Has DoJ blocked a corruption probe into Reid, Lee?

posted at 8:41 am on March 14, 2014 by Ed Morrissey

Late yesterday, ABC News and the Washington Times both reported that Utah prosecutors have been working with the FBI on allegations of corruption involving two US Senators — who at first blush could not be more opposite. Majority Leader Harry Reid and Senator Mike Lee have almost nothing in common politically, but may be connected to corruption tracked in Utah involving the online-gambling industry. ABC’s Brian Ross spoke to the two Utah prosecutors — one Republican, one Democrat — who want the Department of Justice to open a broader investigation of Reid and Lee:


ABC Entertainment News | ABC Business News

Two local prosecutors in Utah say a corruption investigation looking at state politicians and online gambling interests has yielded evidence that could implicate Senate Majority Leader Harry Reid, D-Nevada, and Senator Mike Lee, R-Utah.

The two district attorneys – one Democrat and one Republican – already working with a team of FBI agents, are urging federal prosecutors to pick up the case and investigate – something the Department of Justice has thus far declined to do.

The Utah officials say the evidence relates to suspect campaign contributions and other financial transactions.

Reid, a liberal Democrat, and Lee, a rising star in Republican politics, could not be more opposite politically but both have ties to the on-line poker world, the prosecutors say.

This isn’t the first time a connection between Reid and Lee has arisen, John Solomon reports at the Washington Times, and it concerned Democrats at the time:

The investigative efforts have been further complicated by the fact that Mr. Reid worked to get Mr. Lee’s chief counsel, David Barlow, confirmed in 2011 as the U.S. attorney in Salt Lake City. That action — a Democratic Senate leader letting a Republican be named to a key prosecutor’s position in the Obama administration — raised many eyebrows and angered some Democrats.

Subsequently, the entire office of federal prosecutors in Utah was forced to recuse itself from the corruption case after questions surfaced about a conflict of interest involving one prosecutor and a subject of the probe. After the recusal, state prosecutors secured a court order transferring the federal evidence gathered up to that point to their possession.

The process has left FBI agents in the unusual position of trying to help two local prosecutors make a case in state court without the ability to use the federal court system to determine whether accusations against two powerful members of Congress are true.

That’s not the only “unusual position” that the FBI has had to take in this case. Normally, these kinds of allegations would go to a federal grand jury for further development, quarterbacked by the DoJ’s public integrity section. Instead, the DoJ has refused to do anything with the case:

The probe, conducted by one Republican and one Democratic state prosecutor in Utah, has received accusations from an indicted businessman and political donor, interviewed other witnesses and gathered preliminary evidence such as financial records, Congressional Record statements and photographs that corroborate some aspects of the accusations, officials have told The Washington Times and ABC News.

But the Justice Department’s public integrity section — which normally handles corruption cases involving elected figures — rejected FBI agents’ bid to use a federal grand jury and subpoenas to determine whether the accusations are true and whether any federal crimes were committed by state and federal officials.

The FBI is “frustrated” by the lack of cooperation at Justice in the probe:

People familiar with the probe said both FBI agents and local investigators have been frustrated for months by the Justice Department’s inaction on the initial accusations and evidence against the two senators, and those concerns were recently elevated to FBI headquarters.

The special agent in charge of the Utah office was summoned earlier this month to Washington to meet with senior FBI officials, and the bureau’s Utah office has been instructed that the FBI agents working the case may only assist in the state probe and cannot pursue federal criminal investigative leads — unless Justice finally approves a corruption probe.

The frustrations have prompted discussions of seeking a special prosecutor who would bypass the Justice Department and U.S. attorney’s office and evaluate the evidence independently. …

“But in this case, DOJ risks creating the perception of a cover-up rather than let agents use the normal tools and follow the evidence wherever it leads — Republican, Democrat, Senate or not,” the senior FBI official said.

The prosecutors have evidence that both Senators conducted pay-for-play efforts with donors and fundraisers, apparently in connection with online gambling interests, whose lobbyists are currently making a big push on Capitol Hill to legalize the industry in the US. Reid flipped his position on that and even introduced legislation to legalize online poker, but it didn’t go far, and the probe found evidence in a wiretap that Reid might have been paid off to do that. Lee’s issues deal with the sale of his home to a federal contractor and campaign contributor at a big loss, which his bank ended up absorbing.

Both Reid and Lee deny any wrongdoing, and the public-integrity section has had its issues with overzealous prosecution in the past, most notably with Ted Stevens. However, if the DoJ refuses to take any action when state prosecutors and its own FBI says a case needs more investigation, then we may not bother having a public-integrity section at the DoJ at all.


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Don’t worry. They are going after Lee. Reid being named is just a smoke screen

Brock Robamney on March 14, 2014 at 8:47 AM

Can we call it the Mormon Connection?

bflat879 on March 14, 2014 at 8:48 AM

then we may not bother having a public-integrity section at the DoJ at all.

Fixed it, at least until weasel-face is out of there.

platypus on March 14, 2014 at 8:51 AM

In an effort to wipe the trail clean of his involvement with these unethical — and potentially criminal — practices, Swallow retroactively altered records, deleted documents and had his attorney author a statement on Rawle’s behalf that indicated the former AG was not involved in brokering a deal in 2010 in which Johnson believed he was going to pay Senate Majority Leader Harry Reid $600,000 to make a federal investigation into his company go away, the report alleges.

Flora Duh on March 14, 2014 at 8:54 AM

an indicted businessman and political donor

Tony Rezko?

ThePrimordialOrderedPair on March 14, 2014 at 8:56 AM

Tony Rezko?

ThePrimordialOrderedPair on March 14, 2014 at 8:56 AM

More like this.

platypus on March 14, 2014 at 9:02 AM

Holder is just looking out for his people.

Rule of law is sooo pre-Obama.

With lawlessness this rampant, let me reestablish my long position: Kliegs and Concertina wire.

Murphy9 on March 14, 2014 at 8:57 AM

Tanks Flora!

Murphy9 on March 14, 2014 at 9:02 AM

Power corrupts.

mankai on March 14, 2014 at 9:03 AM

Clearly they are going out after the Mormon mafia.

Happy Nomad on March 14, 2014 at 9:04 AM

Don’t worry. They are going after Lee. Reid being named is just a smoke screen

Brock Robamney on March 14, 2014 at 8:47 AM

Read the story, Lee attorney and Reid…

This is about, no matter what side of the aisle, these goons will work together if it means lining their pockets.

This is just another sign that their is no real effort for these “leaders” to do anything but gain power, at any cost…America, the protection of America, the building of America, is of no use except to line their pockets and feed their ego.

right2bright on March 14, 2014 at 9:04 AM

Wrong link.

platypus on March 14, 2014 at 9:05 AM

In an effort to wipe the trail clean of his involvement with these unethical — and potentially criminal — practices, Swallow retroactively altered records, deleted documents and had his attorney author a statement on Rawle’s behalf that indicated the former AG was not involved in brokering a deal in 2010 in which Johnson believed he was going to pay Senate Majority Leader Harry Reid $600,000 to make a federal investigation into his company go away, the report alleges.

Flora Duh on March 14, 2014 at 8:54 AM

Yep.

According to Johnson…He was burned…

Dated a year ago…

“Embattled St. George businessman Jeremy Johnson says new Utah Attorney General John Swallow helped broker a deal in 2010 in which Johnson believed he was to pay Senate Majority Leader Harry Reid $600,000 to make a federal investigation into Johnson’s company go away.

But when the federal government filed a lawsuit Johnson thought he had paid to quash, he demanded Swallow return some of the $250,000 initial payment.

Senator Reid’s spokeswoman had no comment for the Times on the developing story. Other accusations of ethical misconduct have dogged the Democrat politician, particularly involving real estate deals….”

https://www.ijreview.com/2013/01/29571-senator-harry-reid-implicated-in-600000-bribery-scandal/

http://www.discoverthenetworks.org/Articles/SenatorHarryReidsEthicalScandals.html

workingclass artist on March 14, 2014 at 9:05 AM

Tanks Flora!

Murphy9 on March 14, 2014 at 9:02 AM

;-)

Flora Duh on March 14, 2014 at 9:08 AM

Power corrupts.

mankai on March 14, 2014 at 9:03 AM

Absolutely.

Flora Duh on March 14, 2014 at 9:09 AM

Lee sold a house in a short sale and a bank lost money? Happened to millions of people and the feds bailed out the banks. That’s corruption on Lee’s part?

Reid sold support for a federal government job. That’s not corruption?

Let the chips fall where they may. This sounds like the Keating Five banking scandal. McCain was one of the five. He attended one meeting to hear a pitch for a federal bailout. The other four were democrats and obviously selling influence. They hauled in McCain to make the corruption look bipartisan.

McCain was stupid enough to trust the lizards on the other side of the aisle and got tarred. McCain deserved it just for being so stupid and a “maverick.” Lee is a pasty, and none too smart for working with someone like Reid.

InterestedObserver on March 14, 2014 at 9:10 AM

Once again more evidence that the whole system – regardless of party – is corrupt and nothing more than an illegal enterprise. They spy on you, they lie to you, they steal from you. The empire is falling.

MoreLiberty on March 14, 2014 at 9:12 AM

Most corrupt DOJ ever.

sadatoni on March 14, 2014 at 9:15 AM

Let the chips fall where they may. This sounds like the Keating Five banking scandal. McCain was one of the five. He attended one meeting to hear a pitch for a federal bailout. The other four were democrats and obviously selling influence. They hauled in McCain to make the corruption look bipartisan.

McCain was stupid enough to trust the lizards on the other side of the aisle and got tarred. McCain deserved it just for being so stupid and a “maverick.” Lee is a pasty, and none too smart for working with someone like Reid.

InterestedObserver on March 14, 2014 at 9:10 AM

McCain was just as guilty as everyone else there. He got cold feet and bailed on them. He had every intention of making some dough when he was first approached.

Johnnyreb on March 14, 2014 at 9:17 AM

Dark Money…It’s what’s for Breakfast….

“Allegations against Reid may center on his financial and political relationship with online poker companies.

As for Lee, a House Special Investigative Committee report released Wednesday tied him and his campaign fundraising efforts to Swallow, who, according to the report, helped create a network of political committees meant to launder and hide hundreds of thousands of dollars of campaign contributions from the payday loan industry in which Swallow once worked.

Neither Reid nor Lee responded to calls late Thursday.

Chief among them are the allegations against Lee and Reid, as well as the House investigative committee’s conclusion that Swallow violated numerous federal laws in cultivating — and then attempting to cover up — a “pay to play” relationship with wealthy, well-connected friends and supporters…

The senators » Embattled St. George businessman Jeremy Johnson went public in early 2013 with allegations that Swallow had helped broker a deal between Johnson and payday loan mogul Richard Rawle to involve Reid in an attempt to stall a federal investigation into I Works, Johnson’s online marketing company.

Johnson alleged the intent was to use Rawle’s connections to pass money to a Reid associate in order to enlist the Nevada Democrat’s help, but Reid’s office denied knowing anything about the deal and Swallow has said the attempt was merely to get lobbyists to work on Johnson’s behalf.

Johnson said he had first encountered Reid at a 2010 fundraiser in Las Vegas sponsored by online poker interests at which Reid promised to introduce legislation to clarify laws on the legality of online poker. Johnson said he believed a $1 million check he drew from money that came from poker processing went to Reid, according to a transcript of a recording of the April 2012 meeting at the Krispy Kreme doughnut shop in Orem between Johnson and Swallow.

Johnson’s I Works and a business associate paid Rawle $250,000 as part of their deal. Subsequent disclosures showed that $50,000 of that money went to a Las Vegas law firm with close ties to Reid.

Johnson also may have been involved in raising money for Lee’s campaign, as facilitated by Swallow, according to the House report released this week.

In a February 2010 email recovered from Swallow’s crashed hard drive, which the House investigative committee obtained this month, Swallow asked then-Attorney General Mark Shurtleff, “can i [sic] introduce Mike Lee to Jeremy Johnson?” Shurtleff responded, “Sure.”

By June of that year, Johnson had apparently arranged for thousands of dollars of contributions to Lee’s campaign. In an email that month, Swallow notified Johnson that checks to the Lee campaign from four of Johnson’s associates — which the report said totaled $9,600 — had bounced. Swallow forwarded the exchange to the Lee campaign, a suggestion, the report said, that Swallow was coordinating his efforts with the candidate’s campaign.

The report also revealed several new emails that showed Swallow’s intimate involvement in helping to coordinate the raising of hundreds of thousands of so-called “dark money” — unreported funds, moved through a series of nonprofits to avoid having to report the donors, many of which were payday lenders.

Rawlings and Gill declined to comment about specific allegations involving Lee and Reid, but noted their offices will “not ignore” any alleged breaches of Utah law.

“We do not have sufficient evidence to convict any United States senator of any state crime and our focus to date has not been on that prong of allegations,” Rawlings said. “The current voluminous investigation into various state officials, associates or surrogates is not yet complete. It is our hope that the DOJ will re-engage related to any potential federal aspects of this case….”

More background at the link:

http://www.sltrib.com/sltrib/home3/57678156-200/swallow-federal-reid-johnson.html.csp?page=2

workingclass artist on March 14, 2014 at 9:19 AM

I protest! If it were you or I who were the subject of this investigation, we would as sure as Hell be prosecuted. The political class in Congress, however, has protection.

oldennis on March 14, 2014 at 9:28 AM

The blatant corruption of this Administration has become nauseating!

oldennis on March 14, 2014 at 9:31 AM

May their mistresses give them the clap.

CurtZHP on March 14, 2014 at 9:38 AM

DOJ: We’ve thoroughly investigated Sen reid, and found no evidence of any wrongdoing. Sen Lee, however, is on his own.

rightside on March 14, 2014 at 9:43 AM

If Lee did something wrong, I want him investigated and prosecuted. I don’t care what party or political leanings are. I want all of the crooks in Washington jailed. The Feds really ought to build more jails.

h a p f a t on March 14, 2014 at 9:44 AM

The Salt Lake Tribune is very left leaning and NOT a trusted source.

Just so you know.

Gunlock Bill on March 14, 2014 at 9:52 AM

Pay no attention to these two public servants behind the curtain, they’re very busy working to serve their constituency and America.

lel2007 on March 14, 2014 at 9:55 AM

If Lee did something wrong, I want him investigated and prosecuted. I don’t care what party or political leanings are. I want all of the crooks in Washington jailed. The Feds really ought to build more jails.

h a p f a t on March 14, 2014 at 9:44 AM

If anyone suggests there’s no real difference between parties, I’m inclined to agree with them except for this. When a Republican breaks the rules, we want him out. He’s done. When a democrat breaks the rules, their voters eat it up, they circle the wagons, and his career in politics is secure. In fact, it’s a resume enhancement.

CurtZHP on March 14, 2014 at 10:04 AM

But the Justice Department’s public integrity section

…Ha ha ha!

KOOLAID2 on March 14, 2014 at 10:11 AM

public-integrity at the DoJ

Hahahahahahahaha!!!!!!!!!!!!

Not as long as “Pardon me” Holder is running things.

GarandFan on March 14, 2014 at 10:12 AM

Under Eric Holder, the DOJ Public Integrity Section should be buried with work. But apparently they are all on vacation until 2016, unless a Republican stubs his toe and no Democrats like Reid are found laying on the sidewalk next to him.

novaculus on March 14, 2014 at 10:35 AM

The Republican Establishment in Utah hates Lee, so I’d be careful about jumping to any conclusions.

The John Swallow-Jeremy Johnson mess probably touched everyone in the state, to be honest. Swallow was a big deal, so everyone had contact with him. I’m sure Hatch is tangentially involved, along with everyone else. How can you not be? This was a big election. So everyone knew swallow. And Johnson probably donated money to everyone.

I know, I worked for Johnson as a peon for a few months before the Feds shut him down. It was an ethically challenged company. Johnson himself is a weird dude–he coldly bilked millions of dollars from his clients, but at the same time he was very charitable and spent months in Haiti helping rebuild after their earthquake. Dude’s an enigma.

But when the Fed’s came knocking, he ran scurrying to get as much political cover as possible–and took down our AG as it turns out. I hope he didn’t get his hooks into Lee.

That said, I’d be not at all surprised at Harry Reid’s involvement. Johnson just was looking for power to protect him (It didn’t–they hauled him off a plane to Costa Rica with several million dollars of cash)

They are just trying to jump on Lee, I think. His stand on the shutdown angered lots of Establishment RINO types here, who are gleefully throwing him to the wolves. I”m not sure what he is supposed to have done wrong though. And you can’t trust the Tribune–given the choice between curing cancer and stabbing a conservative, or the LDS church somehow–they’d pick the second choice, every single time. They are MSNBC without the charm, intelligence, and political evenhandedness MSNBC is so well known for……

Vanceone on March 14, 2014 at 10:55 AM

R or D doesn’t matter they’re all lying stealing scumbags. Liberals and Conservatives are the worst since they’re also self deluded.

Your Mamma loves me on March 14, 2014 at 11:03 AM

Holder is much like a bookmark…a place holder (ouch…didn’t intend the pun)…more than an operating enforcer of laws. His time in office has been more that of one continually identifying more and more laws that he would not enforce. It would out of character for him to actually prosecute anyone…particularly of his ideological bent.

TKPedersen42 on March 14, 2014 at 11:39 AM

Lee’s issues deal with the sale of his home to a federal contractor and campaign contributor at a big loss, which his bank ended up absorbing.

Is there a law against selling something to a campaign contributor or a Federal contractor?
I guess it needs to be investigated because there could be some tit for tat involved but many people have sold their house at a big loss. Real Estate investors look for these short sale deals and lots of banks are more than happy to get these deals off their books.

Vince on March 14, 2014 at 11:39 AM

I’m more inclined to believe Lee is innocent. But it sounds like there’s enough evidence for an investigation.

And I think we all know that the DOJ would not be running interference for Lee. Reid, on the other hand…..

There Goes the Neighborhood on March 14, 2014 at 11:59 AM

Unless Lee had a secret deal with the bank, a short sale is just that,…Selling a home “short” of what is owed on it….. Yes Lee has to accept the offer, but it is the bank that has the final say…

sandee on March 14, 2014 at 12:02 PM

The Obama Administration needs to rename the Justice Department the ‘Just-Us Department”. The abuse of prosecutorial discretion is so blatantly biased toward protecting the friends and associates of the Administration it boggles the mind that anyone would think this is proper and ‘equal protection’.

Lee seems to have gotten off the hook simply because they could not go after him without implicating Reid. If it were not for Reid’s involvement, Lee would have been toast long ago.

s1im on March 14, 2014 at 1:36 PM

ABSCAM – the ’70s sting which had the FBI using a con man to pose as an Arab sheik with money to “invest” in the US and needing favors from politicians. You may recall the famous video of Rep. John Murtha, who wanted to take the bribe but to have an assistant pick up the cash instead of leaving with it. They handed out cash to six congressmen and one US Senator (Harrison Williams, D-NJ) was snared before Jimmy Carter’s AG, Griffin Bell, caught wind of it and shut it down.

Supposedly the morning Bell found out was the very day his old friend Senator Herman Talmadge (D-GA) of Watergate Committee fame was due to pick up his payment. Talmadge never showed.

According to Mel Weinberg, the con man, it all began when he was running a con in Jersey and was approached by local Commissioners wanting pay-offs to approve his proposed racetrack. Weinberg didn’t bite – his project was a scam, he just wanted investors to fleece, nothing would ever be built. But when the FBI busted him, he remembered the crooked officials and the feds agreed to let him run a sting on them.

Before they knew it, they had offers of many other politicians to bribe. Starting with the congressman, they moved into Congress in DC with briefcases full of cash, and met with instant success.

Weinberg claims they had leads on dozens of others and if it had been allowed to proceed they would have caught even more.

Democrats at DOJ don’t like investigations into Congress. I can’t imagine why.

Adjoran on March 14, 2014 at 3:04 PM

I would gladly sacrifice Lee in order to get Reid behind bars, but only if Reid goes down in flames…

Big John on March 14, 2014 at 4:13 PM