Audit: Ex-Utah AG Reyes ‘leveraged his position’ to promote Operation Underground Railroad

Utah Attorney General Sean Reyes is pictured on the first day of the legislative session at the Capitol in Salt Lake City on Tuesday, Jan. 16, 2024. (Photo by Spenser Heaps for Utah News Dispatch)

This story has been updated.

A new blistering audit report says former Utah Attorney General Sean Reyes “resisted turning over full information” to legislative auditors tasked with investigating his daily activities, travel records and involvement with outside organizations like the embattled anti-trafficking nonprofit Operation Underground Railroad. 

That led legislative auditors to come to “limited” conclusions, according to a report released Friday. But they still asserted there’s a perceived “conflict of interest due to the lack of transparency.” 

They also raised concerns that it’s possible the former AG could have “improperly claimed” attorney-client privilege as a “tool to avoid transparency.” Auditors wrote that when they compared “redacted information provided by the AG to the unredacted information we obtained, it did not appear to contain this type of confidential material.” 

“Rather, most of the redacted information displayed the AG’s involvement in outside entities, time spent at a private barber shop, or out-of-state travel for AG associations,” auditors wrote. “This is concerning, as attorney-client privilege power could be improperly claimed in situations to diminish transparency rather than having a legitimate legal concern.” 

As a result, auditors wrote they “cannot guarantee that the AG did not withhold other questionable information by claiming attorney-client privilege.”

“It does not appear to us that this information is privileged,” auditors added. “Nevertheless, if it was privileged, waiving the privilege for us to conduct a complete audit would, in our opinion, allow for more informed audit conclusions and recommendations to improve governance, accountability, and ultimately the efficient and effective use of taxpayer funds.”

“While we found that there was some involvement by the AG in (Operation Underground Railroad) and other nonprofits, we are unable to determine the full extent of the involvement due to a lack of transparency from the AG,” auditors wrote in the report.

For House Speaker Mike Schultz, R-Hooper, that’s one of the more concerning findings from the report. Schultz sits on the Legislative Audit Subcommittee, and as the audit was unveiled Friday afternoon, he said exaggerating attorney-client privilege to hide information from auditors is an increasing problem in the state.

“We’re seeing more and more of that with agencies, and I’m really disappointed to see that,” he said Friday. “The concern to me is, how do we move forward with this type of thing? Again, this is a constitutional prerogative and requirement of the Legislature.”

While auditors said they received “some information” from Reyes, through their investigation “we were able to determine that much of the AG’s involvement with nonprofits was withheld.”  

“Therefore, our conclusions are limited to the information we have,” auditors wrote. “Even so, we found that the AG appeared to leverage the authority of the position to support some nonprofit organizations such as OUR. Due to the AG’s oversight authority over nonprofits, this type of involvement could be perceived as a conflict of interest.” 

For example, auditors wrote that they found Reyes “held back information” from them that detailed the following: 

• Meetings with Operation Underground Railroad’s Board of Governors
• Events that included Reyes and Tim Ballard, the founder and director of OUR
• Meetings with Reyes and OUR staff to review OUR operations

“We did not find evidence that state resources were used for the AG’s participation in the activities with OUR,” auditors noted. “Even so, evidence suggests that the AG maintained significant involvement with OUR and leveraged his position to promote the organization.”

Auditors raised concerns that “insufficient transparency” has resulted in “lack of accountability” for the position. 

“The AG has not been transparent with the public. The AG has also not been transparent with us when asked to examine the governance of the office,” auditors wrote. “We question who provides oversight and accountability over the AG if both the electorate and the Legislature are not provided with transparency into the activities of the position.” 

Auditors also concluded, based on an “office-wide culture survey,” that Reyes’ involvement in the office’s divisions “appears limited.” That survey found a clear majority — 62% — of the office’s respondents “disagreed or strongly disagreed that the AG is involved in the operations of their division.” Additionally, the audit found that Reyes often missed monthly division directors’ meetings, and that he only began attending them after lawmakers called for the audit.

“An analysis of attendance at these meetings over the past 2.5 years shows that the AG was often not present,” auditors wrote. “The AG only began attending these meetings after the audit was prioritized.”

Utah’s new Attorney General, Derek Brown, didn’t say whether or not any of the findings in the audit warrant further investigation by his office, instead pointing to a second audit, also released on Friday, that investigated the functions and efficiency of the entire attorney general’s office.

“On the actual office itself, there’s a lot of things we’re looking at,” Brown said.

The audit report comes after a group of lawmakers in November 2023 expressed concerns about “the governance and oversight” of the attorney general’s office and asked legislative auditors to evaluate the office’s “efficiencies and effectiveness.” They also asked auditors to investigate to what extent Reyes was involved with Operation Underground Railroad and whether it “impacted the impartiality” of Reyes’ office. 

Operation Underground Railroad made its name as an anti-sex trafficking campaign, known for its elaborate undercover sting operations in Latin America where it documented rescuing women and children. Reyes participated in several of those missions.

Ballard and his operations were portrayed in the high-grossing film “Sound of Freedom.” However, the group has faced criticism for its methods and has been accused of exaggerating its success. Ballard and the organization broke ties in 2023.

Concerns surfaced after Reyes faced questions over his past relationship with OUR’s founder, Ballard, who  has been embroiled in controversy amid a flurry of lawsuits accusing various forms of wrongdoing. Several have since been dismissed, but some are ongoing. 

That includes a federal lawsuit filed in October, accusing Ballard of sex trafficking and alleging he coerced and manipulated women into situations where Ballard could sexually exploit them, The Salt Lake Tribune reported. Ballard’s attorney told the outlet he denies the allegations and characterized the suit as just the latest in a string of frivolous allegations unsupported by facts.

A different lawsuit filed in November 2023 initially accused Reyes of acting as the “de facto general counsel” for Operation Underground Railroad, claiming he forwarded complaints he received about the organization to Ballard using his personal email. 

At the time, the Utah Attorney General’s Office issued a prepared statement saying Reyes “sent a single text and made a few phone calls seeking to find common ground between two (nonprofits),” KSL.com reported. “He regrets if his communication was viewed in any other way and contributed to a feeling of undue pressure. He trusts the impartial court process to prove his motives and actions were appropriate and legal.” 

In December, the plaintiff amended that lawsuit to dismiss Reyes after she and the attorney general met, and he apologized. That month, when Reyes announced he would not be seeking re-election, he said he believes the women who have accused Ballard of assault and abuse.

“I apologized to each of them that my past friendship with Tim Ballard and strong association with OUR contributed to an environment that made them feel powerless and without a voice to fight back for many years,” Reyes said in a video explaining his decision not to seek re-election.

In the following months, as lawmakers waited for the results of the audit of Reyes and his office, the 2024 Utah Legislature passed and Gov. Spencer Cox signed a bill, HB380, that prohibits the Utah attorney general from engaging in any outside legal work. 

Now that the audit has been completed, it’s possible lawmakers could consider additional legislation to place more restrictions around the Utah Attorney General’s Office. 

Auditors in their report released Friday recommended the Legislature consider placing additional “guardrails” around the position and specify a more “defined role” for the AG. 

“While common law power grants the AG extensive authority to take action to further the interests of the state, it also allows broad individual discretion,” auditors wrote. “As such, the Legislature could consider placing statutory guardrails around the individual discretion of the attorney general.”

That could include strengthening “ethical requirements” for the attorney general in law, auditors wrote, which they said could “reduce the perception of conflicts of interest.” Lawmakers could also consider requiring additional reports from the office in order to improve transparency. 

Utah’s new AG Derek Brown responds: No legislation needed ‘at this time’

In a response to the audit, the state’s newly elected attorney general, Derek Brown — who succeeded Reyes after the former AG did not run for reelection — said he has already taken steps to address concerns from the previous administration. 

Brown campaigned on increasing transparency and restoring trust to the office, two issues the audit highlighted.

To that end, Brown solicited help from about 40 subject experts during his transition, who formed 11 committees to look at everything from the office’s culture and ethics, to how it approaches civil and criminal appeals.

Brown stepped down from all nonprofit boards he sat on — Reyes’ involvement, and lack of transparency, with nonprofits was also a major problem highlighted by the audit.

“I’ve done that specifically to avoid any potential conflicts,” Brown said.

Brown’s office is also releasing his weekly calendar, something Reyes refused to do.

“And finally, the structure of the office that was referenced in the audit no longer exists,” Brown said on Friday. That includes changes to some of the office’s divisions, moving staff around and creating a Department of Consumer Protection to handle things like data privacy and consumer protection.

To auditors’ recommendation that the attorney general “establish best practices on internal governance and transparency to better manage the organization’s operations,” Brown wrote in a statement after the audit was released: 

• “Upon assuming office, I immediately initiated measures to enhance transparency within the Office of the Attorney General. I restructured the Office to strengthen internal governance and reduce governance uncertainty. Furthermore, the Office is researching and identifying the best internal governance practices nationwide for attorney general offices and law firms.” 

Auditors also recommended that the Legislature consider legislation “to limit involvement or require more transparency into the attorney general’s involvement with nonprofits or other organizational boards to reduce the potential conflicts of interest and safeguard the oversight power of the Office of the Attorney General.” In response, Brown wrote: 

• “I understand that this serves as a recommendation for the Legislature. However, I intentionally resigned from any governing positions on nonprofit boards and other organizations before taking office. This decision was made to minimize potential conflicts of interest and protect the Office’s oversight authority. I believe my actions have effectively addressed these concerns, making additional legislation unnecessary at this time.”

In response to a third recommendation that the Legislature consider “if additional ethical and transparency requirements should be placed on the position of attorney general,” Brown wrote:

• “While I understand that this is a recommendation for the Legislature, upon taking office, I proposed the creation of an advisory ethics committee, as suggested by my transition committee. This committee would help me proactively identify situations that could pose ethical risks, enabling me to minimize potential conflicts of interest. I believe my actions effectively address this concern without the need for additional legislation at this time.”

However, Brown ultimately acknowledged it’s up to lawmakers to decide whether there’s a legislative solution to some of the problems highlighted in the audit. Both Senate Minority Leader Luz Escamilla, D-Salt Lake City, and Rep. Ken Ivory, R-West Jordan, hinted at passing legislation in response to the audit.

Ivory said he was excited to hear about the steps Brown is taking — but he also told the committee Friday that he wants to work on institutionalizing some of those changes.

“I’d love to work with you on the types of things that you’ve laid out,” Ivory said. “So that anyone that occupies that office will have the gold standard that you mentioned, and it’s not an issue of the person or the personality, it’s the standard.”

Read the entire audit report on the attorney general position below. 

Auditors on Friday also released a separate audit that reviewed the policies, practices and decision-making of the attorney general’s office. That audit offered recommendations for the office to develop a plan that would set a clear direction for the organization, set performance measures, and create a position for a “performance manager.”

2025-01 Position of the AG