Republican Culture of Corruption in Montana - INSA

Anything involving Leo Giacometto is probably crooked, so it is not surprising to see the latest news from Big Sky Country:

A legislative audit report released this week concludes that several former University of Montana employees may have violated state ethics codes in their employment and involvement with UM's now controversial space privitization programs. The investigation also concluded that the University of Montana failed to adequately oversee the formation, federal funding and operations of the programs.

The possible "conflicts of interest" the audit refers to involve Llyod Chesnut, former Vice President of Research and Development, his assistant George Bailey and his wife Rollene. Chesnut, who is also under investigation in Texas for work he did at the University of North Texas, was instrumental in the development of the Inland Northwest Space Alliance -- a non-profit built with federal money that came through his university office. Shortly after leaving UM in 2003, Chesnut recieved payments of $15,000 as the president of the alliance, partially while he was in Texas. Rollene served as INSA's business manager -- even after the couple moved to Texas, earning $104,000 from the alliance until 2005. Bailey, who helped Chesnut in securing funding for INSA currently serves as the non-profit's executive director.

You could find out more at the INSA Website, but it was scrubbed after Left in the West began sniffing around and they blocked the Way Back Machine, too. So back to the story for what INSA was about.

The audit, which is scheduled to be officially released June 20th, says the Legislative Audit Division has made referrals involving possible violations by the former vice president and former assistant vice president to both the Attorney General and the Commissioner of Political Practices. "These referrals cite potential violations of the sections of the ethics code addressing cooling off periods for state employees and nepotism," the audit says.

INSA, developed with federal money, some secured by Sen. Conrad Burns, is under the umbrella of UM's Northern Rockies Consortium for Space Privitization. Both were billed as attempts to bring space research and jobs to Montana, but were thrown into the spotlight earlier this year when the Board of Regents began questioning what the two programs had to show for the millions of dollars they had spent. The Comissioner of Higher Education's office requested the legislative audit and later, news broke that the FBI and NASA were also investigating possible ethics violations.

This is bad news for the re-election campaign of Senator Conrad Burns:

Questions about INSA's lobbying efforts were also raised by the audit. As the audit notes, INSA paid a Washington D.C. firm (later identified in various news reports as the firm of former Burns Chief of Staff Leo Giacometto) for lobbying services in 2004, but never reported that activity to UM relative to the federal grant. Federal law regulates and restricts lobbying activities for recipients of federal funding. The audit recommended that in the future, UM require disclosure of lobbying efforts by sub-contractors that cost more than $100,000.

One more thing the audit found is that INSA hired a D.C. technology firm for some work assigned to the organization without authorization from the university. In total, the audit showed more than $1.8 million paid to subcontractors. Auditors recommended that the university take steps to ensure subcontracts paid through university funded be pre-approved. It also recommended that any consulting be pre-approved ($47,000 of INSA's budget was for consulting) and ensure that a competitive bidding process and other proper procedures with nongovernmental entities took place.??

As Jennifer McKee and Betsy Cohen reported in the Missoulian last month, INSA gave a no-bid contract for $270,000 in 2004 to Compressus Inc., a D.C. company that employed Giacometto and had Burns' daughter, Keeley, on its board of advisers.

And this could hurt Montana Congressman Dennis Rehberg, considering that he is Giacometto's best friend and his Chief of Staff's wife was in on the payola:

In 2004, the INSA listed Conrad Burns' daughter, Keely Burns, as a member of its advisory board. Burns' then campaign chairman, Mark Baker, was also listed on the advisory board that same year. The wife of Rehberg's chief of staff Erik Iverson was also listed as an associate on the INSA's web site as an associate until February, when her name no longer appeared.

Amy Jo Fisher, the INSA's government relations and outreach coordinator, worked in Burn's office for more than 10 years, both in Montana and Washington, D.C.

Leo Giacometto, former chief of staff for Conrad Burns, is a registered lobbyist for the INSA. Giacometto donated thousands of dollars to Burn's campaign fund this election cycle, as well as making smaller donations to the Rehberg campaign.

The president of the INSA, George Bailey, donated thousands of dollars to the Burns campaign, as well as the Rehberg campaign. Bailey, who also serves on the Board of Directors of the US-Asia Network, the non-profit organization Burns started with Giocometto, has denied any wrongdoing, and said that he supports all of Montana's representatives in Washington.

At this point, there are a lot more questions than answers.