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PPA Linked to Full Tilt / PokerStars SunFirst Bank Lobbying Effort, Part 1: Backstory

The Poker Players Alliance and its executive director, John Pappas, have been directly linked to a private 2010 lobbying effort orchestrated by Full Tilt and PokerStars on behalf of the St. George, Utah SunFirst Bank payment processing enterprise which was at the core of the the United States Department of Justice’s “Black Friday” crackdown against US-facing online poker sites.

sunfirstbank-logoDocumentation provided to this writer by the Salt Lake Tribune confirms that Pappas and the PPA were enlisted as part of a two-pronged effort to create a front of legal legitimacy for the SunFirst Bank processing operation, which began in late 2009 and was discontinued in late 2010 by order of the United States’ banking regulatory agency, the Federal Deposit Insurance Corporation (FDIC) .

The involvement of Pappas and the PPA on behalf of Full Tilt and PokerStars, the two online poker sites who were for several years the PPA’s largest corporate donors, began at least 13 months before the April, 2011, “Black Friday” indictments centered on the SunFirst Bank processing operations were released.

The multifaceted, private lobbying effort which included the PPA was directed at then-Utah Attorney General Mark Shurtleff and his Deputy Attorney General, John Swallow.  Swallow later succeeded Shurtleff to Utah’s top legal post after Shurtleff declined to seek reelection for health reasons.

The effort was designed to buttress the presumed legality of the SunFirst poker processing operations, which would be shot down months later via the efforts of federal investigators.  Meanwhile, SunFirst itself was promised a $10 million investment into its foundering operations by payment processors Jeremy Johnson and Chad Elie, money that was to be derived from the PokerStars (and later Full Tilt) operations.

It is noted here that despite the intrinsic involvement of Pappas and the PPA in the SunFirst lobbying effort on behalf of Stars and Tilt, there is neither an indication, nor evidence, of direct involvement of Pappas or the PPA as an organization in two separate bribery allegations made by Johnson that involved Johnson, Swallow (and the Utah AG’s office), and other business and elected officials including the US Senate Majority Leader, Harry Reid (D-Nevada).

However, the PPA’s unwavering support throughout much of 2012 for a Reid-Kyl bill whose provisions the PPA claimed it hadn’t even seen remains an interesting, if separate, topic.

In the first of Johnson’s allegations, Johnson himself is alleged to have paid $600,000 to Swallow, via a mutual business acquaintance, to make a massive FTC internet marketing fraud investigation into Johnson and his Utah-based iWorks empire disappear.

A second bribery allegation made by Johnson concerns his relating of a tale in which a $1,000,000 cashier’s check was forwarded by Johnson to Reid on behalf of Full Tilt, sent to a “media company” connected to Reid, in exchange for Reid’s agreeing to introduce federal-level online poker legislation. The so-called Reid-Kyl bill may have been the product of that agreement, and was strongly backed by the PPA before Congressional support for the measure collapsed in the December, 2012 lame-duck  session of Congress.

That telling of the story by Johnson included an unnamed Full Tilt executive as stating that the million dollars for Reid was described thus: “Let’s just say [Reid] got a little something in his retirement fund.”

According to Johnson, the million had to be directed anonymously.  Said Johnson, “Well, I’m not kidding you, a week later, they have me—and they’re specific—‘We want a bank cheque drawn on the bank’s general account.’ For a million dollars, to some company, some media thing or something. ‘A cashier’s cheque. This money had better not get traced back to our account under any circumstances.’”

It was in this environment of alleged bribery done by Full Tilt that the mention of Pappas and the PPA emerged, clearly warranting the reporting of poker’s most prominent lobbying group in close proximity to the operation which led to the shutdown of the largest US-facing online sites.

Documentation related to this story strengthening the lobbying connection between SunFirst and the PPA was provided to this author only in the last week, well after this author published two pieces separate pieces reporting on the possible PPA-Jeremy Johnson connection and the mention of Pappas and the PPA in the secretly taped April, 2012 meeting between Johnson and Swallow that included the bribery allegations.  The pieces written by this author were published at pokerfuse and 4Flush, respectively, and were published on January 31 and February 1, 2013.

The publication of those pieces led to an immediate backlash piece published within hours at PocketFives, in which PPA Executive Director Pappas assailed this author for the supposed “disgraceful” insertion of Pappas into the Johnson bribery tales, which wasn’t an “insertion,” but rather the exact transcription of the online-poker chat Johnson and Swallow exchanged as captured on Johnson’s secret 2012 recording.

The relevant PocketFives paragraph, including Pappas’s quote:

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.

— PocketFives

However, additional information would soon surface, courtesy of another Salt Lake Tribune story, published on February 14th, titled “Poker debate pops up in Johnson-Swallow meeting, emails”.  This story included excerpts from e-mails as provided by Jeremy Johnson which further illimunated the SunFirst lobbying effort, which was designed to obtain a favorable legal opinion from the Utah Attorney General’s office, thus perhaps to shield the SunFirst processing operation from later claims of illegality.

This author contacted the Salt Lake Tribune regarding the Feb. 14th story, and in an exchange of information, was provided the documentation showing the long-term involvement of Pappas and the PPA in the private lobbying effort regarding SunFirst, designed to benefit Full Tilt and PokerStars.

The remainder of this series’ pieces will examine the documentation as provided by the Tribune, note those people connected with SunFirst, PokerStars and Full Tilt (in addition to Pappas and the PPA) who can be shown to involved, and explain the environment in which the lobbying effort ultimately failed.

It should also be noted that five questions pertaining to Pappas’s existing relationships with former Utah AG John Shurtleff and SunFirst / Elite Debit processor Johnson, and the financial extent of the corporate donations made to the PPA by Full Tilt and PokerStars were publicly posted last week on the PokerFraudAlert forums, owned by Todd “Dan Druff” Witteles, in a thread devoted to an appearance on the PFA podcast by PPA board member Rich “The Engineer” Muny.

Despite subsequent acknowledgment by Muny of the questions being posted, and a concurrent direct e-mailing of the questions to Pappas by this author, Pappas and the PPA have declined to answer the questions, despite the previous blasting of this writer’s earlier pieces as “disgraceful”, and an earlier offer by Pappas and the PPA to engage this author in a no-holds-barred interview.

(continued, Part 2)

. . . .

(The author wishes to thank Tom Harvey and the Salt Lake Tribune for providing source material connected to these features.)

Related Links:

Part 1

Part 2

Part 3

Part 4

Timeline

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