled to go on trial in September.

Email: romboy@deseretnews.com

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