John Pappas

Jeremy Johnson and the Million-Dollar Harry Reid Bribe Allegations Mean Online Poker Trouble

Have you heard about the alleged million-dollar bribe SunFirst bank payment processor Jeremy Johnson indirectly paid to Harry Reid, on behalf of Full Tilt Poker?  The allegations made by Johnson come as part of a release of a much larger tape secretly made by Johnson which was released to the Salt Lake City Tribune, as part of a separate bribery scheme also alleged by Johnson that involves current Utah Attorney General John Swallow.

As trustworthy sources go, Johnson isn’t exactly at the top of the heap, since he’s also under federal criminal indictment for massive online telemarketing fraud regarding the practices of his Utah-based marketing empire, through which he built snug relations with both Swallow and Utah’s former AG, Mark Shurtleff.

Still, Johnson was clearly and intrinsically involved in the SunFirst online poker processing enterprise which serviced PokerStars and Full Tilt from late 2009 through early 2011, and Johnson also had deep connections with both the Utah pols and with Harry Reid, who he now claims was the recipient of an anonymous million-dollar check sent to a third party at Reid’s discretion, a bribe paid for Reid’s promise to introduce federal online poker bill.

The complete excerpt dealing with online poker is available over at the fuse, but let’s focus in on this little piece for today:

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.

J: John Pappas, and Ray Bitar, owner of Full Tilt Poker.

S: Yeah.

J: Owner of Full Tilt Poker. [] And Senator Reid—this was when it was a tight election with this lady down there, real tight…

S: Yeah… yeah, sure. I remember that.

J: 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.”

Johnson subsequently described how an unspecified Full Tilt exec then instructed him to pull a million dollars from Full Tilt funds in the form of an untraceable cashier’s check drawn on SunFirst Bank, which was then sent to a “media company” connected somehow to Reid.  Reid has vehemently denied all of Johnson’s allegations, it should be noted.

One question that’s already arisen is whether the meet between Reid, Johnson, Bitar and the PPA’s Pappas actually occurred.  Convicted Black Friday processor Chad Elie, an associate of Johnson’s, already provided the answer to that a couple of months back, posting this photo on Twitter:

reid-johnson-pappasAs well as this photo, which Elie took, showing Reid, Bitar and Howard Lederer:

elie-reid-lederer-bitarReid’s got the same tie on in both photos.  The meet probably took place in the summer of 2010, and quite possibly at the Golden Nugget in Las Vegas, judging by the decor.

Therefore, it is quite likely that the meeting took place with the participants as described, though as to whether any actual bribery was discussed — and by whom — is left to the reader’s judgment, based on their belief in Johnson’s tale.  Johnson, for his part, is clearly trying to take down several politicians who he regards as having left him in the lurch regarding his own FTC investigation and charges.

There’s more to this, which goes into conjecture and speculation that didn’t really fit my fuse piece.  Notice in the above excerpt, the way that Utah AG Swallow acknowledges knowing who the PPA’s John Pappas is?

There are a couple of possible explanations.  Whether or not Pappas and Swallow had previous contact is impossible to know (and seems unlikely), yet both Elie and Johnson have claimed, and Elie published, a letter authored by the Utah Attorney General’s office of Mark Shurtleff and Swallow that the SunFirst operation as described to them was probably legal.

So there is some discussion of online-poker matters there.  Then, there is also this other exchange, from earlier in the audio published by the Salt Lake City Tribune:

Swallow: “Do they know about your poker transaction with Harry Reid and stuff?”

Johnson: “I don’t think anybody knows that. Honestly, you’re the only person in the world I’ve even told that to.”

It was Swallow who brought up the online poker processing in the midst of the discussion over Johnson’s greater iWorks troubles, and it indicates that the two of them had previous discussions over the issue, as well as its possible political ramifications.  To me, that’s the most likeky way Swallow learned of the PPA and the federal online-poker regulatory efforts, but the answer to that isn’t publicly known at this time.

It’s all going to be a big mess for efforts to pass federal-level online poker regulation in the United States.  First, the mere presence of the PPA anywhere near these talks confirms what most insiders already knew, that the PPA’s never been much at all about the players, but instead was a thinly veiled mouthpiece for whatever corporate interests would pay its way.  For several years, that was Full Tilt (and PokerStars).

Depending on what emerges on this topic in the future, that closeness to Full Tilt and to these allegations could leave a lasting stink on the PPA.  That same stink could hang around Harry Reid as well.  Regardless of what comes of these allegations, it’s not likely that Reid will be too enthusiastic about re-championing online poker legislation any time soon.



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