Swallow and Rawle have denied Johnson's allegations. They say the money was for lobbying, not payoffs. Reid's office also denies knowledge of such a deal.
But, according to recent disclosures, $50,000 of the money Johnson and an associate paid to a company owned by Check City owner Rawle went to the Las Vegas law firm Brown, Brown & Premsrirut. The firm's Web pages list it as a criminal defense firm. It is not registered to do federal lobbying.
Jay Brown, however, is a registered lobbyist for the payday-loan industry board on which Rawle sat and also has long-standing personal and business ties to Reid. According to the State Bar of Nevada, he shares an address and telephone and fax numbers with the Las Vegas firm.
Brown did not return phone calls and emails seeking comment for this story.
A Swallow company called P-Solutions LLC received money from funds Johnson paid to the Rawle company RMR Consulting LLC. Swallow and Rawle, the latter in a deathbed statement, have said the money was not a fee for the Johnson deal but rather for consulting work on a possible future cement plant in Nevada, although the money came from Johnson's I Works company.
Statements by Rawle and attorneys for RMR Consulting have shed light on where the I Works monies ended up, providing a clearer picture of the deal, although its objective is still very much disputed by the participants.
Rawle said, in a statement signed just three days before his Dec. 8 death, that of the $250,000 I Works provided to RMR, he "wired $100,000 to lobbyists and asked them to go to work" to help Johnson fend off the Federal Trade Commission investigation into I Works.
Subsequently, attorney Sam Alba who represents RMR, Check City and the Rawle family issued a statement saying $50,000 of that money was paid to T.R. Rupli & Associates, a Washington, D.C., lobbying firm. Alba has not answered two subsequent emails seeking more information.
Rupli & Associates owner Tim Rupli said he typically builds a case for clients with members of Congress about the worth of a product or industry and then persuades them to contact an agency or congressional committee chair to discuss the issue. But with I Works, Rupli said, Rawle never supplied the information he needed to build a case for I Works.
"I wanted to represent this guy [Johnson]. That's what I do for a living. But I wanted to have a credible case to present to members of Congress who then would write to the FTC about that service or product this guy was selling," Rupli said. "We never got one shred of credible argument provided by Richard Rawle to us that would say this guy had a case."
A second $50,000 of the "lobbying" money went to the Las Vegas law firm of Brown, Brown & Premsrirut.
But the firm's website lists its areas of practice as criminal law, "drug charges, drug charges from pool or night club at hotel/casino, cocaine, ecstasy, methamphetamine, domestic violence, women charged with domestic violence, domestic violence strangulation, casino markers."
The firm is not registered to lobby either Congress or the administrative branch. Jay Brown was registered as a lobbyist in 2010-11 for Caesers Entertainment Corp. on the issue of Internet gambling, a topic Reid has been actively involved in for several years. Brown also lobbied for a payday-loan industry trade group called the Community Financial Services Association in 2011-12, though the RMR payment to the Brown firm likely was made in December 2010. Rawle sat on the group's board before his death.
Brown also has deep personal and business ties to Reid. In the senator's 2009 autobiography, The Good Fight, Reid calls Brown a "longtime friend," with the families close to the point that their kids frequently played with one another growing up. Their youngest children, Key Reid and David Brown, became best friends, the book says.
David Brown, now an attorney at Brown, Brown & Premsrirut, did not return phone calls or emails seeking comment for this story.
The Associated Press reported in 2006 that Reid and Jay Brown engaged in questionable land deals in Nevada in which Reid earned $1.1 million on a $400,000 investment that probably violated Senate ethics rules when the Nevada Democrat failed to report his interest in the sale.
In addition, the Las Vegas Review-Journal quoted a retired FBI agent as saying Jay Brown has been a "person of interest" in separate investigations of organized crime.
"I think if you know Brown, you will have an inside track to Reid," said Steve Miller, a former Las Vegas city councilman who now writes columns on organized crime and has written about the Brown-Reid relationship.
But lobbyist Rupli said that although Jay Brown was an attorney for Rawle for a number of years, "I knew and worked with [both] for several years, and it's absurd that either would bribe anyone or do anything shady."
Johnson alleges that in September 2010, after months of frustration in trying to convince the FTC that his I Works company was operating legally, Swallow convinced him that Rawle had close ties to a Reid confidant and could make the FTC investigation disappear for a price. Swallow insists he only introduced Johnson to Rawle and played no further part in what he believes was an effort to lobby the FTC on Johnson's behalf.
Still, in an email to Johnson dated Sept. 29, 2010, Swallow says Rawle was on his way to Las Vegas to meet with a Reid contact and that the deal would cost a lot of money.
Johnson claims he had reached an agreement with Swallow, then Utah's chief deputy attorney general, to pay $600,000 in what he understood was an effort to win Reid's help in thwarting the FTC investigation. Half that amount was to be paid right away and half later. Johnson, Rawle, Swallow, at least one Rawle employee and a Johnson friend met Oct. 12 in Provo at Rawle's company headquarters and formulated a plan, according to Johnson.
Swallow denies he was at that meeting, and the Dec. 5 Rawle statement also says Swallow was not there.
Two days after the meeting at Check City, Rawle registered the new company RMR Consulting LLC, according to records of the Utah Department of Commerce.
On Nov. 2, Johnson's I Works sent $50,000 to a Bonneville Bank account for RMR Consulting. A month later, I Works deposited another $200,000. Johnson said he persuaded I Works finance manager Scott Leavitt to provide the latter from his personal funds because I Works was insolvent at that time and, Johnson claims, Swallow had assured him the deal would work.
Swallow denies that level of involvement.
According to his deathbed statement, Rawle kept $150,000 of the initial $250,000.
Of that, $50,000 was a fee for his part of the deal, Rawle said. He used $23,500 of his fee to pay Swallow, although Rawle and Swallow have said the payments were not a fee for the Rawle-Johnson deal, even though they came from the RMR bank account.
Johnson has said he was told repeatedly that Swallow wouldn't get a cut from the deal with Rawle.
Beyond his fee, Rawle kept an additional $100,000 of the I Works funds. He said it was because a court had frozen Johnson's and I Works' assets. But the freeze did not take place until Jan. 13, 2011, and after that, sometime in the spring, Rawle said he made a second payment to Swallow from the RMR account.
Just 20 days after the last payment was made to RMR, the FTC sued Johnson, I Works and others. Rawle had made it clear in an October meeting with Johnson that "because of the short amount of time I Works had, his attempts to gain an audience with the FTC may not work," RMR attorneys have said in recent weeks.
Johnson has said he relied on Swallow's confident assurances that the problem could be taken care of, something Swallow denies saying. Johnson also has acknowledged he thought he might have been scammed by Swallow and Rawle, but that they had always assured him money had been paid on his behalf, although he said they had refused to divulge to whom.
Utah's chief deputy attorney general, John Swallow, emails Jeremy Johnson about "Mtg. with Harry Reid's contact" • Sept. 29
Meeting at Check City offices over deal concerning Federal Trade Commission probe of Johnson's I Works • Oct. 12
Richard Rawle registers new company called RMR Consulting • Oct. 14
I Works sends $50,000 to RMR Consulting bank account • Nov. 2
I Works sends second payment (from finance manager Scott Leavitt's personal funds) of $200,000 to RMR • Dec. 2
Rawle keeps $50,000 as his fee • sometime after Nov. 2 payment
Rawle pays Swallow's P-Solutions company $8,500 from his fee from RMR/I Works monies • sometime after Nov. 2 deposit
Rawle pays $50,000 to Washington, D.C., lobbying firm and $50,000 to Las Vegas criminal defense law firm • sometime after Dec. 2 payment
Federal Trade Commission sues Johnson, I Works and others • Dec. 21
Federal judge freezes Johnson/I Works assets and appoints a receiver • Jan. 13
Swallow announces his candidacy for Utah attorney general • Jan. 19
Rawle pays $15,000 to Swallow from RMR account • sometime in spring, probably March
Rawle receives refund check from Swallow/P-Solutions • May
Swallow wins election • Nov. 6
Rawle pays back Leavitt $75,000 and puts $25,000 into escrow • early December
Rawle cashes P-Solutions refund check • most likely early December