Jason C. Powers: Spiderman Who could get caught in Powers campaign money web?

Transcription

1 SWALLOW AND SHURTLEFF CHRONICLED, PART 19 OF A SERIES Jason C. Powers: Spiderman Who could get caught in Powers campaign money web? By Lynn Packer October 5, 2013 Rumors are running rampant on Utah s Capitol Hill. Whisperings have it that John Swallow s and Mark Shurtleff s campaign fundraiser, advisor and confidant, Jason Powers, might be a target of the state s criminal investigation. Rumor has it that if Swallow and Shurtleff go down, Powers could go down with them. And if Powers goes down he might also take other clients with him, such as Mike Lee, Orrin Hatch or some Utah legislators. Powers consulting company, Guidant Strategies, cuts a wide swath in Utah politics. One of his partners says that in 2010, for example, Guidant was employed by more campaigns than any other consulting firm in the state, probably by double. That included Mike Lee s race in 2010 and Orrin Hatch s in Former State Rep. Brad Daw, R-Orem, who lost re-election in 2012 after an onslaught of negative mailers funded by Powers Political Action Committee (PAC) says, If you look at John Swallow's misbehavior it all revolves around money and having enough of it. Since Powers is his chief campaign fundraiser he had to know what Swallow was doing and, in my opinion, encouraged and even abetted it. Is he (Powers) going to be called as a witness or indicted? asks one political insider. He was obviously very close to both of those guys. Did he have a connection? Sure. Was it enough that he could be charged; I have no idea, the source said. The ongoing investigations could fizzle and turn up no evidence of criminal conduct. But, it if does, Capitol Hill chatter is that Powers could also be charged or be pressured into turning state s evidence in exchange for immunity from prosecution. Former legislator and political blogger Holly Richardson ( says, Jason Powers knows where the bodies are buried. She said that s why the Utah House committee investigating embattled Attorney General John Swallow has subpoenaed his electronic communications with Swallow. Powers, 40, who holds a University of Utah political science degree along with a master s degree in business administration, declined to be interviewed for this report. He won t do for himself what he has frequently done for his clients Swallow and Shurtleff: Make press

2 statements deflecting allegations and claiming contributions were properly reported by the campaign. Powers was the Swallow campaign s primary consultant for the 2012 AG contest as well as Swallows two failed attempts to get elected to Congress in 2002 and In 2012 Powers used three entities to provide the Swallow campaign, among several others, campaign products and services: His consulting business, Guidant Strategies; his corporation, Proper Role of Government Education Association and his PAC, Proper Role of Government Defense Fund. Instead of soliciting donors who could have made direct contributions to the Swallow campaign, Powers used four steps to rout money through those three entries and provide services and campaign products. Using what amounted to deploying a legal name-laundering system Powers killed two birds with one stone: Donor names were kept off the public record and his consulting company was assured of getting a candidates consulting business. The first step: Have donors contribute to a corporation Proper Role of Government Education Association. (In 2012 Utah law did not require corporations to disclose the names of donor who contribute through corporations. A new law, adopted earlier this year, does require disclosure.) The second step: The corporation contributes to a PAC-- the Proper Role of Government Defense Fund--which must disclose its donors. Because the names of actual donors have already been scrubbed clean, contributions to Powers PAC are shown as coming from his corporation, Proper Role of Government Education Association. The third step: Instead of the PAC making money directly available to campaigns the money goes to Powers full-service political consulting company-- Guidant Strategies. The final, fourth step is for contributions to be given to various campaigns in the form of in-kind services and products rather than cash. That s how Powers was able to keep the public from knowing who was behind the funds or services he routed to candidates. Reports filed by Powers corporation and PAC as well as those filed by candidates reflect the four-step process. 2

3 But the man who managed Powers education corporation-- Proper Role of Government Education Association denies the entity was used to launder names by going through a PAC. Dan Hauser, who was a member of the corporation s board of directors along with Jason Powers and his wife Malinda, said his organization was only involved in educating the people of Utah about political caucuses, conventions and voter outreach. (At the same time Hauser was running Power s education association he was U.S. Senator Mike Lee s state director. Before that he was Lee s deputy campaign manager and the finance director for Friends of Mike Lee. Hauser had also served as spokesman for Senator Lee s PAC, the Constitutional Conservatives Fund (CCF), which endorsed and supported Ted Cruz s senatorial candidacy in Texas.) Hauser says any depiction of his association being used to launder names is wrong. The association gave no money to the PAC, he said. I cannot remember one dollar going from the education association to the PAC. He said the money went to Guidant for educating the public about the election process. But the reports filed with the Utah Lieutenant Governor s Office show otherwise. Disclosures made in 2012 by Hauser s corporation, Proper Role of Government Education Association, show every penny of its $52,600 in outgoing contributions going to the PAC Proper Role of Government Defense Fund. And none directly to Guidant. Hauser told packerchronicle.com that he could not prove where his association s money went because he no longer had the records. He said he has since been replaced as a director by political fundraiser and strategist Jeremy Roberts. Roberts, however, says he does not have the records and that he came on board after the 2012 election cycle, so he has no first-hand knowledge of how the education association s money flowed to candidates. He said the association applied for 501(c)4 tax-exempt status two years ago, won that status about a month ago, and as an organization registered in Texas under the same name may be different from the Utah entity. (Because of the change in Utah law this year Utah corporations may no longer keep it s political donors anonymous it continues to be legal for federal 501(c)4 organizations to keep their donors secret. The so-called501(c)4s can legally lobby, endorse candidates and engage in campaign spending so long as those activities are not their primary purpose.) Roberts, like Hauser, disagrees that Powers used a four-step process to route money as depicted in the chart on page two. If Jason were laundering money, like not laundering money, but if you were trying to hide who was giving money to candidates, he would not have a PAC, Roberts said. What he would do is just have people donate, just pay directly to Guidant 3

4 Strategies and then just do in-kind work. He would skip the first two steps. He said there is no reason to engage the education association and PAC that Powers created. As an example Roberts used a widely publicized, alleged scheme about John Swallow brokering a deal that involved the owner of Check City funneling money to an associate of Senator Harry Reid to stop a Federal Trade Commission probe into accused fraudster Jeremy Johnson. If for example, let s say Richard Rawle the recently deceased owner of Check City, Roberts said, if he wanted work to be done for John Swallow s campaign, why would they ever disclose anything? They legally would not have to. All they would have to do is have a check written out to Guidant Strategies and then Guidant Strategies would do in kind work for somebody. Then Roberts used another example to explain why it does not take four steps to keep donor s names secret. Let s say you and I own a corporation. We make kites, it s a kite company. And we don t like Ralph Becker for some reason. So you and I want to take out the mayor of Salt Lake City. All we have to do is just go hire Guidant Strategies to do some campaign work against Ralph Becker. We don t have to donate to a corporation to give to a PAC to go give it to Jason Powers. That s unnecessary. I can hire a company to do anything I want. If I hire Reagan Outdoor Advertising to put up a billboard I can do it if I want to. I do not have to disclose it though a PAC. If Jason and or Mark Shurtleff or John Swallow did not want people to know who their donors were there are ways to do it. It is not the way you are describing If Jason wanted to hide money he would do it a different way and you would never know about it. Roberts says Powers is among Utah s top five campaign strategists. If you find people who ware honest they will tell you he is the one who saved Mike Lee. Roberts says Powers modus operandi is to form a PAC, personally raise money for it, and then contribute to campaigns with in-kind services from Guidant Strategies instead of giving cash. The donors aren t dictating who he is helping. It s Jason. The people that Jason gets money from are not people you would hide, Roberts said, People Jason gets fundraising from are people who show up on campaign disclosures. There would be no reason to hide it.i don t think anyone is asking Jason to launder and launder is not the right term but it s the same thing I don t think somebody is asking Jason if they can donate money to his PAC and then vicariously it ends in a campaign anyway. I don t think he is doing that. Roberts says besides Jason Powers he is friends with Orrin Hatch, Mike Lee, John Swallow (he first met him when Swallow was the bishop of a neighboring LDS student ward), Mark Shurtleff and Jeremy Johnson. Roberts set up a web site, utahag.com, to proclaim Swallow s and Shurtleff s innocence. To make sure his friendship with them was well placed he said he hired private investigators to determine that neither Shurtleff nor Swallow had done anything wrong. Roberts said the best one to explain it would be Powers but Powers, for the moment, is not talking to the press. 4

5 Jason Powers Super Hero Powers has racked up significant victories during his political consulting career, helping him groom an image as a miracle worker or superhero of sorts. He helped Tea Party candidate Mike Lee pull off what may have been Utah s political upset of the century by knocking incumbent Senator Robert Bennett out of the race. And then helped Orrin Hatch avoid a similar defeat at the hands of Utah Tea Partiers when it looked like Hatch would suffer Bennett s fate. This summer Powers wrote an article for Campaigns & Elections Magazine about how he helped Bennett lose and Hatch win at their respective caucuses. We shattered that myth in back-to-back Senate campaigns in Utah, and in the process delivered an important lesson for anyone plotting caucus strategy. In March 2010, Sen. Bob Bennett (R) virtually lost his third reelection bid on caucus night when statewide voter attendance doubled, buoyed by the efforts of Club for Growth and voters who self-identified with the Tea Party movement. That night, approximately 55,000 caucus attendees elected delegates to the Republican state nominating convention. When Bennett finished third at convention voting two months later, he was off the primary ballot, and his campaign was over. Sen. Orrin Hatch (R) took notice and immediately kicked of his plan for caucuses two years in the future. On caucus night 2012, the Hatch campaign had doubled caucus attendance again, up to approximately 110,000. Only this time, the growth in attendance came from those who identified themselves as traditional Republicans. My firm worked on both of these efforts working against Bennett in 2010 on behalf of Club for Growth and in 2012 for Hatch. Powers was the right-wing Club for Growth PAC s Utah coordinator. Bennett, in a TV spot, tried to blunt the effects of the PAC s negative ad campaign. The ads they are running against me are false, Bennett said. What they want is some kind of national publicity for their ability to knock off a Republican in a primary. They spend more of their time dividing Republicans than they do defeating Democrats. After Powers helped defeat Bennett at the convention level he then joined Mike Lee s primary fight against Tim Bridgewater, but without Club for Growth s continued financial support. That PAC saw both Lee and Bridgewater as being sufficiently conservative alternatives to the moderate Bennett. Even today Powers Guidant Strategies web site continues to crow about unseating Bennett. ( A page on the site shows various mailers used in the anti-bennett campaign. This independent mail campaign, funded by The Club for 5

6 Growth, drove home the tough hits on Senator Bennett's record, the website says. Many of the same Utah Tea Partiers who were out to get Bennett in 2010 were also out to dump Orrin Hatch in But, with Hatch, Powers switched from offense to defense. And took some of the credit for Hatch s reelection. Powers, however, may have been claiming more credit for Hatch s 2012 win than he was due. In fact part of Hatch s strategy was to hire Powers as a consultant and steer a few hundred thousand dollars to his company, Guidant Strategies, to make sure no Tea Party opponent used him or his PAC against Hatch. Guidant Strategies website also takes credit for helping defeat incumbent Utah County legislator Brad Daw. Powers was not even supporting any particular Daw opponent. He just wanted to, as his campaign said, Stop Brad Daw. Guidant took full credit for Daw s defeat: Direct mail campaigns can be especially effective in the small voting universes present in local legislative races. Representative Brad Daw was a popular incumbent. Polling at the beginning of the race showed him with more than a 4:1 favorable to unfavorable image, as well as more than a 25-point lead over his opponent. These mailers were instrumental in turning the tide in just over a month and defeating Brad Daw by nearly ten percentage points. One of Powers flyers showed Daw next to President Obama, both wearing photoshopped surgical caps, in an attempt to show Daw supported Obamacare. A mailer used the expression DawCare versus Obamacare. (In fact Daw had co-sponsored legislation to create the Utah Health Exchange in 2008 but also co-sponsored a bill for Utah to opt out of Obamacare.) In a recent interview Daw told packerchronicle.com that Powers ran a very sophisticated smear campaign based on grains of truth. Daw accuses Powers of conducting so-called push polls where campaign telemarketing calls are disguised as objective phone surveys and in reality used to influence voters rather than get their opinions. Daw said questions would be posed about the poll taker s opponent, such as hypothetically asking, If you knew Bob is a child molester would you still vote for him. In June last year Salt Lake Tribune columnist Paul Rolly wrote about Powers going after Daw. In order to avoid revealing the donors who paid for the mailers against Daw, Powers set up the Proper Role of Government Education Association, a nonprofit which donated more than $11,000 to the PAC for the flyers and, by law, does not have to disclose its contributors, Rolly wrote. He said that Daw s supporters believed Powers PAC went to extreme measures to hide the donors because he is working for the payday lender industry bent on punishing Daw for a bill he sponsored last session to impose stricter reporting requirements. Powers denied that, Rolly wrote, but it wasn't until this year that he established a PAC attacking Daw's 2007 health care bill. 6

7 Jeremy Roberts, who is a friend and now fellow PAC director with Jason Powers, believes Powers mailer campaign against Daw crossed the line. So Roberts says he produced a mailer, on his own, to counter Roberts, mailers. Robert s flyer depicts a negative campaigner (Powers?) as a sleaze ball with a cigarette dangling from his fingers. Daw says he appreciated Roberts support but thought Roberts paid for the mailer himself. But Roberts later sent Daw a $780 bill for the mailer. Daw says he was surprised to get the bill but paid it anyway despite the mailer, itself, saying that it had been paid by One Utah and not authorized by any candidate or candidate s committee. Daw reported the expenditure but says he checked One Utah s One s online disclosure and did not find an expense or reimbursement related to the flyer. Daw, however, may have ended up with the last laugh. Even though he was out of the legislature he convinced his colleagues to pass a bill that essentially outlaws corporate donor name laundering. The new law, now in effect, requires poll sponsorship disclosure and donor disclosure by 501(c)(4)s PACs that make at least $750 in political expenditures. It was never any secret that the new laws resulted from Powers attack ads and pseudo phone surveys used against Daw. Daw s victorious opponent, Dana Layton unsuccessfully argued against the new transparency initiatives. During the floor debate she argued that this type of discourse could put a chilling effect on First Amendment right(s). As an example she said, Most people s clothing is better opaque than transparent. And we have to ask ourselves, why does everyone want to know who is funding what? Because if it s public, people can go after them. Politicians can get back at people who funded opponents. Layton says Powers attack ads against Daw began well before she entered the race and that she never employed Powers as a consultant. That did not keep Provo s Daily Herald from editorializing about the connection: 7

8 Dana Layton of Orem, who defeated incumbent Republican Rep. Brad Daw in the primary race for a seat in the Utah House of Representatives (District 60), swore up and down that she wasn't close to political barracuda Jason Powers and his PAC, The Proper Role of Government Defense Fund. Powers was behind a series of attack mailers scandalously targeting Daw. The ads were, to put it politely, of dubious accuracy. Daw calls them downright dirty lies. Layton told the Herald at the time that she had nothing to do with any of that, and we published her claim on June 20. She told us she agreed with the mailers, but she was not connected to Powers. "I'm not sure what their dispute is with Brad, but they do have some valid points with his voting record," she said. If Layton had been wearing pants, they would have been on fire. Her recent campaign finance disclosure statement filed with the Lt. Governor's office shows donations on June 18 and June 25 from The Proper Role of Government Defense Fund. The donations total $3, $2,000 for campaign signs and $1,700 for a telephone town hall. These amounts represent her top donations in the latest report. Layton told packerchronicle.com that the Herald didn t bother to get her side of the story before running its commentary. She said she never knew Powers had donated until well after the fact. I received a donation of signs in my driveway. I did not know where from, she said. She guessed it was from a vendor who was already helping with the campaign. After the election was over I got a call from Jason Powers and he said that was from us and to fill out a value- inkind disclosure. One of Powers clients, Wayne Niederhauser, who Powers helped win in 2006, has now risen to the presidency of the Utah Senate. Niederhauser beat the Democrat, Trisha Beck, by just over 1,000 votes after out-raising her $253,000 to $48,000. She had been a target of what Salt Lake Tribune Columnist Rolly called cheap-shot gut punches from political consultant Jason Powers. Rolly wrote: Beck, the Democrat, was the victim of a similar Powers tactic several years ago when she was running for the Utah Senate against eventual winner, Sen. Wayne Niederhauser, R-Sandy, a Powers client. The attack on Beck took one vote out of context to make it appear she was in favor of legalizing medical marijuana, which was not true. That flier also used unflattering photos. Before that, a similar attack, using out-of-context quotes, helped Niederhauser defeat his GOP primary opponent Bryson Garbett with misleading claims that he was a tax hiker. 8

9 Who could become entangled in Powers money web? Jason Powers has helped a lot of politicians get elected through his wide-ranging web of influence. Those are good connections to have for any Utah Republican (Powers won t work for Democrats) aspiring to win elections and wield political power. But they could be bad connections if federal and state investigators find any wrongdoing on Powers part and decide to follow his money and explore his web of influence. If it turns out that any illicit donor solicitations and/or contributions passed through Powers or his PAC, he might remain steadfastly loyal to his clients and provide no assistance to the FBI or state investigators who are looking into, at the very least, his involvement with John Swallow and Mark Shurtleff. (A former state GOP official says he s not surprised that Shurtleff and Swallow attracted the attention of state and federal investigators. He said it was the sort of pressure they applied when raising money. I ll be there and you can count on me, is the sort of approach he said they had. He said it is unusual for an AG s race to be taking in the kinds of money, for campaigns that used to be funded with token amounts. But the source blames a Democratic AG for beginning the trend. All of a sudden Jan Graham got to be attorney general and the dollars went up significantly, he said. Shurtleff then Swallow continued from there. ) It could be that after multiple, intensive investigations that will take the better part of a year that no improprieties will surface that rise to the level of criminal misconduct. But in the meantime a lot of people with multiple connections to Jason Powers, his money-raising and money-disbursing entities and his consulting company may be sweating it out, even if all of their Powers-related matters are squeaky clean. Powers ties to Republican candidates and campaigns go back more than a decade but there s a list of them who were connected in some way in 2012 alone: Utah U.S. Senators Orrin Hatch and Mike Lee, Utah State Auditor John Dougall, congressional candidate Carl Wimmer, and several Utah legislative candidates: Aaron Osmond, Curtis Bramble, David Hinkins., Derek Brown, Evan Vickers, Jon Standard and Steve Eliason. and Jon Sanard. (Osmond s companies donated $110,000 to Swallow s AG campaign.) Both Powers corporation, his PAC and Guidant Strategies clients have filed financial reports with the Lieutenant Governor s office as required by law. Utah accountant Corie Chan Cowan was one of three directors for Proper Role of Government Defense Fund along with Powers and Jessica Fawson. Cowan had previously worked at the treasurer for Friends of Jason 9

10 Chaffetz and for the Orrin Hatch election committee and assistant treasurer for Huntsman for Governor. She was also an officer along with Mark Shurtleff and Jason Powers for the PAC Utah s Prosperity Foundation, a PAC connected with Shurtleff, Swallow and Guidant Strategies. She did the PAC s books and filed reports with the state. She said all monies are accounted for. Fawson was previously John Swallow s campaign manager, Orrin Hatch s director of strategic communication, Mike Lee s grassroots coordinator for Mike Lee, and Mark Shurtleff s campaign manager for his last AG win and then for his Senate race until it folded. Cowan now says she believes the PAC has ceased doing business. While she was there for the 2012 election year she said there was never a time that more money came in or went out that was not reported to the Utah s Lieutenant Governor and the IRS. But some of the public reporting by candidates and Powers Guidant Strategies appears odd, according to former legislator Daw. He told packerchronicle.com that there seemed to be an odd pattern with Guidant Strategies 2012, in-kind contributions to legislators Curt Bramble and to Daw s challenger Dana Layton. He said Bramble reported contributions involving Guidant going to and from Bramble. It s the from part Daw sees as strange. Daw understands the two Powers entities donating in-kind services and products to the candidates. But why, he asks, is money being donated back, from the candidates? Reporters only have access to publicly-filed candidates, corporations and PAC disclosures. State and federal investigators have subpoena power and can also look at their bank statements as well as paper and electronic communications. Meanwhile, after the Department of Justice dropped its federal case involving Shurtleff and Swallow The Deseret News reported that Utah Senate President Niederhauser questioned the need for those other probes to continue, including one by the House special investigative committee that's estimated to cost $3 million. "Everybody thought he should go because he was a crook and there was a lot of illegal things done. With this investigation, there's no charges, so I think a lot of that diminishes and kind of goes away over time," Niederhauser told the D-News.. That prompted Bryan Schott, Managing Editor of utahpolicy.com, to blog Correct me if I m wrong, but didn t Niederhauser warn other Senators to be careful making public comments about the Swallow case because they might have to serve as a jury if the House investigation leads to impeachment? Apparently he doesn t have to follow his own instructions, since he basically tossed the other probes on the rubbish pile. Obviously it doesn t settle the whole thing, but it settles a lot of it, Niederhauser told The Deseret News. Does it really warrant a lot of further investigation? Schott wrote. Niederhauser, who is now caught in the Jason Powers web, did not take long to retreat. The Ogden Standard reported that Niederhauser says he briefly questioned the need to continue a House investigation of embattled Attorney General John Swallow, following a decision earlier this month by the Department of Justice to not pursue federal charges against the AG, but he insists the probe needs to move forward. And, as it does, rumors will continue to fly on Capitol Hill. 10