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

A Hamilton senator's recent attempt to skirt oversight in the bidding process constituted abuse of his government position as Senate President, and he wasted state resources in trying to resolve the matter, legislative auditors have determined.

Republican Sen. Jason Ellsworth quietly signed a $170,100 contract with a former business associate using leftover legislative committee funds, skipping the public bidding process.

The Montana State News Bureau first reported on the contract Ellsworth arranged with Agile Analytics, a newly formed company with no clear qualifications for the state-funded job. The company’s only apparent employee is Bryce Eggleston, a longtime business associate of Ellsworth’s.

Ellsworth could not be located in the State Capitol building Friday and did not return a voicemail seeking comment for this story, but responded through Joan Mell, his attorney.

Mell, as Ellsworth had said earlier in the week, characterized the probe into the contract as a misguided political witch hunt against him by the new Senate President, Kalispell Republican Matt Regier.

“This is so biased and outcome-driven it’s absurd,” Mell said in a phone interview late Friday.

Before the contract was ultimately signed, Ellsworth first attempted to split it into two documents to keep the business deal below the $100,000 threshold which requires a bidding process with the Department of Administration.

"There was and is no logical reason that the original contracts were bifurcated other than to unlawfully avoid oversight of the contracts by the Division of Administration..." the memo reads. "State law specifically prohibits artificially dividing contracts to avoid the required procurement process."

When Regier learned of the arrangement, he reported it to the Legislative Audit Division's fraud, waste and abuse hotline, he said.

Regier said Friday he’s under the impression that the Legislative Auditor’s work is not done and the division will release more findings on the matter in the coming months.

Sen. Greg Hertz, a Polson Republican, told the Bureau that after reading the report, he believes the matter should be referred to the Senate Ethics Committee. Senate Minority Leader Pat Flowers, D-Belgrade, said in a statement he also believed it should go to Senate Ethics "for further review and an appropriate resolution."

"We take any waste or abuse of taxpayer dollars very seriously. Furthermore, it is our responsibility to hold our colleagues accountable for their actions," Flowers said. "It is clear that Senator Ellsworth's conduct fell below the high standards Montanans expect from their elected representatives."

The money behind the contract came from leftover funds from the Special Select Committee on Judicial Oversight and Reform which Ellsworth formed and chaired. According to internal emails, Ellsworth sent the split-up contracts on Dec. 26. Staff ultimately blocked the dual contracts, and the lone one was signed on Dec. 31. Ellsworth was Senate President at the time but lost his bid to retain the legislative leadership position to Regier.

An invoice was sent to the state earlier this month, but no payments were ever made. The contract is in the process of being canceled.

The Montana Department of Administration, which signed off on the contract, said it granted the contract without going to bid because the funding was set to expire when the select committee officially ended on Dec. 31, spokesperson Janna Williams previously told the Bureau. Because of the tight deadline, DOA approved it as an emergency — or what is referred to as “exigent” — contract which are not subject to the same procurement rules, Williams said.

However, DOA Director Misty Ann Giles and two other department employees who were interviewed by auditors all acknowledged that the “legal definition of exigency did not really apply here,” the memo says. The audit division also concurred that the exigent circumstances exception to the procurement process should not have applied to the contract.

The DOA could not be reached for comment late Friday.

While Ellsworth first sent the contract drafts the day after Christmas, the memo says he first approached the Legislative Fiscal Division in October, asking “how to hold funds to prevent them being reverted to the Governor’s Office.”

Legislative auditors wrote that they requested an interview with Ellsworth, “but following a discussion in our office on Jan. 22, 2025, he declined to participate without the involvement of his attorney.” Auditors sent him a list of written questions and the senator did not respond, according to the document.

Mell on Friday sought to discredit the memo because it was released before she had engaged with the probe.

“It is a perfect example of why you don’t write reports and issue findings without getting input from all the relevant parties,” Mell said Friday evening. “There’s obviously some gross assumptions and speculation that are below standard for audit performance reviews and audit findings.”

Mell was one of Ellsworth’s citizen appointments on the Senate select committee he formed last year.

Ellsworth, and Mell in her phone interview, have tried to draw clear distinctions between what Ellsworth proposed to the Senate committee in November — which was in-session bill tracking — and the scope of work eventually outlined in the contract, which was a post-session analysis of the bills that ultimately passed through the legislative process and became law.

Additionally, Mell insisted Friday that an exigency did exist because the money would have soon become unavailable to Ellsworth to carry out the contract to monitor the committee’s judicial reform legislation.

However, the funding would have been sent back to the Governor’s Office of Budget and Program Planning on Dec. 31, and the Legislature, which funds state government for the biennium, was set to gavel in less than a week later.

Mell maintained that it was much less certain that lawmakers would have set the $170,100 aside for the post-session analysis.

“It is no guarantee that you’re going to get that money back,” she said, contending Ellsworth did not need consensus from the committee to spend the funds to track the committee’s bills.

Eggleston, Ellsworth’s former business associate to whom Ellsworth awarded the contract, did not return a call seeking comment for this story late Friday.

Over the past week, legislators have been discussing what the correct procedural steps would be to properly address the incident.

The Legislature has such little recent experience with an incident like this that a legislative attorney put in a public records request with the Montana Historical Society to learn how the body should proceed.