Harry Reid Caught in $2 Million Bribery Scheme

Via Cousin John
 

The $2 million cashier’s check was drawn at a St. George bank Nov. 5, 2010.

From there, it was sent by FedEx to a Los Angeles attorney who represented Ireland-based Full Tilt Poker.

Made out to “Mail Media LTD” — a Full Tilt-owned entity used to launder online-gambling funds — the millions then were deposited at Basler Kantonalbank in Switzerland, where Mail Media had an account.

And from there, Davis County Attorney Troy Rawlings is investigating whether it went into a Marshall Islands account in the name of Searchlight Holding Inc. to benefit, or even bribe, Harry Reid, the once-powerful majority leader of the U.S. Senate whom online poker companies had been courting to push a bill to legalize their gaming across the nation.

But documents gathered by The Salt Lake Tribune from state and federal investigations, court filings and public records requests — including audio recordings of interviews and thousands of pages of transcripts, summaries by investigators, emails, requests for evidence and other materials — show that the Department of Justice (DOJ) and the FBI failed to pursue a vigorous investigation of this money and any potential tie to Reid.

The available evidence contains no direct connection between the money and the Nevada Democrat, only that Rawlings wants to dig into that possibility.

Federal authorities have stymied his effort, leaving Rawlings to wonder why. Were agents ordered to steer clear of that money trail? And, if so, by whom? In short, was there a cover-up?

“Harry Reid is presumed innocent and may actually be innocent,” Rawlings said in a written statement, adding that a “real, vibrant grand jury investigation” could exonerate him.

Even at the state level, though, Rawlings’ push for funding for a grand jury also has stalled. Attorney General Sean Reyes’ office has not turned over any funds for such an inquiry despite months of negotiations.

Reid’s spokeswoman did not return emails and a phone message seeking comment for this story. Previously, his office called any bribery allegations “unsubstantiated” and accused Rawlings of grandstanding to advance his political career.

The FBI declined to answer specific questions but in a joint statement with the Utah Department of Public Safety, FBI spokeswoman Sandra Yi Barker said, “At no time has the FBI or DPS been asked to back off of an investigation of any public official.”

Origins • Rawlings learned about the $2 million check from Jeremy Johnson.

The disgraced St. George businessman, according to transcripts and recordings of investigative interviews, told the prosecutor the money came out of poker funds at now-defunct SunFirst, where Johnson and his partners were illegally processing payments for poker companies. Johnson repeated the story to FBI agents that Reid, who leaves the Senate in January, was going to pocket “a little something extra” for his retirement in exchange for political help.

Johnson’s encounter with the FBI came after the DOJ had aborted an investigation of then-Utah Attorney General John Swallow and his predecessor, Mark Shurtleff, without filing charges.

The cases were picked up by Rawlings, a Republican, and Salt Lake County District Attorney Sim Gill, a Democrat. The two prosecutors were joined by Utah-based FBI agents, who, documents indicate, focused only on alleged malfeasance by the two former Utah attorneys general.

Indeed, the document trove tied to the criminal probes of Shurtleff and Swallow — along with a federal bank-fraud case that sent Johnson to prison — are notable for the DOJ’s disinterest in the allegations involving Reid.

“The FBI, via the Salt Lake City Field Office, was willing to investigate these allegations … wanted to actively engage,” Rawlings said. “The Salt Lake office was taking steps to do so, but suddenly they were not.”

Lobbying or bribery • The $2 million reached Shurtleff’s radar from Johnson, his longtime friend and campaign donor, who also told the then-attorney general in 2012 about a $250,000 bid to solicit Reid’s help in thwarting a Federal Trade Commission (FTC) investigation of Johnson’s I Works online-marketing company.

Johnson told Shurtleff that the deal involved Swallow, then a top deputy in the Utah Attorney General’s Office, and the late Provo payday-lending magnate Richard Rawle, who had access to Las Vegas attorney Jay Brown, Reid’s friend and sometimes-business partner.

Shurtleff said he asked Johnson why he considered the $250,000 a bribe and not just “straight-up lobbying” money — as Swallow has argued it was.

“He says, ‘because I bribed Harry Reid before,’ ” Shurtleff recalled in an interview with The Tribune.

Johnson went on, the former attorney general said, to tell the story about the poker companies and the $2 million. That prompted Shurtleff to turn to the feds — the U.S. attorney’s office for Utah, the DOJ and the FBI — two times in 2012 and again in 2013 after he left office.

Following the check • One of Rawlings’ requests to federal agencies seeks an email exchange between Full Tilt executives and Johnson that discusses “a wire transfer, or a cashier’s check, for $2,000,000, or any other amount in 2010,” according to records obtained through the Freedom of Information Act.

Johnson came to believe the $2 million check was meant for Reid after the Nevada senator, according to the businessman, said at a 2010 fundraising event with online-gaming groups that he would push a bill to clear up any doubt and legalize their U.S. operations under federal law.

Rawlings has granted Johnson immunity from prosecution in his investigation, dubbed “Rogue Runner.” In a Jan. 9, 2014, interview that was part of the probe, the prosecutor asked Johnson, “So you actually did give Harry Reid $2 million?”

Johnson replied, according to a transcript, “Well, it wasn’t written to him but—.”

The funds for the SunFirst cashier’s check were in an account for a company called Powder Monkeys, one of the entities set up in St. George in 2010 to process payments for Full Tilt Poker and PokerStars. The back of the check shows it was deposited into Mail Media’s Swiss account.

A copy of a Nov. 5, 2010, shipping receipt shows the check went via FedEx to Full Tilt’s Los Angeles attorney Ian Imrich, who did not return emails seeking comment.

Documents do not show where the money went, if anywhere, after Switzerland. But on Oct. 27, 2010 — a week before the check was cut — a Marshall Islands bank account was established under the name Searchlight Holding Inc., according to the country’s Reston, Va., business office. Information on who opened the account is not public — whether it was Reid or poker interests or someone else.

Rawlings believes there is a connection between the account and Reid, who has used Searchlight, the name of the Nevada town in which he grew up, with other entities, including his political-action committee, the Searchlight Leadership Fund, and the Harry Reid Searchlight Foundation.

Documents show Rawlings has been trying to obtain evidence from federal agencies about a Searchlight Holding Inc. registered in the Marshall Islands and seven “alleged overseas accounts in the Marshall Islands and Bermuda that purportedly relate to Senator Harry Reid going back to 1997.”