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The Utah attorney general's office has turned over an investigation into a development deal near a Draper FrontRunner station to federal authorities due to a potential conflict of interest involving former Attorney General Mark Shurtleff.

That decision was made more than two years into the probe after information came to light about Shurtleff's relationship with Mark Robbins, an erstwhile partner in Whitewater VII, the company under scrutiny for how it landed the project.

Shurtleff listed Robbins as a VIP guest for the then-attorney general's 2009 inauguration, including him as a "major contributor." A few months later, Shurtleff offered $2 million to another businessman, Darl McBride, who alleged Robbins owed him money, if McBride would take down a website critical of Robbins.

And, in the summer of 2009, Shurtleff visited Robbins and Robbins' business partner, Marc Sessions Jenson at the latter's villa at the exclusive Pelican Hill resort in Newport Beach, Calif.

Shurtleff said this week that he didn't consider his interaction with Robbins to be a conflict of interest because he never discussed the Draper project with Robbins.

"There is none. Zero," Shurtleff said. "I never had a discussion with Robbins about anything on any dealings with UTA, Whitewater, FrontRunner. In fact, I didn't even know he was involved in it until much later."

But Chief Deputy Attorney General Kirk Torgensen said Thursday that, as revelations surfaced of Shurtleff's ties to Robbins, it became apparent that — even if there were no actual conflict — the appearance meant the office no longer should be involved in the UTA probe.

"We spent significant time and energy working this case. Hundreds of hours of investigative time had been put into it, and we got to a point where, understanding that there was a clear, or at least an appearance of a, conflict, we made the decision it would be best to ask a federal agency to take over the investigation," Torgensen said. "They accepted that, and all of the documents, everything obtained by us in our investigation, have been turned over to them."

He said the request was made about six weeks ago — before reports of Robbins' ongoing involvement in the Draper project became public knowledge.

The attorney general's office did not comment Wednesday for a story in which government watchdogs raised concerns about the investigation in light of the Shurtleff-Robbins connection. And Robbins has not responded to questions from The Salt Lake Tribune about his role in the Draper development.

UTA spokesman Remi Barron said Wednesday that the agency had no role in deciding who would develop the land around the FrontRunner station, noting the deal was worked out between Draper and the developers.

When UTA is involved in selecting developers, he said, the agency follows state and federal laws.

Zach Frankel, executive director of the Utah Rivers Council, who had called for federal investigators to take over the case from the attorney general's office, said he hopes the feds conduct a thorough probe, but he is not optimistic.

"It's disturbing that we can't rely on the attorney general's office to do their job. It's sad there isn't justice in Utah for lawbreaking agencies," he said Thursday. "It's disappointing to live in the wild West, where no one cares if the law is broken."

A legislative audit in 2010 of the FrontRunner development found that then-UTA board member Terry Diehl may have violated state conflict-of-interest laws by consulting on the Draper project while serving with the transit agency. The Legislature referred the issue to the attorney general's office for investigation.

Robbins had stated publicly that he left Whitewater in March 2009, about the same time a judge issued a bench warrant for his arrest after he failed to show up for hearings in a civil suit. Diehl then transferred the company to Jeff Vitek and Boulder Ventures.

But Jenson, who is serving time in the Davis County Jail for securities violations, provided documents to The Tribune that showed Robbins was rounding up investors for the Draper project as late as November 2010.

Conflicts of interest have also forced the attorney general's office to hand off another case against Jenson.

Last month, the office turned over new fraud charges against Jenson to a prosecutor in the Utah County attorney's office due to a potential conflict with Shurtleff and his handpicked successor, John Swallow. Both Shurtleff and Swallow had stayed at Jenson's villa at Pelican Hill at Jenson's expense. Swallow and Shurtleff had previously been "walled off" from any involvement in the fraud case, but it was later decided the entire office should step aside.

Twitter: @RobertGehrke