HELENA - A state lawmaker carved money out of last year's stimulus spending bill for an energy study shortly before investing in a company to help get that money, according to newly released documents.
Rep. Llew Jones of Conrad used his position on the House Appropriations Committee last March to propose an amendment to carve out $475,000 for a biomass energy study. E-mails obtained by The Associated Press show that Jones was also actively contemplating starting a company to get that money.
Jones defended the arrangement, saying he never used any influence to make sure the state granted the money to the company he was involved with. He said Porter Bench Energy won the grant on its merits in a competitive bid run by the Department of Commerce.
"I am not sure that Commerce was even aware that I was involved, because I thought if they were aware, that could be used as leverage. Either it was scored up or it wasn't, and that's what was done," Jones said.
Jones asked the state's ethics chief in early May of last year if there would be anything wrong with him helping launch a company that would seek a state contract for a biomass energy study, according to e-mails. The commissioner of political practices declined to rule on the issue, and forwarded him to the legislative staff attorney - who told him it would probably be legal.
Less than two weeks later - and shortly after the $900 million stimulus spending bill became law - documents from the secretary of state's office show that Jones' wife Carole Jones organized Porter Bench Biomass LLC.
A different company also organized by Carole Jones the previous year - Porter Bench Energy LLC - ended up being the firm to seek the grant.
Jones said Porter Bench does not expect to profit from the grant, and said he did not bill any hours or make money on the project. He said his role is only as an investor.
"What Porter Bench Energy will get out of it is a very credible study that will show it is a very, very capable young company," Jones said.
In the e-mails to the commissioner of political practices and Petesch, it's clear Jones envisioned starting a company right away to get the grant.
The e-mails show that in the middle of May, as the governor was signing the legislation and two weeks before organization papers launching Porter Bench Biomass were filed, Jones was contemplating getting the grant. Jones sought assurance it wouldn't be an ethical problem.
"My concern was becoming part of a company that would be applying for and working with Commerce grants, etc., over the next two years as I was a member of appropriations that had put the money into Commerce's programs," Jones wrote. "Is there an issue becoming part of a company that may apply for grants/assistance from state gov. agencies?"
The deal has its critics - even though the arrangement does not appear to run afoul of state ethics rules or laws since the contract went through a competitive bid process.
House Republican Leader Scott Sales, who just learned of the arrangement this week from a reporter, said it "just stinks to high heaven."
Sales has been critical of Jones, a fellow Republican, in the past because Jones has split with conservatives and brokered budget deals with Democrats and the administration of Gov. Brian Schweitzer.
Sales said legislation is needed next session to ban sitting lawmakers from putting money into bills that end up going to their companies, even if the state awards the funds through a competitive bid process.
"He did this all the way along knowing this money was going to be available. His fingertips are all over this thing," he said. "It may not be illegal right now, but it sure stinks."
That stimulus bill, House Bill 645, funneled federal stimulus money, or state funds freed up by federal stimulus money, to a long list of projects around Montana. Most of them carried price tags far higher than a $475,000 biomass study that garnered very little attention while lawmakers debated the bill.
Porter Bench ended up getting $300,000 for its biomass study. NorthWestern Energy, which will also present Thursday to Vincent's committee, received the rest for its own study.
The Energy Division at the state Department of Commerce ended up receiving applications from eight companies for the money early last summer.
Program manager Tom Kaiserski said that they did not know of Jones' involvement with Porter Bench at the time, and he believes that all the companies were scored on the merits of the project by him and one other official at Commerce.
"It's hard to say what we would have done had we known that," he said Wednesday.
Sometime later, the agency noticed that documents for the company were going to the same mailing address on file for Jones. But he said the company seems to be doing a good job with the study, which is expected later this month.
"We scored what we thought were the top proposals," he said.
Another lawmaker - who works for a firm that ended up being a subcontractor on the grant - defended the whole deal.
Rep. Chas Vincent, who works as a consultant for Environomics, also chairs the Environmental Quality Council - which is holding hearings Thursday to hear presentations from Porter Bench on the findings. The Republican said Jones didn't do anything dishonest.
"I think his intentions were honorable, and I know he did not abuse any of the tax dollars, or the grant," Vincent said.