Ellsworth contract updates: Ex-business associate says contract was his proposal

After Sen. Jason Ellsworth came under fire for an improper state-funded business contract, Ellsworth’s associate on the receiving end of the deal said under oath the contracts were his own idea, according to sworn testimony obtained by the Montana State News Bureau.

It is the first time his business associate, Bryce Eggleston, has weighed in since news broke of the business deal.

Eggleston, through his company Agile Analytics, entered into a contract with the senator late last year. The $170,100 contract, which was funded by leftover money from an interim committee, skipped the public bidding process required by state rules. Ellsworth, a Hamilton Republican, had access to those funds through his role as Senate President and as chairman of the Senate Select Committee on Judicial Oversight and Reform.

In a memo released late last week, the Legislative Audit Division wrote that Ellsworth’s actions were an abuse of his government position as Senate President, and that he wasted state resources in trying to resolve the matter. The 56 pages of Eggleston’s sworn testimony was attached to a letter dated Jan. 28 from Ellsworth’s attorney, Joan Mell, sent to the Legislative Audit Division.

In the letter, Mell argues Eggleston’s testimony undermines the auditor’s findings.

Under oath, Eggleston said Ellsworth explained the bill analysis he needed done, but Eggleston came up with the draft contracts and the cost without Ellsworth's guidance.

"He was just explaining to me work that needed to be done, and it was actually I who had asked to put in a proposal for the work," Eggleston said in his testimony.

Per the agreement, Eggleston was meant to provide an analysis of the implementation of a package of 27 judicial reform bills, which are a high-priority item for the GOP-led Legislature. The contract has since been terminated and a Senate Ethics Committee convened to look into the business deal. The committee held an initial meeting Wednesday afternoon.

“The work itself is important. I anticipated working hard and doing a very good job,” Eggleston said while being questioned by Mell. “And it's unfortunate that it was politicized and … that I was defamed and harmed significantly for life.”

Until now, it has remained largely unclear what qualifications Eggleston possesses to complete the work outlined in the contract. Agile Analytics, which was registered with the Secretary of State’s Office less than three weeks before the contract was inked, has almost no digital footprint.

Legislative audit: Sen. Ellsworth's contracts 'illegal,' 'waste of state resources'

In the testimony, Eggleston said he has “a long history of business management" and experience doing work “on legislation and for the GOP.” He said he has volunteered on campaigns, but does not have experience with the topic of judicial reform.

“I believe I'm overqualified to do this job and would have done a great job,” he said. “I figured that the proof, you know, would be in the pudding and that would be the – the quality of work itself.”

The interim committee was originally allocated $500,000 to do business, and the $170,100 came out of the leftover funds shortly before the committee was set to disband. Eggleston said he came up with the price tag by assuming an average cost of $6,300 per bill.

Ellsworth also said Eggleston approached him with the proposals. The two were business associates at one point more than a decade ago, according to court records from the early 2000s.

Eggleston’s sworn testimony says the two have no current business associations. Ellsworth declined to comment Wednesday on when the two stopped doing business together before Ellsworth facilitated the contract.

Before the finalized contract was signed, Ellsworth sent two nearly identical contracts — which Eggleston says he drafted — to legislative staff that split the work up. Together, those invoices added up to $170,100, but separately appeared as two expenses below $100,000. Any contract exceeding $100,000 is required to go through the state bidding process with the Department of Administration.

Auditors wrote that splitting the agreement into two separate contracts below $100,000 was “unlawful."

"There was and is no logical reason that the original contracts were bifurcated other than to unlawfully avoid oversight," the audit report said.

Now, Eggleston is calling the audit’s findings "false" and saying that splitting the work between two contracts was his idea and “had nothing to do with” the $100,000 threshold. When asked by Ellsworth’s attorney why they were split, Eggleston said it was “an internal business decision for fulfillment of the work itself.”

“I think that significant harm has been done to me and my reputation and my ability to do business going forward, when I did absolutely nothing illegal or wrong,” he said.

Emails: Legislative staff blocked senator's initial request for controversial contract

Eggleston’s testimony was attached to a letter from Mell sent to Legislative Auditor Angus Maciver, in which Mell wrote that the audit memo “defamed” Ellsworth. It asks Maciver to correct his "mistakes."

When asked to respond to Mell’s accusations, Maciver issued a statement declining to directly weigh in.

“While other parties are free to discuss the matter, we believe it would be inappropriate to do so at this time,” he wrote. “The issue remains under active investigation as a hotline matter and is also under review by the Senate Ethics Committee. It is important that we allow these processes to proceed fairly and without interference, ensuring the integrity of the ongoing efforts.”

The ethics committee, composed of two Republicans and two Democrats, held its organizational meeting Wednesday afternoon to approve rules and a tentative schedule for next steps.

Ellsworth was in attendance, and at one point attempted to speak on the rules, but his efforts were denied when Sen. Forrest Mandeville, R-Columbus, refused to recognize him.

The ethics committee set its next hearing for Feb. 3.

Democrats voiced concern Wednesday about Senate President Matt Regier’s retention of attorney Matthew Monforton to assist the committee in a prosecutorial fashion, saying they worried it could further politicize what they want to be a fair process.

Ellsworth and Mell say he was not given adequate due process because he was only provided a day to respond to questions from auditors before the memo from the audit division was released.

“I have sat down on (the Legislative Audit Committee) for six years,” he said. “I have never seen an audit turn around in, I don’t know, 48 hours.”

In an indication of what's to come at the upcoming ethics hearings, Ellsworth told the Montana State News Bureau he intends to bring up Mell’s letter and Eggleston’s sworn statements.