The company, Compressus Inc., of Washington, D.C., also put Burns' daughter, Keely Burns, on its board of advisers for a year beginning in May 2003, although she was not compensated for her involvement.
But Burns spokesman James Pendleton said the senator didn't know that some of the money initially earmarked for UM was bound for Compressus. Burns earlier said he had concerns about how the money was spent.
The situation dates to the late 1990s, when some University of Montana officials were eager to bring federal space research money and jobs to the university and Montana. UM officials lobbied Burns to secure federal money and created the UM Northern Rockies Center for Space Privatization after Burns secured almost $3 million for the effort.
The Inland Northwest Space Alliance, or INSA, spun out of the university's space privatization center in 2003, taking with it just under $1 million of the money Burns secured for the university.
Because INSA was organized as a private, for-profit company in 2003, information about where the group got its money and how it was spent is not public.
However, in 2004, INSA converted to a nonprofit and was required to make public certain financial details through its federal tax filings. Those records show that the single biggest payment INSA made that year was $270,760 to Compressus for something called “project management.”
Compressus is a software company that sells, among other things, a kind of software that enables doctors to send digital pictures like X-rays or scans clearly over less-advanced Internet connections.
In 2002, Compressus hired Burns' former chief of staff, Leo Giacometto, as a senior vice president and registered him as one of its lobbyists. At the same time, Giacometto was running his own lobbying house, now called Gage, although he continued to list Compressus' address as that of his own firm on federal lobbying records until 2005.
In 2004, Compressus paid Giacometto's firm $220,000 in lobbying fees, Senate records show. Also in 2004, INSA hired Giacometto as its lobbyist, paying his firm $20,000 in fees, Senate records show.
That same year, INSA gave Compressus the $270,000 no-bid contract.
Exactly what Compressus did for the money is unclear. Larry Mortensen, the business manager for INSA, said he could not release the list of services Compressus promised to do for the money because it was part of a proprietary contract.
George Bailey, a former UM official who quit to lead INSA, said Compressus did a number of things for the space startup. The company hired an employee to work in INSA's Philipsburg office and hired INSA's Missoula-based information technology employee.
Bailey said Compressus also worked with INSA to test medical devices.
It is unclear exactly when Giacometto left Compressus to form his own lobbying firm - a firm that counted Compressus as a client in 2004. Compressus' own records list Giacometto as an in-house lobbyist for the first half of 2004.
Giacometto did not respond to questions for this story.
Burns played an important role in getting UM's space privatization efforts, including INSA, off the ground. Between 2003 and 2004, Burns secured roughly $3 million for UM space efforts in the funding bill that included the budget for NASA. INSA received $1.38 million of that, according to UM officials.
Burns also helped secure another $750,000 in 2004 for UM's ongoing space research, and later set aside another $3 million specifically for INSA.
Burns, who has long pushed to expand Montana's technology economy, earlier told the Missoulian that he was glad to earmark federal space research dollars for Montana. Although he helped snag the money, Burns said oversight of the dollars was the responsibility of UM and NASA.
Last week, spokesman Pendleton said Burns did not know that any of the money the senator earmarked would end up with Compressus.
“If the money wasn't used in the way it was requested and intended, those responsible should be held accountable,” Pendleton said.
Asked about the appropriateness of Compressus getting a no-bid INSA contract, Pendleton said any private company “has the right to hire whoever they want.”
But Pendleton said the senator “expects those taxpayer dollars to be used in the way they were intended.”
UM and INSA officials reached out to at least two people with close ties to Burns in the early 2000s, asking them to be involved in UM's space privatization efforts. However, it appears neither person played much of role, in any, in the process.
Bailey invited Mark Baker, a former Burns top aide and state co-chairman of Burns' 2000 re-election campaign, to serve on the board of UM's Northern Rockies Center for Space Privatization, Baker said. Later, Baker received a similar invitation from Wes Snyder, a UM official.
Baker said he never formally responded to either invitation, never participated in any activities of the board and did not consider himself a board member.
Nonetheless, an INSA publication from August of 2004 lists Baker as a board member.
Burns' daughter, Keely Burns, was also invited onto the board. Keely Burns did attend the one organizational meeting the board held in May of 2004, but she said in a statement to Lee Newspapers that she was never again involved with the group and received no compensation for her one-time involvement.
“I did not realize I was listed on the board of directors and never agreed to serve in that capacity,” Keely Burns wrote.
Burns is a family doctor in North Carolina. She also served on the Compressus board of advisers for a year. She had a contract with the company that promised her stock options, but did not exercise the options in the time allowed for doing so. She was never compensated for her time with the company.
Another man, Missoula entrepreneur Russ Fletcher, who was also at the May 2004 meeting and had no connections to Burns, said his experience with the group was similar to that of Keely Burns. Fletcher, who is also listed as a board member in the INSA publication, said he didn't realize he was on the board, either.
“I was never contacted after that meeting,” Fletcher said.
Last week, Mortensen said that despite the fact that Giacometto registered and reported lobbying income from INSA in 2004, the one-time Compressus vice president didn't actually work as INSA's lobbyist.
Giacometto filed the forms “incorrectly,” Mortensen said. “We did not pay them to lobby for us.”
Mortensen said Giacometto was actually hired as a consultant, not a lobbyist. Mortensen also said that INSA didn't pay Giacometto's firm the $20,000 he reported to the U.S. Senate.
Mortensen would not say exactly how much INSA paid Giacometto for consulting or which federal dollars INSA used to pay him.
“It's not relevant,” Mortensen said. “It's part of contract documents that are not public information.”
Mortensen said he learned last year that Giacometto was registered to lobby for INSA in 2004. He said he's been working with Gage for several months to change Giacometto's 2004 lobby filings.
Mortensen said INSA didn't open up the Compressus contract to competitive bidding because the company was envisioned as part of INSA's NASA-related work from the very beginning. NASA signed off on Compressus' involvement, he said.
“They were proposed to do specific work for NASA,” Mortensen said. “They had the skill sets that we required to perform the work that was proposed to NASA.”
All the money that went to Compressus came from the NASA money earmarked by Burns, he said.
Giacometto's firm is also listed as INSA's lobbyist in 2005, according to U.S. Senate records. Mortensen said Giacometto did act as a lobbyist that year.
|
 |
 |
Add your comment now! Write your comment in the form below.
(Email address is for verification only. If you'd like to email a story, look for the link above)