The campaign to renew the levy contributing roughly $19 million a year to public higher education in Montana is facing allegations of campaign finance violations.
Voters first passed the levy that supports public colleges and universities in the state in 1948 and then renewed it every decade since. The levy will be on the 2018 ballot.
Timothy Adams, a Bozeman man and treasurer with Montanans Against Higher Taxes, filed the complaint in February with the Montana Commissioner of Political Practices. Adams named as respondents Montanans for the 6Mill, or Montanans for Higher Education, and 6Mill treasurer Mike Frank, the CEO of Blue Cross Blue Shield of Montana.
In a response filed Tuesday with the Commissioner of Political Practices, Montanans for the 6Mill argue the allegations should be dismissed, and assert they have worked proactively to comply with Montana laws.
The allegations include a lack of sufficient disclosure for consultant spending including some $45,000 paid to Hilltop Public Solutions and $35,000 paid to Strategies 360, or S360, in 2017. The complaint cites Montana Code Annotated’s (MCA) disclosure requirements.
“Reports of expenditures made to a consultant, advertising agency, polling firm, or other person that performs services for or on behalf of a candidate or political committee must be itemized and described in sufficient detail to disclose the specific services performed by the entity to which payment or reimbursement was made,” according to MCA 13-37-229.
In the campaign’s response, a lawyer for the 6Mill said the committee has since provided additional details in an amended report filed Tuesday. The campaign paid and reimbursed Hilltop and S360 for various items including a communications strategy and campaign plan, according to the filing available on the commissioner’s electronic reporting system.
“Since becoming aware of this issue, the 6 Mill Campaign has personally worked with the commissioner’s office in order to correct these deficiencies,” wrote Anne Sherwood, with the Helena firm Morrison, Sherwood, Wilson and Deola.
The complaint is pending with the Commissioner of Political Practices, whose office declined comment.
Adams briefly ran for the Montana House as a Libertarian Party candidate although he withdrew before the general election in 2012, according to the Bozeman Daily Chronicle. He also was formerly paid by the Montana Republican State Central Committee.
The complaint raises matters in addition to lack of disclosure. It also notes the campaign treasurer for the 6Mill is the CEO of Blue Cross Blue Shield of Montana, which is contributing to the campaign and profiting from the university system. Additionally, the complaint alleges coordination with members of state government, “including the (Montana) Board of Regents.”
Specifically, the complaint requests the commissioner examine contributions made by Regents Bob Nystuen and Paul Tuss. In the most recent finance report attached to the complaint, Nystuen, market president of Glacier Bank, donated $500, and Tuss, executive director of Bear Paw Development Corp., contributed $200.
In telephone interviews, the regents said they were pleased to support higher education through their donations, and the campaign’s lawyer said in the response the contributions are not illegal.
“There is no law that prohibits members of state government from contributing to political committees as individuals because such a law would unreasonably restrict government workers’ First Amendment rights,” Sherwood wrote in the letter provided to the Missoulian by S360.
Nystuen, a community banker and vice chair of the Board of Regents, said “of course” he and his wife will donate to the levy, and he’s not a paid public employee. The governor appoints and the state Senate confirms regents.
“Really, what I’m about today is to continue to protect our higher education system,” said Nystuen, of Kalispell. “I’m more than happy to have been an initial donor to the 6 mill campaign.”
Tuss, of Havre, said he believes in the 6 mill levy; he’s worked in economic development for 22 years and has seen firsthand the impact higher education has on Montana’s economy.
“The product of the Montana University System in terms of an educated workforce has been a significant and very positive impact on Montana’s ability to compete economically,” Tuss said. “Without the 6 mill levy, we would probably be talking about a $20 million per year hole in our budget for the university system.”
In the complaint, posted online with this story, Adams notes that a majority of contributions come from corporate entities, and an attached finance report identifies a $10,000 donation from Blue Cross Blue Shield. Yet he said the state requires Montana officials to “prohibit, whenever possible, corporations from making contributions to or expenditures on the campaigns of candidates or ballot issues.”
Blue Cross benefits “to the tunes of millions of dollars” from its contract with the university system, said the complaint. In 2008, Blue Cross spent more than $200,000 to support passage of the levy, and “Frank received $1.15 million in compensation as recently as 2013,” according to the complaint.
Blue Cross directed requests for comment to the campaign, and in its response, Sherwood said corporate contributions to ballot issue campaigns are not illegal. Citing Citizens United v. FEC and a subsequent case, she also notes that if the provisions Adams quoted — but improperly sourced — did “carry the weight of law, they would still be unconstitutional.”
An estimated 8 percent of students from the Montana State University and University of Montana campuses enroll in the Blue Cross Blue Shield plan and altogether pay more than $11 million a year for the coverage, according to data provided by Kevin McRae, deputy commissioner of human resources for the Montana University System. He said most of the money covers claims.
“Blue Cross Blue Shield offers a student health insurance plan that was approved by the State of Montana in a competitive bid process,” McRae said in an email.