The Jeremy Johnson / Harry Reid Online Poker Bribery Brouhaha

by Haley Hintze on February 1, 2013

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    Yesterday’s publication of a feature at pokerfuse regarding bribery allegations made by SunFirst online-payment processor Jeremy Johnson, which reported Johnson’s personal retelling of a million-dollar bribe he claims was sent to US Senator Harry Reid on behalf of Full Tilt Poker, was one of those pieces guaranteed to raise eyebrows.

    The piece was authored by yours truly, and I expected that writing the story would result in at least a little bit of pushback, even if the story was likely to be received warmly overall.  This behind-the-scenes tale looks at both the story itself and the pushback, because it’s an interesting example of how poker writing — both the good and the bad of it — really works.

    First the news itself, which requires some lead-in.  For those unfamiliar with some of the backstory surrounding the United States “Black Friday” crackdown, many of the allegations therein centered on activities of the SunFirst Bank in St. George, Utah.  SunFirst was the bank used for processing transactions to and from US players of PokerStars and Full Tilt from late 2009 to early 2011, when the FTC ordered the bank to stop such processing.  The Black Friday indictments were handed down about three months later, in April 2011.

    Jeremy Johnson’s intimate connection to the SunFirst saga took some time to become public.  He was not listed among any of the Black Friday defendants, while payment processor Chad Elie (a partner of Johnson’s) was, as was SunFirst banker John Campos.

    Johnson remained uncharged in the Black Friday case even though he was the primary figure of the SunFirst operation, a bank so ingrained with his corporate presence that employees referred to it as the “Bank of Jeremy Johnson.”  Yet Johnson remained uncharged, but only because of a separate Federal Trade Commission (FTC) against Johnson and his fraudulent iWorks telemarketing empire.

    Due to massive shuffling of money and accounts and business names by Johnson’s accountants, Johnson’s iWorks corporations and Black Friday-related poker-processing businesses were intermingled essentially from the start, the better to hide and disguise assets.  But even though Johnson wasn’t even mentioned in the DOJ’s Black Friday filings, he was its central figure.  His case remained the “property” of the FTC, and in a splitting of cases and interests, the DOJ took the rest of the Black Friday stuff, while leaving Johnson to the FTC.

    Yet Johnson is a rich and powerful man, one of the kingpins of Utah’s telemarketing industry, with close ties to both the former and present Utah Attorneys General, Mark Shurtleff and John Swallow.  Johnson and Chad Elie even received approval from them regarding the SunFirst poker processing… though the FTC later said no way.

    That closeness between Johnson and the Shurtleff/Swallow crew has triggered plenty of other events as well.  Johnson lavished plenty of favors on both Shurtleff and Swallow, who duly seem to have given him an advance tip-off regarding the FTC case, which eventually resulted in a $275 million civil complaint, and the additional filing of criminal charges against Johnson.

    Johnson also seems to have secreted tens of million dollars in off-the-book ways, meaning gold, silver, gems and currency, stashed in multiple locations throughout the American Southwest.  And via his connections with Shurtleff and Swallow, he subsequently tried to bribe his way out of his FTC case, using Swallow and a now-deceased businessman named Richard Rawle to send $600,000 Harry Reid’s way.

    That episode is the heart of a large series of expose pieces published by the Salt Lake City Tribune throughout January, which was of marginal interest to poker players because of the SunFirst Bank and Harry Reid connections. Swallow may well be forced out as Utah’s AG, which is cool, because he’s a crooked bum.

    Yet earlier this week, when the Tribune decided to release an audio tape of a Johnson / Swallow meet that Johnson secretly recorded at a Utah donut shop, there was some more poker news embedded within.  Johnson and Swallow, who already knew about Johnson’s SunFirst poker processing started talking poker, and Johnson related his tale about how he allegedly funneled a million-dollar bribe from Full Tilt to Reid’s coffers, drawing an untraceable cashier’s check from SunFirst Bank’s general reserve.

    That made up the second half of the ninety-second exchange on the topic, buried 40 minutes into the tape.  The set-up for the meeting where the potential bribe was discussed (which probably happened in Las Vegas in 2010) made up the first half of the poker exchange, and it went like this:

    Johnson: I’ll tell you this. We had a meeting with Reid, where he said—this was a private meeting—it was Reid, it was me, it was, you remember John Pappas? Remember him? Poker Players Alliance guy?
    Swallow: Oh, yeah.
    Johnson: John Pappas, and Ray Bitar, owner of Full Tilt Poker.
    Swallow: Yeah.
    Johnson: Owner of Full Tilt Poker. [] And Senator Reid—this was when it was a tight election with this lady down there, real tight…
    Swallow: Yeah… yeah, sure. I remember that.
    Johnson: And he said, “Look, I’ve polled my constituents. They don’t like online poker. Bottom line. It’s bad for… it’s bad for jobs here in Las Vegas. But, I’m going to back what you guys are doing here. I’m going to introduce a bill for you.”

    I transcribed that myself from the audio that the Tribune published, which is “fair use” for news in excerpt form.  And I knew it was a potential hornet’s nest, too.

    I knew my story at pokerfuse would likely be the first full release of this part of the audio transcript, and I also knew that the excerpt itself was very newsworthy.  CalvinAyre.com ran a brief story on it where it’s clear they listened to the audio, but the writer of the piece chose not to run the full exchange, for whatever reasons.

    It went through several rewrites with quite a bit of input from Michael Gentile, pokerfuse’s co-editor, and we kept this piece as bare-bones and straighforward as possible, with just about everything that could be taken as opinion or conjecture taken out.  We pulled a paragraph that mentioned that Swallow had to have some prior knowledge of who the PPA’s Pappas was, simply based on his subtle affirmations during the exchange.

    But here’s the thing: Nothing in the piece stated that Pappas and the PPA were party to the bribery attempt, if it even occurred.  All the story was was a verbatim accounting of Jeremy Johnson’s allegations, and I reiterate that they alone constitute an important news story, whether the allegations are proved out or not.  Johnson, Reid, Ray Bitar, Full Tilt, a million-dollar bribe… eventually true or not, it was still a story.

    And we also had direct evidence that a meeting of some form had occurred, as convicted Black Friday defendant Chad Elie had published two relevant photos on Twitter, one showing Reid, Jeremy Johnson and the PPA’s John Pappas, and the other showing Reid, Bitar, Howard Lederer and others, including Greg Raymer, who was also on the PPA’s board, for whatever that’s worth.

    There were lots of poker-politics people at this event, whatever it was, and that was clear.  Obviously, if they discussed any sort of a deal, it wasn’t done in front of 100 other people, but maybe over a lunch just down the hall or in another room.  Photos, courtesy of Elie:

    elie-reid-lederer-bitar

    reid-johnson-pappas

    So we ran the story hot, with Johnson’s allegations clearly defined as just that, allegations.   The title: “Jeremy Johnson Alleges $1 Million Harry Reid Bribe on Full Tilt’s Behalf”.

    Could it have been any more clear?

    Johnson had provably met with all these people, and now he was making these allegations.   That was the story.  It’s also quite obvious that in his ongoing, well-funded campaign to defend himself, Johnson is smearing all of his former political cronies who left him in the lurch.  Johnson is nobody’s perfect witness, but the fact that these allegations exist on a recording that has been deemed genuine by the Salt Lake City Tribune is itself worthy of reporting.

    If I hadn’t done the legwork, then sooner or later, another poker writer would have.  True, a lot of so-called poker writers are just lazy rewriters, but someone would have gotten around to it, eventually.

    It was only a few hours later that an outraged statement from the PPA’s John Pappas appeared over at PocketFives, which I regard as a generally useless site.  Let’s never forget P5s was the site that was sold to a business entity related to Absolute Poker, at which time all serious discussion of the AP cheating was excised from its forums.

    Anyhow, P5s seems to have become one of the PPA’s pet outlets, and the piece included this gem:

    Pappas concluded, “It is disgraceful that the PPA’s name has been inserted in this supposed ‘news story’ by an editorial writer who has a history of being critical of our organization.” The writer in question is Haley Hintze.

    I haven’t merited bold-faced mention in a while, so that’s cool.  But what utter crap by Pappas.

    It’s true that I have been critical of the PPA on occasion, typically when they assume a high-horse role of claiming to speak for all poker players and being a “grass roots” organization.  They claim that role despite the majority of their funds, ever since the organization’s inception, coming from corporate interests such as Full Tilt.  But the PPA has also done some good work in specific cases in amassing and submitting evidence regarding the skill nature of poker, and I have written about that as well.

    Nonetheless, the PPA has demonstrated a strong interest in controlling the message and attacking anyone who doesn’t adhere to their preferred storyline.  And that’s the real reason why the PPA and I have butted heads in a couple of recent instances.

    The thing is, a real reporter doesn’t allow others to control the message; the news itself determines the story.  There are a lot of bad, pretend-writers in the poker business who would argue that Johnson’s allegations are the type of thing that should be swept under the rug, because they are “bad for poker”.  These allegations just might be bad for US online-poker prospects at the federal level, because Harry Reid will be a little less likely to get involved.

    I don’t waste my time reading writers like those.  I know their work is a giant shuck, and I skip it for better content and real news, good or bad.  P5s, I’m looking your way.  I can’t think of the last time I read a “news” story there before yesterday.

    The allegations that were made by Jeremy Johnson regarding the bribery attempt are an example of this real news, simply in the process of them being made by a guy intrinsic to the Black Friday affair, who’s involved in a related federal case worth hundreds of millions of dollars.  It’s a story.  The audio was published, and it would have reported by someone, sooner or later; in this case that someone happened to be me.

    That Pappas was mentioned by Johnson in the context of his discussion is unfortunate for Pappas, but Johnson said it.  I didn’t “insert” anything.  That Pappas finds this “disgusting,” and immediately sought a venue to launch yet another PPA-themed attack on this writer merely for transcribing a conversation, is as bad and blatant an example of shooting the messenger and attempting to manipulate the message as it gets.

    I know who was disgusting yesterday, and it wasn’t me.

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