Agents quietly working with Utah prosecutors to make case in DOJ absence
FBI agents working alongside Utah state prosecutors in a wide-ranging corruption investigation have uncovered accusations of wrongdoing by two of the U.S. Senate’s most prominent figures — Majority Leader Harry Reid and rising Republican Sen. Mike Lee — but the Justice Department has thwarted their bid to launch a full federal investigation.
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 FBIagents’ 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.
• Whether both or either politician sought or received money or other benefits from donors and/or fundraisers in connection with doing political favors or taking official actions.
• Whether Mr. Lee provided accurate information when he bought, then sold a Utah home for a big loss to a campaign contributor and federal contractor, leaving his mortgage bank to absorb large losses.
“There are allegations, but they are very serious allegations and they need to be looked at by somebody,” Sim Gill, a Democrat who is the elected chief prosecutor in Salt Lake County, told The Times. “If true, or even if asserted, they truly should be investigated and put to rest, or be confirmed.”
Spokesmen for both senators denied their bosses engaged in any wrongdoing and said the lawmakers were unaware of the investigations.
The investigative efforts have been further complicated by the fact thatMr. 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.
“We’re just two local prosecutors but everybody who was supposed to look at this evidence above us has made a decision not to, and by default left it to us to investigate and prosecute at the state level,” Mr. Gill said.
State charges sought
The prosecutors said their current focus is pursuing state charges against Utah officials and figures, like former Utah Attorney GeneralJohn Swallow. To the dismay of the investigators, the Justice Department declined to prosecute Mr. Swallow, a Republican.
On Wednesday, a special committee of the Utah Legislature concluded that Mr. Swallow may have violated as many as eight state laws on abuse of public office.
Mr. Swallow “compromised the principles and integrity of the office to benefit himself and his political supporters,” and he “hung a veritable ‘for sale’ sign on the office door that invited moneyed interests to seek special treatment and favors,” the legislative report concluded.
Mr. Swallow has denied wrongdoing.
A senior law enforcement official familiar with the discussions amongFBI, Justice Department and state authorities said that after federal prosecutors declined to take the Swallow case or pursue the accusations about the senators, a decision was made to pursue justice wherever it could be achieved, even at the state level with FBI agents assisting.
“The sentiment was that it doesn’t matter in the end where it occurs as long as justice is served,” the official said, speaking only on the condition of anonymity.
Both state prosecutors said they eventually plan to pursue the accusations involving the senators and other federal officials — at least to determine whether any crimes were committed inside Utah borders that would warrant state charges.
“We’re sweeping up that information and those items of evidence,” saidMr. Rawlings, a Republican. “I think it would be unfair to say we are currently investigating Sens. Reid and Lee at this time. But we are not going to ignore the scraps of evidence coming in about them.
“Do we plan on formally turning attention to all of the scraps picked up about them? We do plan on that,” Mr. Rawlings said.
Justice ‘ran away’
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 theJustice Department and U.S. attorney’s office and evaluate the evidence independently.
FBI officials said it was rare but not unprecedented for their agents to assist a state-only investigation.
“We’ve let agents provide expertise and assist on the ground investigations for states in the past, especially in complex cases where federal crimes weren’t clear,” a senior FBI official in Washington told The Times, speaking only on the condition of anonymity because the official wasn’t authorized to talk to reporters.
“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.
“Based upon what we know today, we were surprised that the DOJ ran away,” he said.
FBI agents have conducted some interviews in Utah and provided analysis of bank records. But until the Justice Department engages or a special prosecutor is named, the agents are handcuffed from using a federal grand jury to gather evidence. FBI officials requested Justice Department permission last year but were turned down in August, officials said.
One focus of the investigation is on allegations by federally indicted businessman Jeremy Johnson, who says he was asked by Mr. Swallow and other intermediaries to route hundreds of thousands of dollars in campaign contributions and consulting payments to an associate of Mr. Reid and other companies in hopes that the senator would intervene on two matters.
The first was a dispute that Mr. Johnson was having with the Federal Trade Commission, which led to a fraud lawsuit against him.
Mr. Johnson says he was instructed by intermediaries to write a $200,000 check to one company and a $50,000 check to a personal friend of Mr. Reid in return for getting the senator to intervene with the FTC, an intervention that did not happen.
The second accusation involves the timing of Mr. Reid’s changing his opposition to legislation allowing Internet poker. Mr. Reid’s aides contend his change of heart was consistent with a broader shift underway in his state — and of the leading industry group, the American Gaming Association.
Mr. Johnson says Mr. Reid told the gathering: “Look, I’ve polled my constituents and they don’t like online poker, bottom line. … It’s bad for jobs here in Las Vegas. But I’m going to back what you guys are doing here. I’m going to introduce a bill for you.”
“I [Mr. Johnson] said, ‘How in the hell did you guys get him to do that?’ And he [the online gaming official] says, ‘Let’s just say he got a little something in his retirement fund.’ And I was like, ‘OK, that’s how it is.’”
Reid changes position
Mr. Johnson said in the recording that he was instructed by intermediaries to route a seven-figure check to a company on the West Coast.
Click Here to continue reading.