Dark money group pays $30K fine for breaking Montana campaign finance laws

HELENA – A dark-money political organization that spent hundreds of thousands of dollars during the 2012 election to support conservative candidates for office has settled a lawsuit  accusing it of violating Montana’s campaign finance laws.

The Montana Growth Network, headed by former Red Lodge Republican state Sen. Jason Priest, agreed to pay a $30,000 fine to the state Commissioner of Political Practices under the terms of the settlement. The group also admits it violated certain state campaign finance and practice laws by failing to report tens of thousands of dollars of campaign spending during the 2012 election.

Priest, who wrote the check for the fine, said he was happy to put the matter behind him.

“I think both sides walk away with something and both sides walk away disappointed,” Priest said in a telephone interview Friday. “I think that’s like every settlement; there’s enough there for both sides to sign the agreement. That’s as happy as anybody needs to be.”

The lawsuit stems from three complaints filed in 2013 against Montana Growth Network alleging the group did not disclose all of its political expenditures during the 2012 election cycle. In 2015 former Commissioner of Political Practices Jonathan Motl issued a decision in that case in which he found sufficient evidence that the Montana Growth Network broke Montana election laws by failing to report all of the group’s campaign activities while supporting conservative Supreme Court Justice Laurie McKinnon and attacking her opponent, Ed Sheehy.

According to the settlement reached this week, Montana Growth Network reported spending only $41,865 in the Supreme Court primary election supporting McKinnon and opposing Sheehy. Over the course of the investigation, the commissioner found the group spent an additional $79,200 backing McKinnon that it did not report.

According to the settlement document, Montana Growth Network also reported spending just $5,237.60 in support of Republican candidates Jennifer Fielder, Wendy McKamey, Don Richmond, Roger Webb and Malcom “Mack” Long. However, according to the settlement, the group spent the additional following unreported and undisclosed amounts to influence the 2012 elections:

♦ $12,116.80 in the Senate District 2 race, supporting Dee Brown and opposing David Fern.

♦ $3,494 in the Senate District 6 race, supporting Janna Taylor and opposing Nancy Lindsey.

♦ $15,869.80 in the Senate District 7 race, supporting Jennifer Fielder and opposing Mark Sheets and John Marshall.

♦ $9,918.15 in the Senate District 10 race, supporting Wendy McKamey and opposing Brad Hamlett.

♦ $6,265.80 in the Senate District 17 race, supporting Don Richman and opposing Greg Jergeson.

♦ $3,079.50 in the Senate District 18 race, supporting John Brenden and opposing Julie French.

♦ $11,517.30 in the Senate District 24 race, supporting Roger Webb and opposing Wanda Grinde.

♦ $11,339.56 in the Senate District 26 race, supporting Malcom “Mack” Long and opposing Robyn Driscoll.

♦ $3,375.50 in the Senate District 27 race supporting Elsie Arntzen and opposing Gary Branae.

“We would like to thank Rep. Brad Hamlett and former Sen. Robyn Driscoll, and Mr. Dyrck Van Hyning for bringing the matter to the attention of the COPP, and for providing the office with the flyers that were circulating in their districts in 2012,” Jaime MacNaughton, general counsel for the Commissioner of Political Practices, said in an emailed statement Friday.

“Through the settlement of this matter citizens have a fuller picture of the extent of the unreported and undisclosed efforts which arrived in their districts in 2012, and a resolution of this matter on behalf of the citizens of Montana.”

According to tax documents, Montana Growth Network raised more than $900,000 in 2012, but as a 501(c)(4) tax-exempt organization, the group was not required by law to disclose its donors. The group’s IRS Form 990 disclosed at least $495,301 in payments to SCRP Media, Persuasion Innovation from Florence, and 47 North Communications of Helena.

Documents uncovered during the course of the lawsuit revealed that much of the group’s funding came from out-of-state donors, including $50,000 from billionaire media mogul James Cox Kennedy and $200,000 from billionaire financial executive Charles Schwab. Both men had been involved in high-profile disputes over Montana’s constitutional stream access law.

Kennedy was embroiled in a 12-year lawsuit against the state, and the case eventually made it to the state Supreme Court. In a January 2014 decision the high court upheld Montana’s stream access law. McKinnon joined Justice Jim Rice in dissenting from the majority in that case.

“In my view, the court’s opinion disregards more than a century of precedent governing prescriptive easements and undermines the balance the Legislature has struck between landowners and recreationists,” McKinnon said at the time.

Priest denied that the Montana Growth Network was formed to help wealthy out-of-state landowners undermine Montana’s stream access law.

“The mission of the Montana Growth Network is in its 990 and was on the website, and that was to have a dialogue about the courts and Montana’s prosperity. That was all it was intended to do,” Priest said.

MacNaughton thanked Priest for “accepting responsibility and for working with the COPP to achieve resolution of this matter for the people of Montana.” She also commended Gene Jarussi, the special attorney general who volunteered to litigate the case on behalf of the commissioner’s office.