Online Poker Ties and Bribery Allegations Haunting Harry Reid

Posted By Steve Ruddock on March 21, 2014

There are a number of storm clouds forming around Senate Majority Leader Harry Reid, with allegations of bribes being paid to/discussed in order to gain Reid’s support for online gambling legislation according to an excellent summary of the current situation by Jocelyn Wood of PokerFuse.com.

Fortunately for Reid, the Department of Justice has decided to not investigate the matter, which was brought before them by Utah prosecutors in a report that also includes allegations against Utah Senator Mike Lee.

This current wormhole all began with the Black Friday indictments, and in particular payment processor Jeremy Johnson, former Utah Attorney General John Swallow, and the bogus payment processing that was occurring between US-facing online poker sites and SunFirst Bank in Utah prior to Black Friday.

However, there may have been a relationship stretching back even further based on one of the allegations.

The bribery allegations

There are two separate allegations that tenuously link Harry Reid to Johnson.

The first, according to pokerfuse.com, is a purported $1 million allocation of funds to Reid via Full Tilt Poker in exchange for Reid’s support of online poker legislation that was brought to light by Jeremy Johnson back in January of 2013—it should be noted that Johnson’s accusations on the secretly recorded tape are second-hand to begin with, and it also fits in with the narrative he is trying to sell Swallow to make his FTC case go away; that Reid can be bought.

Reid’s possible ties to Johnson and Swallow surfaced again in a the 200+ page report by the Utah legislature who relied on the private investigation company the Mintz Group to compile the evidence.

Haley Hintze of FlushDraw.com (who also wrote the PokerFuse.com story mentioned above detailing the alleged $1 million bribe) is breaking down the report in an ongoing series. There is also an excellent write-up at DesertNews.com detailing what is specifically on those taped conversations.

This second mention of Reid has to do with Johnson’s FTC case where he tries to enlist the help of Swallow to get a favorable outcome, and includes several references to Reid, as well as “Reid’s Guy” who is identified as Richard Rawle, who passed away in December of 2012.

From page 13 of the report:

In a secretly recorded conversation with Mr. Swallow that day at a Krispy Kreme shop in Orem, Utah, Mr. Johnson threatened that if Mr. Swallow failed to the get that refund, Mr. Johnson might implicate Mr. Swallow in an alleged effort to bribe Senate Majority Leader Harry Reid.

From page 19 of the report:

An article published in the Salt Lake Tribune on January 12, 2013 recounted allegations by Mr. Johnson regarding Mr. Swallow. Mr. Johnson asserted that, while his business dealings were facing scrutiny from the federal government, he sought Mr. Swallow’s assistance. According to the article, Mr. Johnson alleged that he and Mr. Swallow were involved in an effort to “pay Senate Majority Leader Harry Reid $600,000 to make a federal investigation into Johnson’s company go away.”

According to the allegations as recounted in the article, Mr. Swallow told Mr. Johnson that his (Swallow’s) associate, Richard Rawle, had a “connection” to Senator Reid, and Mr. Swallow then arranged for Mr. Johnson to pay money to Mr. Rawle, some of which was to be used to pay Senator Reid,

From page 20 of the report:

Mr. Johnson apparently provided the Salt Lake Tribune with a recording of a conversation between Mr. Johnson and Mr. Swallow that took place at a Krispy Kreme shop in Orem, Utah on or about April 30, 2012. The recording reflected that at that meeting, the two men discussed the situation with Senator Reid as well as Mr. Swallow’s use of a houseboat owned by Mr. Johnson.

What this means for iGaming

With allegations circulating of seven-figure bribes circling around him it’s unlikely Harry Reid will want to touch anything to do with online gambling, either for (which would only ignite further scrutiny and headlines) or against (which would not only be a reversal of his previous stance but would lead to a lot of raised eyebrows as to why) which means you can reduce the possibility of a federal online gambling bill in 2014 from small to almost nonexistent in my opinion anyway.

In addition to the likelihood of a bill being passed dwindling, these allegations also reflect extremely negatively on the online gambling industry as a whole, even though the bribery attempts seem to be isolated to just a few particular puzzle pieces that were operating illegally post-UIGEA.

What this means for Reid in 2016

Whether these allegations have any legs to them is somewhat of a moot point, as the allegations themselves are usually enough to harm a politicians career.

It wasn’t a given that Harry Reid would be running for reelection in 2016 to begin with (although all signs are currently pointing to yes) and I say this for two reasons:

#1: Had the Republican Party fielded a candidate other than Tea Party darling Sharon Angle in 2010 there is not a doubt in my mind that Reid would have lost his reelection bid.

While I can’t rule out another daffy Republican nominee, it’s quite unlikely that Reid will hit a two-outer on the River two times in a row. If he does run in 2016 he will almost certainly face a far more competent opponent.

#2: The Democrats may not hang on to the Senate.

If Republicans regain control of the senate in 2014, or it looks like they will in 2016, Reid may very well call it a career when his term is up in 2016, when he will be just a month shy of turning 77 years old. In the current climate, being the minority leader of the Senate is probably a role Reid would not like to have.

On the other hand, if the Democrats are in firm control of the senate when the 2016 elections roll around Reid might very well run again.

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Steve Ruddock

Steve is a well-recognized voice in the regulated U.S. online gambling industry. He writes for a number of online and print publications including OnlinePokerReport.com, USA Today, and others, with a focus on the legal market.

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