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HELENA - State lawyers are looking into the practices of Custer Country Montana Inc., the tourism promotion group that includes Billings and Yellowstone County, after receiving a complaint about the way the tax-funded nonprofit group conducts business.

Betsy Baumgart, state tourism administrator, which coordinates the six, nonprofit tourism promotion corporations in Montana, confirmed Wednesday her office had received a complaint about Custer Country and referred the matter to a Justice Department lawyer, who is reviewing it.

"All the documents are with them," she said.

Baumgart would not say what the substance of the complaint was or who filed it. The Commerce Department would not make the complaint public.

Katherine Orr, the Justice Department attorney, confirmed she is looking at the complaint.

Custer Country and Montana's five other regional promotion groups receive a portion of the tax levied on hotels and motels, Baumgart said. Each district receives an amount in proportion to the amount of bed tax dollars collected there. The money is to be spent promoting tourism in that district.

Custer Country gets about $400,000 a year, with most of that collected in Billings.

The group has an executive director, Jim Schaefer, and an office in Forsyth. The group is also governed by a board of directors, as all nonprofit corporations are required to have.

Although exactly what is behind the complaint was unknown Wednesday, letters from the Billings Chamber of Commerce and the Billings Tourism Improvement District to Schaefer suggest Billings leaders are concerned Custer Country leaders are not cooperating with the state's probe.

"We believe it is best to simply comply with legal obligations," reads a March 16 letter from the members of the Billings Tourism Improvement District to Schaefer and Renee Christiansen, the president of the Custer Country board of directors.

The president and board chairman of the Billings Chamber of Commerce and Convention and Visitors Bureau wrote a similar letter to Schaefer and Christiansen on March 2.

"The lack of full disclosure and the lack of complete and total cooperation on behalf of Custer Country ... create the perception that the corporation may have information which would be damaging," the letter reads. "This is potentially damaging to all of Custer Country's members."

Christiansen, who owns a Billings-based adventure planning business, requested that questions for this story be sent to her by e-mail. She did not respond to that e-mail Wednesday.

Schaefer said the dispute centers around a $29,000 contract to produce the 2010 Custer Country vacation guide, which was awarded to the Laurel Outlook newspaper and has already been fulfilled. He said some raised concerns the request for proposal for that contract was not adequately advertised.

"We're under the impression we did what we had to do to publicize it," he said.

Beyond that, Schaefer said he wasn't "entirely sure" what the concern over Custer Country is about.

Chris Johnson, general manager of the Crowne Plaza Hotel in Billings and president of the Billings Tourism Promotion District who sent one of the letters, said the flap is a distraction from the Custer Country mission: To promote tourism the region.

"What is allegedly transpiring is damaging to tourism in Billings and to Custer Country," he said.

Missoulian State Bureau reporter Jennifer McKee can be reached at 1-800-525-4920 or at


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