Envision Ogden Briefing. Dan Schroeder 16 November 2010

Transcription

1 Envision Ogden Briefing Dan Schroeder 16 November 2010

2 What was reported in 2007 EO was formed in early 2007 by five local business leaders including Abe Shreve, who declined to name the others. Intended to push the idea of high adventure recreation. Fundraising dinner Feb. 8, welcoming Amer Sports to Ogden, attended by 300 at $120/plate. Sold tickets to Salomon Center Sneak Peek June 15.

3 What else we learned in solicitation to Historic 25 th Street Association said EO was a nonprofit ; contact person was Cindy Patterson (wife of Ogden CAO John Patterson) at Amer Sports. Salomon Center lease didn t take effect until after Sneak Peek event, so the city still controlled the building. Lt. Gov. office inquiry: EO considers itself a 527 organization, that is, a PAC for tax purposes. City Council candidate Sheila Aardema turned down funding offer from EO.

4 Campaign contributions, 2007 EO gave $1500 to Blain Johnson city council campaign, reported by Johnson on Oct. 26. Friends of Northern Utah Real Estate gave another $20,690 to Johnson and to Royal Eccles. FNURE s address was same as Johnson s law office. Johnson defeated Aardema by 65 votes; Eccles was defeated by incumbent Amy Wicks. Neither EO nor FNURE was registered with state or IRS.

5 Developments during 2008 EO belatedly filed IRS 527 registration in March; filed detailed disclosure statement in May. But nobody noticed. EO gave $2000 to legislative candidate Jeremy Peterson in October. (Peterson was defeated by incumbent Neil Hansen.) Following a complaint by Hansen, EO belatedly registered as a Utah PAC in December.

6 The smoking gun EO disclosure statement discovered on IRS web site (February 19, 2009). 6 pages of itemized contributions from many prominent businesses and individuals. 4 pages of itemized expenditures, including $20,700 to Norther Utah Friends of Real Estate plus $4684 to SOS Staffing for mayoral campaign signs and campaign support.

7 Major Contributors Wadman Corporation Leavitt s Mortuary Weber/North Davis Association of Realtors CTI Creative Times Wells Fargo Bank Manpower of Utah Richard and Judy Webber McKay-Dee Hospital Robert Hill Vectra Management Westland Ford Ogden-Weber Chamber of Commerce The Boyer Company Wilkerson Home and Design Ben Lomond Hotel Bank of Utah State of Utah (GOED) Ogden Regional Medical Center Coldwell Banker Prudential Utah Real Estate Weber Economic Development Corporation Qwest AMCAN Marketstar Nutraceutical Corporation Zion s Bank Hertz Car Sales Fresenius Medical Care UBS Financial Services

8 Sounding the alarm Articles and documents posted on Weber County Forum. Formal complaint filed with City Attorney Gary Williams on March 3, charging FNURE with violating Ogden s campaign finance disclosure ordinance. Williams allowed Johnson and Eccles to amend their campaign disclosure statements to name EO as the source of the FNURE contributions, then declared the problem cured. Newspapers finally covered the story on March 31, 2009.

9 Also reported Johnson at first couldn t name anyone associated with FNURE, but later said it was established by employees of a title company in his building. EO contributors ORMC, Qwest, and Camille Cain expressed concern that their contributions went to political campaigns. Abe Shreve said it was always EO s intent to support political candidates.

10 In summary: Envision Ogden raised over $80,000 under false pretenses, concealing its political nature from contributors. After expenses for its major events and web site, EO spent most of its net revenue (at least $28,884) on political campaigns. The major contributions to Johnson and Eccles were laundered through FNURE, so contributors and voters had no way of knowing they came from EO until months after the election. Unanswered questions: Who else was involved with Envision Ogden? Who was FNURE? How did an unknown, unregistered organization, run by a young realtor, have the credibility to solicit tens of thousands of dollars in contributions from local businesses, banks, hospitals, and even the Chamber of Commerce and the Governor s Office of Economic Development? But at this point the newspapers dropped the story.

11 The investigation Prompted by news reports, on April 6, 2009, Scott Reed of the Attorney General s office asked the financial crimes group of the State Bureau of Investigation to look into the matter. The case was assigned to Chief Investigator Jim Vaughn and Agent Scott Hansen. Vaughn also discussed the case with investigators from the FBI (which was not interested) and the IRS (which may or may not have opened its own investigation). Agent Hansen interviewed 8 of Envision Ogden s major contributors, plus Abe Shreve and Jeff Lucas. On June 30, 2009, Reed decided not to prosecute so the investigation was closed.

12 The 31-page report

13 SBI report highlights Lucas wrote checks from EO to FNURE under direction from Shreve. He delivered one FNURE check personally to Blain Johnson. When asked Who is Friends of Northern Utah Real Estate?, Shreve responded, That s Blain Johnson. Shreve said he was retaining an attorney, but would not say who. He also said a different attorney had told him there was nothing wrong with EO s activities, but again would not name the attorney. Dori Mosher also helped EO raise money.

14 SBI report highlights All 8 interviewed contributors indicated that their policies prohibit contributing to political organizations. Each contributor was asked How were you contacted [by EO]? By whom? Two (UBS and Marketstar) said they couldn t remember; Hertz Car Sales was contacted by Lucas, who works there; The other 5 were contacted by Mayor Godfrey and/or his office. These 5 were ORMC, McKay- Dee, Ogden-Weber Chamber, Weber Economic Development Corp., and Coldwell-Banker. Qwest had already told Dan Schroeder that EO s solicitation came from the mayor s office. McKay-Dee/Select Health contributed in hopes of gaining a stronger position with Mayor Godfrey and his consideration as an insurance option for Ogden City employees.

15 Nov. 2010: The Mayor Confesses City Weekly: Godfrey raised a majority of what [EO] raised and consulted with Shreve regarding candidates to support. Standard-Examiner: Godfrey admitted he raised funds for Envision Ogden that he knew could be given to political candidates

16 Potential felony charges Use of office for personal benefit, Utah Code (2) It is an offense for an elected or appointed officer or municipal employee to use or attempt to use the officer s or employee s official position to secure special privileges for the officer or employee or for others. Communications fraud, Utah Code any scheme or artifice to defraud another or to obtain from another money, property, or anything of value by means of false or fraudulent pretenses, representations, promises, or material omissions Money laundering, Utah Code conducts a transaction knowing the property involved in the transaction represents the proceeds of some form of unlawful activity with the intent to conceal or disguise the nature, location, source, ownership, or control of the property.

17 Other potential charges Utah Charitable Solicitations Act, Utah Code Political activity of municipal officer or employee, Utah Code and Ogden City Code Official misconduct, Utah Code and Registration of political action committees, Utah Code 20A Use of public funds for political purposes, Utah Code 20A Conspiracy, Utah Code Ogden campaign financing disclosure, Ogden City Code 1-8-2A and 1-8-3C Tax law for 527 organizations, 26 U.S.C. 527

18 The investigation resumes(?) Sept. 3, 2009: AG Scott Reed told Schroeder and Rep. Hansen that they were reopening the investigation. In response to periodic follow-up calls, Reed said little progress had been made through June, Sept., 2010: Investigation was transferred from SBI (Scott Hansen) to an investigator working directly for the AG office. Oct. 1, 2010: Envision Ogden gave $3452 to Utah Republican Party, then closed its doors on Nov. 8. The evidence of criminal wrongdoing is overwhelming, but much work is needed to determine exactly how Envision Ogden and FNURE operated, and thus to build a prosecutor s case.

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