State Rep. Mike Morley is facing lawsuits in Utah and New York, seeking to recoup $3 million "loaned" to him by a hedge fund that allegedly defrauded millions of dollars from investors.The whole reason most folks are challenging incumbents for seats in Utah's legisture is their concerns that certain legislators have grown out of touch, especially on issues of ethics. While Utah Democrats have been capitalizing on this to recruit candidates, many Republicans have bravely sought to primary their local legislator.
But the topic is off-limits for Chance Williams, who is challenging Morley for the Republican nomination in House District 66. Williams is making ethics the centerpiece of his campaign, but says he was told not to raise the issue at a Meet The Candidates event tonight in Spanish Fork.
The Utah County GOP chairwoman claims it is all about "civility" and being innocent before being proven guilty. But the point isn't whether or not Rep. Morley is guilty of any wrongdoing, the point is that it looks bad and incumbents seem to be blind to such appearances of impropriety. Here are the particulars:
Morley had $5 million invested through Thompson Consulting Inc., a Cottonwood Heights-based firm headed by Kyle J. Thompson, in a pair of hedge funds.Oh and there is a civil lawsuit as well.
Thompson and others solicited millions of dollars from 90 other investors, including a number of seniors, promising healthy returns with almost no risk.
But Thompson and business partner David Condie took considerable risks, the SEC alleges, sinking millions into a subprime lender whose stock tanked in March 2007. Between July 31 and Aug. 17, the funds' assets plummeted from $54 million to $200,000.
However, before the funds collapsed, Condie moved $3 million out of the fund to Morley to make up for losses Morley suffered, the SEC said. The agency described Condie as a distant relative of and "purportedly one of Michael Morley's attorneys." A total of $2 million ended up in Willowbend, a 109-acre development in Vernal where Morley has an interest.
The company called the transfers to Morley a "loan," but there were no loan documents and the SEC said Morley has been "unjustly enriched" and should repay the money.
The question Williams is trying to ask county delegates is if they want their party to be presented by a guy who is allegedly took millions of dollars from little old ladies for himself when his investment scheme went south. Of course, the irony is that, thanks to press coverage, the delegates will be taking about it more than they would had Williams brought it up himself and had Chairwoman Marian Monnahan not forbade any reference to the matter.