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Sen. Mike Lee's campaign says it will donate about $40,000 to several charities this month, giving away funds suspected to be made illegally by indicted St. George businessman Jeremy Johnson.
The alleged impropriety prompted an elections complaint that was dismissed earlier this year.
Johnson is accused of having funneled $50,000 through friends and business associates to Lee's 2010 Senate race. If true, it would have violated federal election law, which at the time capped campaign contributions at $2,400 per person and prohibits so-called "straw donors" as a means to circumvent the limit.
The Alliance for a Better Utah filed a complaint with the Federal Election Commission in June 2014. The campaign's treasurer denied any knowledge of any straw donations. In June, the FEC, without proof of violations and with a deadline looming for the commission to act, voted to dismiss the complaint.
"Although the Lee Committee has remained cooperative and produced relevant documents voluntarily, the record of the Lee Committee's knowledge of Johnson's reimbursements remains incomplete," the commission wrote. "In light of the impending expiration of the statute of limitations … and taking into account the sworn declarations submitted in response to the complaint denying such knowledge, the commission dismisses the allegation [the campaign broke the law]."
Boyd Matheson, who recently stepped down as Lee's chief of staff to run the first-term GOP senator's re-election campaign, said Lee will donate $40,000 in suspect donations to various charities later this month.
Josh Kanter, founder of the Alliance For A Better Utah, said he was pleased the FEC took the complaint seriously, but the outcome was not terribly surprising.
"I'm not thrilled the statute of limitations is the reason to bring it to a conclusion. It shows there was merit to at least raising the question," Kanter said, who added that he is pleased that the campaign is donating the contributions in question to charity.
"If they're doing that, at least it does whatever they can do to undo something that can't be undone," he said. "I think the charitable contribution is a real decent answer to that part of the complaint and hopefully they didn't really know about [the donors] and that puts the matter to bed."
The FEC has sued Johnson in federal court, alleging he broke the law in 2010 by using straw donors to conceal $50,000 in contributions to Lee and an identical scheme to channel $100,000 to the aborted Senate campaign of then-Utah Attorney General Mark Shurtleff and $20,000 to then-U.S. Senate Majority Leader Harry Reid, D-Nev.
The arrangement came to light during the Utah House's investigation of misconduct under former Attorney General John Swallow. Emails were uncovered during that inquiry in which Swallow informed Johnson that a number of the checks to the Lee campaign bounced, and Johnson responded that he would fix the problem.
In the lawsuit filed against Johnson, the FEC cites statements Johnson had made to investigators in the Swallow criminal case in which Johnson said Swallow encouraged him to make the contributions because Lee could be useful in trying to stave off potential criminal charges against Johnson.
The lawsuit was met with anger by the prosecutors in the Swallow and Shurtleff cases, as well as Johnson, who believed Johnson was promised immunity in exchange for his cooperation.
As part of that lawsuit, the FEC produced an email from Jon Stanard, who was then working on the Lee campaign but now is a state legislator, to Johnson, asking him to provide contact information for 14 donors including Johnson so the information could be included in the campaign's financial-disclosure reports.
Swallow and Shurtleff each face multiple felony and misdemeanor counts stemming from allegations of corruption within the attorney general's office. Both maintain they are innocent.
Johnson is battling 86 bank fraud-related charges leveled against him in federal court. His attorneys have asked a judge to dismiss the counts, alleging government attorneys improperly accessed thousands of emails between Johnson and his lawyers.