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The former director of the Utah Division of Consumer Protection has filed a complaint with the Utah State Bar, alleging embattled Attorney General John Swallow violated ethical standards when he had conversations with a business owner facing a $400,000 fine for breaking telemarketing laws.
The complaint is the latest allegation against Swallow over his dealings with businesses or individuals embroiled in government regulatory actions including Jeremy Johnson's accusation that Swallow helped in an effort to head off a federal investigation of the St. George businessman's I Works online-marketing company.
Now, Traci Gundersen, whose last day as head of Consumer Protection was Friday, is accusing Swallow of violating attorney-client ethical standards the Utah Attorney General's Office represents the division when he had contact last year with businessman Aaron Vincent Christner and didn't tell the agency.
"Having come from a private-practice background, it's baffling to me that the Attorney General's Office does that to its own clients," Gundersen said Tuesday in an interview.
Christner, along with partner Ryan Scott Jensen, had been cited in March 2011 by the division for telemarketing violations related to their companies.
They had been fined $400,000 because of previous missteps, and the Attorney General's Office had sued to collect the fine.
In April 2012, Christner called Swallow, then Utah's chief deputy attorney general and a leading candidate for the top job.
The bar complaint says Christner explained that he faced a big fine, was without money or an attorney and asked about meeting Swallow at a fundraising breakfast at Mimi's Cafe apparently an event for Swallow's campaign.
Swallow advised Christner to get a lawyer to fight the lawsuit and offered to arrange a meeting with then-Attorney General Mark Shurtleff.
"I'd be more than happy to, to um, you know, have you sit down with the attorney general. I'm not the attorney general yet, but that's not, I'm not over those areas yet," Swallow tells Christner, who recorded the phone call.
A transcript of the recording was included in the bar complaint.
"If he [Shurtleff] thinks it's a good idea," Swallow continues, "or he thinks you're right, or at least, or at least he can help you see if there is something to be done to get it worked out with the lawyers here."
He then told Christner of his plan to move the Division of Consumer Protection out of the Department of Commerce and into the Attorney General's Office.
"Now when I'm attorney general this is kind of confidential I'm going to try to restructure it so Consumer Protection is under the A.G. and the A.G. has more, more authority over those investigations, right, in fact, complete authority over that."
Gundersen said Swallow never contacted the Division of Consumer Protection to report the contact with a target of its actions and never consulted the agency about possible settlement negotiations.
Under legal standards, the complaint says, Swallow had an obligation to do so because the Attorney General's Office represented the division a relationship specified in Utah law.
Gundersen points out that, according to the recording, Christner started out talking about the fine from the state and then mentioned the Mimi's meeting.
"Right there you are presented with an immediate red flag, that what they are asking you is not on the straight and narrow," Gundersen said Tuesday.
She said Swallow should have told Christner he wouldn't exercise influence over a case pending in the Attorney General's Office, especially in return for a campaign contribution.
Gundersen said Swallow instead should have told Christner that "if you want to participate in some type of settlement negotiation, then let me check with my client."
Swallow's attorney, Rod Snow, did not return several messages seeking comment.
Gundersen, who previously worked as an assistant Utah attorney general, said she had prepared the complaint last June but held off filing because she feared retribution that would threaten her job. So she submitted the bar complaint Friday, the same day she left her post.
A bar official declined to comment on Gundersen's complaint.
The complaint is at least the second against Swallow to go to the bar. The progressive advocacy group Alliance for a Better Utah filed one in January after the Johnson allegations surfaced.
That complaint was over Swallow's acceptance of funds supposedly for consulting work while he was chief deputy attorney general from Richard Rawle, the late payday-loan entrepreneur whom Swallow hooked up with Johnson in a bid to halt a Federal Trade Commission investigation of I Works.
"It's a pattern of behavior with John Swallow," alliance Executive Director Maryann Martindale said Tuesday.
Her group also has complained to the Lieutenant Governor's Office over possible election-law violations by Swallow.
Swallow also faces an investigation by the U.S. Justice Department's Public Integrity Section over his relationship with Johnson and other business types.
Reporter Robert Gehrke contributed to this story.
The Swallow probe
Indicted St. George businessman Jeremy Johnson, who faces 86 criminal counts, has alleged that Utah Attorney General John Swallow, helped broker payoffs to enlist the aid of Senate Majority Leader Harry Reid in derailing a Federal Trade Commission investigation of Johnson's I Works business.
Swallow and Reid have denied the allegations. The Justice Department is investigating.
Excerpts from a transcript of the John Swallow-Aaron Christner telephone conversation from April 7, 2012
Christner: I was just talking to Rob and some people, and I'm in the call for, like coaching and mentoring industry, and just gotten some, I got a Department of Commerce Protection guy on my a, just won't leave me alone, and I just was actually calling to see, I have a, I got fined $400,000 in the state because I didn't have a bond or a license for three months, and
Swallow: We talked about this before, didn't we?
Christner: Um, no.
Christner: you know got on the phone and was talking to Rob, and that, and he suggested maybe I try to get a hold of you and maybe ... he brought up going to your breakfast at Mimi's Cafe and chat with you and see if there's, like, anything you can do?
Swallow: So uh, so you ran out of money?
Christner: I did for a while there, and I started generating leads, and I'm in a position now, where I can
Swallow: You better get yourself a lawyer so you're not letting this go to judgment
Swallow: And then, then, then I'd be more than happy to, to um, you know, have a sit down with the attorney general. I'm not the attorney general yet, but that's not, I'm not over those areas yet.
Swallow: But have you sit down with the attorney general, have him, or if he thinks it's a good idea, or he thinks you're right, or at least, or at least he can help you see if there is something that can be done to get it worked out with the lawyers here. Again the client, the way Utah's so dysfunctional right now, is the client is the Department of Commerce and Consumer Protection, and that is not someone we, uh, control or even influence greatly. It's because they work for the governor's office right now, and now when I'm attorney general, you know, this is kind of confidential, but I'm going to try to restructure it so that Consumer Protection is under the AG and the AG has more, more authority over those investigations, right, in fact, complete authority over that.
Swallow: ... I know there are always two, two sides to even a very thin pancake. And, and uh we have to certainly visit with our lawyers and our division chief and see what his take is on things, and a lot of times they try to work things out with people who are trying to do it right and made mistakes and don't have the ability to pay the whole fine. Usually there is a way to get that done in a way that is affordable for you and let's [unintelligible] you can go back on your way so, I would be happy to set that meet up with Mark, have you, me and him talk together.
Source: Ethics complaint to State Bar