HELENA — Legislative auditors submitted a report Friday, stating that a review of Sen. Jason Ellsworth’s handling of a state contract had identified “abuse” and “waste of state resources.” It’s the latest in a growing controversy that has surrounded Ellsworth, R-Hamilton, the former Montana Senate president.
Ellsworth has argued the issue is a “political ploy,” and his attorney said Friday that the auditor’s findings are “grounded in pure speculation and blatant conjecture.”
Last week, Lee Newspapers’ Montana State News Bureau reported that Ellsworth had approved a $170,000 contract with a former business associate just before the end of the year, and that incoming Senate leadership had not been aware of the contract. In the days after, Senate President Sen. Matt Regier, R-Kalispell, told reporters the issue had been referred to the “Fraud Hotline,” under the Legislative Audit Division, which reviews allegations of fraud, waste and abuse in state government.
On Friday, Legislative Auditor Angus Maciver sent a letter to Regier and the Senate majority and minority leaders, saying his office had “substantiated these allegations as instances of abuse and waste.” He attached a six-page memorandum from Audit Division legal counsel, which said the division shifted their focus from the relationship between the parties in the contract to “whether the methodology used and the contracts themselves violated state procurement laws and regulations.”
Ellsworth was Senate president during the 2023 legislative session and the 2023-24 interim. During that time, he formed and chaired the Senate Select Committee on Judicial Oversight and Reform, in response to a series of court rulings he said had undermined the Legislature’s authority. That committee eventually proposed 27 bills to overhaul the judiciary – a suite of legislation that’s become a priority for Republican legislative leaders this session.
The contract Ellsworth signed off on called for a company, run by a Stevensville man, to conduct an analysis of the outcomes from these bills, after the session ends.
According to the Audit Division’s report, Gov. Greg Gianforte’s office provided $500,000 to fund special committees during the interim, including this one. At the end of 2024, any unused money was set to return to the governor’s office.
The report says, on Dec. 26, Ellsworth presented legislative staff with two initial contracts, signed by himself and the contractor. Each covered post-session analysis on about half of the judiciary bills – one for about $88,000 and the other for about $82,000.
Auditors said the contracts were otherwise identical, and that “[t]here was and is no logical reason” for them to be split except that it kept them below $100,000 – the maximum value for which the Legislative Services Division could approve a contract without getting oversight from the Montana Department of Administration. They said the contracts had been “artificially divided,” and that that was an abuse of Ellsworth’s position as Senate president.
According to the report, staff eventually determined the two contracts needed to be combined into one and worked on getting it approved as a “sole source” contract that didn’t go through a full competitive bidding process. It says that type of contract would normally need to be posted for public notice, but that Department of Administration staff they treated this case as an “exigent circumstance,” because the funding from the governor’s office was set to expire within days.
In the report, auditors said that the situation didn’t meet the legal definition of an “exigent circumstance,” so the handling of the contract had “deprived the state of the financial benefits of open competition in procurement” and was a waste of state resources.
In the days before the Audit Division report was released, Ellsworth defended his actions, telling reporters that he had reached out to multiple people to find the lowest price for doing the work, that the contract had been fully vetted and that he didn’t regret his decision. However, he also said the issue had become a distraction. He said Monday that he had spoken with the contractor and they had agreed to ask that the contract be terminated.
Ellsworth put out a statement, saying he wanted the decision to “end the manufactured controversy.” He also argued the attention on the contract stemmed from political motives. Ellsworth was one of nine Republicans who broke with Regier and the rest of their party’s leadership in the first week of the session, joining Democrats in voting to change committee memberships. He accused GOP leaders of not being fair or transparent in making committee assignments.
On Friday, Joan Mell, an attorney representing Ellsworth, said the audit report comprised “hastily published ‘findings’” and that Ellsworth hadn’t received due process or a meaningful opportunity to respond. She also argued it was linked to political motives.
“Senate Leadership want Ellsworth out of power because he has stymied measures from the extreme right through his responsible leadership from the floor on issues of major importance to Montanans like tax reform, Medicaid continuation, judicial standards, and appropriate education funding,” Mell said in a statement to MTN. “Fundamental principles of fairness warrant a new independent unbiased audit with appropriate representation that meets audit standards.”
Earlier this week, Senate Minority Leader Sen. Pat Flowers, D-Belgrade, had said he would wait for the audit report before weighing in on this situation. After the report came out Friday, Senate Democrats circulated a statement from Flowers.
“We take any waste or abuse of taxpayer dollars very seriously,” he said. “Furthermore, it is our responsibility to hold our colleagues accountable for their actions. It is clear that Senator Ellsworth’s conduct fell below the high standards Montanans expect from their elected representatives. This matter should be referred to the Senate Ethics Committee for further review and an appropriate resolution.”
Regier, who defeated Ellsworth for the Senate presidency in November, had called the issue “concerning” in previous discussions with reporters, but he also said he wanted to wait for the report before deciding how to move forward.
“I’m reviewing the Legislative Auditor’s initial report in detail and I’m glad to see the Senate Minority finally expressing concern over the situation,” said Regier. “I plan to speak more on this highly concerning issue on Monday.”
