From the archives

by Jim Larson
used by Permission

Editors note: This story first appeared in the Billings Outpost in 2005. 

In a letter to Congress, the Texas Democrats have accused former Montana Gov. Marc Racicot of illegal fund-raising, money laundering and endangering a Houston neighborhood.

No proof accompanied their accusations.

Party Chairman Charles Soechting sent the letter to the House Ethics Committee in July. He accused Mr. Racicot of putting together the alleged money-laundering scheme that has embroiled Speaker of the House Tom Delay’s Texans for a Republican Majority in scandal. The letter also accused Mr. Racicot of raising illegal corporate money for TRMPAC and of using his influence to obtain a right of way for a train that would carry toxic chemicals through Mr. Delay’s district.

At the time the committee was investigating Mr. Delay for possible ethics violations.

In September, a Travis County Texas grand jury investigation into alleged campaign finance violations produced criminal indictments of three TRMPAC officials and eight corporations. One of those indicted was Jim Ellis, TRMPAC founder and Tom Delay staff member.

Mr. Ellis was accused of delivering illegal corporate contributions in the form of a TRMPAC check for $190,000 to the Republican National State Elections Committee, the nonfederal arm of the Republican National Committee. The indictment said that a list of candidates for the Texas House of Representatives accompanied the check.

The note suggested that the RNSEC make donations to those candidates, and amounts were recommended as well. A century-old Texas law forbids the use of corporate funds in political campaigns except for strictly administrative purposes.

The money and list went to the RNSEC in September. In October, checks totaling $190,000 were sent to the candidates on the list, the indictment said. Letters from Mr. Racicot, who was then chairman of the RNC, accompanied those checks, according to Kelly Fero, a Texas Democratic strategist. The RNC and TRMPAC told national news outlets that the identical sums were a coincidence.

Asked by Mr. Racicot to comment on his behalf for this story, RNC counselor Tom Josefiak confirmed that Mr. Racicot would have signed the letters.

All letters accompanying checks to candidates would have been signed by Chairman Racicot if he was “around at the time,” according to the prominent GOP lawyer. “Bringing the governor into this was absurd.”

He added that the RNC was careful to follow federal and state campaign laws, and he noted that Mr. Racicot was particularly conscientious about the handling of campaign funds. Referring to the Texas Democrats’ charge that Mr. Racicot planned the alleged TRMPAC money-laundering scheme, Mr. Josefiak said, “He wouldn’t stand for it.”

Accusing Mr. Racicot of campaign finance violations in a letter to the House Ethics Committee was absurd as well, Mr. Josefiak said. The committee had no jurisdiction over such matters, and the Texas Democrats knew it. The letter was simply a political ploy designed to take the public’s focus off the Republican agenda. Mr. Racicot’s integrity was above reproach, and it was an honor to work with him, the counselor said.

Mr. Josefiak served as general counsel for the 2004 Bush-Cheney campaign. Mr. Racicot served as its chairman.

Mr. Josefiak did note that it was unusual for groups and political action committees to give to the RNC, but said that great care would have been taken to put the money into the appropriate accounts. All restrictions imposed by state law would have been honored, he said.

Yet in his letter to the House Ethics Committee, Mr. Soechting wrote that Mr. Racicot attended a meeting on Oct. 3, 2002, where the circumvention of Texas law was a topic.

“Mr. Racicot presided over an RNC finance meeting in Fayetteville, Arkansas, where the $190,000 money-laundering scheme was discussed,” he wrote.

While Mr. Soechting’s letter offered no proof to back his assertions, strategist Fero sent the Outpost a copy of Mr. Racicot’s travel schedule for a fund-raising trip the RNC chairman made Oct. 2-4. The itinerary showed “RNC Finance meetings in Fayetteville” scheduled for the morning of Oct. 3, but no mention was made of the content of those meetings.

The itinerary was one of what Mr. Fero called a “treasure trove” of documents that became available when a civil action was filed in Austin against TRMPAC treasurer Bill Ceverha. According to Mr. Fero, the substance of the Fayetteville meeting referred to by Mr. Soechting was described in a deposition taken from a person who attended the meeting. That document was a product of the civil suit as well, said Mr. Fero. The Outpost has not yet obtained a copy of the deposition.

After the Fayetteville meetings, Mr. Racicot traveled to Houston. That evening he attended a fund-raising dinner that the itinerary described as “Dinner FR for Tom Delay’s PAC.”

According to RNC counsel Josefiak, the chairman did not attend any PAC fund-raisers, but only events for individual local candidates. Mr. Josefiak said he was familiar with the itinerary and said that Mr. Racicot had not put it out.

Mr. Racicot’s contact person for the Houston leg of his trip, however, was Susan Lilly, who, according to her website, was a fund-raising consultant for TRMPAC.

Mr. Fero called Ms. Lilly TRMPAC’s chief fund-raiser. When asked to comment on the Democrats’ accusations and TRMPAC’s motive for sending $190,000 to the RNC, she wrote that she was unable to reply because she “had nothing to do with how the money was spent or where it went once it was received.”

Some of the money was spent to pay Ms. Lilly. She received $28,500 to raise funds for TRMPAC, and every penny was corporate money, the Texas Observer said. While vague on many aspects of campaign finance, Texas law clearly forbids the use of corporate cash for political fund-raising.

And no tale of the West would be complete without the mention of a railroad.

In his letter to Congress, Mr. Soechting wrote, “It is especially disturbing that Mr. Racicot is currently helping a company on whose board he serves to push a toxic railway line through the heart of Rep. Delay’s congressional district.”

Mr. Soechting’s accusation was strong and clear but based on a loose collection of circumstances. The Burlington Northern Santa Fe wanted to build a controversial railway through the Clear Lake area in Mr. Delay’s district, the Houston Chronicle reported. Mr. Racicot has been on the railway’s board of directors since 2001, the BNSF website said.

In addition, Mr. Soechting reported that BNSF donated $26,000 in 2001 and $25,000 in 2003 to TRMPAC. Finally, Mr. Delay remained neutral on the railway, while most of the Texas delegation opposed the line.

Those circumstances, combined with Mr. Racicot’s proximity to the TRMPAC investigation, raised questions, but yielded no solid conclusions.

HELENA – The Montana Department of Revenue would like to remind volunteers that March 31 is the deadline to apply for Let’s Control It, the agency’s training program forresponsible alcohol sales and service. The volunteers will provide training to Montana liquor license holders on the state’s requirements for selling and serving alcohol.


“For the past eight years, we’ve relied on volunteers to conduct our trainings and we really appreciate their efforts and the time they invest,” said Department of RevenueDirector Mike Kadas.


The department is accepting applications and supplemental questions until March 31. Interested individuals can find the application and supplemental questions, along with the trainer criteria, online at under the Become a State Trainer tab, or they can call (406) 444-4307 to request one in the mail. Completed applicationsand supplemental questions can be mailed to Department of Revenue, Liquor Control Division, Education Unit, P.O. Box 1712, Helena, MT 59624, emailed toThis email address is being protected from spambots. You need JavaScript enabled to view it., or faxed to (406) 444-0718.


“Our agency strives to ensure that liquor licensees have the knowledge and skills they need to ensure public health and safety and to stay in compliance with the law,” saidLisa Scates, alcohol education coordinator for the department’s Liquor Control Division.


For more information, call Lisa Scates at (406) 444-4307 or email This email address is being protected from spambots. You need JavaScript enabled to view it..

By John S. Adams,

District Judge Ray Dayton on Monday heard more than three hours of testimony in his Anaconda courtroom as he considers competing pre-trial arguments in a high-profile political corruption lawsuit.

Commissioner of Political Practices Jonathan Motl is suing Republican state Rep. Art Wittich alleging Wittich illegally coordinated with third-party nonprofit political groups during his 2010 campaign for the Montana Senate. The case pits the state’s top political cop, an appointee of Democratic Gov. Steve Bullock, against one of the legislature’s staunchest conservative  lawmakers.

Dayton, who assumed jurisdiction of the long-running lawsuit last month, will take the testimony and arguments heard Monday into consideration and issue rulings this week.

Most of what Dayton heard Monday had already presented to the court in legal briefs.

Former Commissioner of Political Practices investigator Julie Steab responds to cross examination from state attorney Gene Jarussi.

Former Commissioner of Political Practices investigator Julie Steab responds to cross examination from state attorney Gene Jarussi.

On Monday he listened to testimony centered on the sworn statement of a former COPP employee who alleged someone deleted emails from her state-run email account that could be germane to the lawsuit. Julie Steab, a former investigator who worked at the commissioner’s office from January of 2011 until she quit in October of 2013, claimed there should have been emails in her state email account that illustrated Motl’s political bias against Wittich.

Steab also claimed that Motl, shortly after taking his post in June of 2013, had expressed a desire to “remove Wittich” and people like him from political office.

On the stand to dispute Steab’s claims, Motl said he did not delete any of Steab’s emails and denied ever making statements about Wittich to Steab. Motl said Steab was “the last person he would have said” that to.

Asked by the state’s attorney, Gene Jarussi, why that was, Motl responded, “Because I didn’t trust her.”

A witness from the state’s Information and Technology Services Division testified that the only person who could have deleted the Steab email archive, which was later recovered, was Steab, or someone with her log-in credentials.

Mary Baker, a current COPP employee, testified that she did not delete Steab’s emails. Baker testified that Steab was unhappy with the working conditions at the COPP office after Motl came on board in June 2013. Baker said Steab and Motl had a “personality conflict.”

Wittich’s attorney, Quentin Rhoades, eventually withdrew a motion asking the court to throw out the case based on “spoliation” of the Steab e-mail archive, and instead asked the court to force Motl to produce the emails.

In a separate motion, Rhoades asked the judge to dismiss the case for lack of jurisdiction. Rhoades argued state law does not allow Motl to independently investigate candidates, such as Wittich, without a formal campaign finance complaint. Rhoades said no such complaint against Wittich has ever been filed, and so Motl’s lawsuit is invalid.

The judge will consider these issues and others before a final pre-trial order hearing in Anaconda on Thursday.

Legislative Feature - Week 4

For publication the week of Feb. 2



By Michael Wright

Community News Service

UM School of Journalism


Sen. Scott Sales, R-Bozeman, sat in his office recently and talked about why he supports school choice, a nationwide movement to increase access to charter and private schools.


“I’m of the belief that the child’s education isn’t the responsibility of the state,” he said. “It’s the parent.”


Sales’ belief underscores most education debates – who’s in control, who’s responsible. Montana Republican legislators have bills both introduced and still being drafted aimed at giving parents more options and eliminating the national Common Core standards, which have been adopted by most states in the country.


These debates percolate each legislative session – to no surprise.


“There are certain topics that never go away up here,” said Sen. Llew Jones, R-Conrad.


The debate over choice


State funded school choice started gaining traction across the country in the 90s, championed by the likes of 2016 presidential hopeful Jeb Bush. In Montana, the Montana Family Foundation leads the push. 


Bowen Greenwood, the communications director for Montana Family Foundation, said the goal isn’t to eliminate public schools, but to give parents more options. 


“Montana public schools do very well for many students,” Greenwood said, but “there are kids who don’t thrive. There are kids who drop out. Sometimes what a student needs is a different environment.”


Opponents say it’s not the state’s responsibility to help parents pay for private schools, and that it would hurt the budgets of public school districts around the state.


On that side stands Eric Feaver, the president of MEA-MFT, the teachers’ union. He remembers the first school choice bill he lobbied against—a 1993 bill offering a tax credit to parents sending their children to private schools.


“It didn’t attract big crowds of people,” Feaver said.


Things have changed since then. Other states have implemented some form of expanded school choice, with either charter schools or tax breaks for families sending kids to private schools. And now, people in Montana are interested. 


In the House Education Committee before a recent hearing on a school choice bill, chair Rep. Sarah Laszloffy, R-Billings, asked the people who’d filled the room to raise their hands if they supported of the bill.


More than a dozen hands shot up. She then asked opponents to raise their hands.  Eric Feaver and four others, secluded in the front corner of the audience, raised their hands. 


The bill in that hearing was House Bill 322, sponsored by Rep. Don Jones, R-Billings. The bill would create a state special needs education savings account, funded with money directly from the budgets of local school districts.


Students with disabilities between the ages of 5 and 19 could use the money to go to private schools or other institutions that would meet their needs. The bill would also allow their siblings to use the money.


The bill was only the first of its kind to be introduced. 


Sales has an unintroduced bill that would give a $1,000 tax break to parents who send their kids to private schools.


Sales himself, like many on his side of the school choice debate, is the product of public schools. However, he sent his kids to private schools, and knows it’s expensive.


He said the bill is aimed at parents who want to send their kids to private schools but can’t afford it, like some people Father Leo McDowell has met in Livingston.


McDowell is the administrator at St. Mary Catholic School in Livingston, where tuition costs more than $4,100 a year. Around 45 students are enrolled at the K-8 school.


The school is growing, McDowell said, but their enrollment is well below the school’s capacity.


“We could probably support 120,” McDowell said.


He said the price tag keeps some parents from sending their kids there. A tax break might alleviate the sticker shock, he said.


“Those who, in their mind, would think it would be impossible might actually think about it,” McDowell said.


Feaver, however, said that tax credit bills have come and gone over the years.


In the past, most school choice bills have split the parties a little -- a few Democrats voted in favor of them, and moderate Republicans opposed them -- and what has reached the Bullock's desk has been vetoed.


The debate over control


Another target in the education debate are the Common Core standards Montana adopted in 2011. Common Core standards have been adopted by most states in the nation, and each has amended the standards to be unique to their state. For example, Montana’s standards include Indian Education for All, which ensures students in every Montana school learns about Native American history and contemporary issues.

Rep. Debra Lamm, R-Livingston, has an unintroduced bill aimed at getting rid of Common Core. The debate over the Common Core centers on who controls the standards.


Lamm, who got involved in education policy by working on school choice issue, thinks Common Core is flawed and props up large corporations that profit from education. She said that with Common Core Standards, federal authorities dictate how states educate their students.


“It’s really disingenuous to say that we still control it,” Lamm said.


Her proposal would void any standards or assessments related to Common Core and create an accreditation review council to develop education standards for the state.


State education officials, however, praise the standards as a major jump forward. 


“It would be a huge mistake to go backwards,” said Denise Juneau, Superintendent of Public Instruction. Juneau said the standards line out what students should learn at each grade level, but how teachers decide how to get students to meet them.


Some teachers also support the standards. Sharon Carroll, a high school math teacher in Ekalaka and member of the Board of Public Education, likes Common Core. She said it allows her students to explore some concepts deeper, and encourages them to be more interactive in their education.


“Kids remember better when they engage better,” Carroll said.


Carroll also said Montana’s standards are unique, and that teachers and local school districts were in full control of how they meet the standards.


Feaver said that fight might be coming too late since the standards have been used for the last four years.


But the state funded school choice debate is on in full force.


In the hearing on HB 322, Rep. Don Jones began his opening speech with the crux of the argument for school choice.


“It should be the parent’s choice,” Jones said in his opening speech on the bill.


Proponent after proponent spoke – including Jeff Laszloffy, former legislator and the president of the Montana Family Foundation, who promised more school choice bills would come before the committee.  A teacher from Belgrade and a few parents who said their kids would have benefitted from more options also backed the bill.


In opposition, Jim Molloy, representing Gov. Bullock, criticized HB 322 it as bad policy, and said he’d likely be speaking against all of the other school choice bills as they came up.


Time had run out for all of the opponents before Eric Feaver got up to speak. The chair of the committee, as is customary for hearings that run too long, asked speakers to briefly state their name, organization and opinion.


Feaver gave his name, organization and then stated his position.


“We rise in firm opposition as we have for more than 20 years to this bill and all its kindred spirits,” he said.



-Michael Wright is a reporter for the Community News Service at the University of Montana School of Journalism. He can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it.. Follow him on Twitter @mj_wright1.