HELENA — Family members and employees of a Billings-based bail bond company facing fines and sanctions by the Montana Commissioner of Securities and Insurance gave nearly $13,000 to Republican State Auditor Matt Rosendale’s political campaigns in 2016.
One day after a 2017 face-to-face meeting with company representatives, Rosendale dropped the fines and dismissed two of the three allegations against Friedell LLC. The company paid no penalty under the terms of the agreement.
Kris Hansen, chief legal counsel for the commissioner’s office and a Rosendale political appointee, said in an interview Monday that it was her decision to end the longstanding legal action against the company.
“It was an extremely old and extremely contentious case that needed to end,” Hansen said.
Citing court backlogs, staff attorney time, and legal costs, coupled with the fact that the company was no longer in the bail bonding business, it made sense to reach an agreement with Friedel LLC, Hansen said.
Hansen said she was not aware that employees and family members associated with the company had given nearly $13,000 to Rosendale’s state auditor and U.S. House campaigns in the months leading up to his November 2016 election.
Rosendale, who is currently running to unseat two-term incumbent Democratic U.S. Sen. Jon Tester, has thus far declined to comment, despite repeated Montana Free Pressinquiries.
Friedel LLC’s attorney did not respond to a request for comment, and messages left at the company’s Billings office was not returned.
“The appearance is terrible”
A Montana Free Press review of campaign finance data found that family members and employees of Friedel LCC gave $2,970 to Rosendale’s 2016 campaign for state auditor between Sept. 28 and Aug. 27, 2016. On Oct. 6, 2016, those same individuals contributed $10,000 to Rosendale’s failed 2014 U.S. House primary campaign for the purpose of “debt retirement.” Rosendale finished third in the five-way Republican primary that year, garnering 29 percent of the vote.
All of the contributions were made in the summer and fall of 2016 while the State Auditor’s Office was engaged in a longstanding legal action against the bail bond company.
In Montana, the state auditor regulates companies that deal in insurance and securities, which is why the auditor is also known as the Commissioner of Securities and Insurance. A bail bond is an insurance product, so companies that provide bail bonds are regulated by the commissioner’s office.
Eight days after taking office in 2017 as the newly elected Commissioner of Securities and Insurance, Rosendale and Hansen met with Richard Friedel and his attorney, Bill O’Connor, in Rosendale’s office.
“Matt asked me to go to the meeting with him. I think he was concerned about what Friedel was going to ask,” Hansen said of the Jan. 10, 2017 meeting.
Hansen said Friedel and O’Connor had “piles of briefings and filings” with them at the meeting. “He wanted to tell us that the agency had been heavy-handed with him,” Hansen said. “I was very glad I was at the meeting. I wouldn’t let Matt speak, and I ended the meeting quickly when I realized what we were there for.”
Hansen said Friedel wanted a “re-review of his case outside of the standard procedures.”
“I wasn’t going to let that happen,” Hansen said. “We needed to work the case through the standard channels.”
Hansen said she was unaware of Friedel family contributions to Rosendale, and Rosendale did not mention the contributions to her.
“I didn’t know anything about the campaign contributions until recently,” Hansen said.
Hansen said someone told her “at some point” that Richard Friedel “donated to Republicans.”
“I don’t think it was at that initial meeting,” Hansen said.
Whether Hansen knew or didn’t know about the contributions is less important than the fact that Rosendale set up the meeting with a major campaign contributor just days after taking office, said Bob Stern, a longtime government ethics watchdog.
Stern is the former president of the California-based Center for Governmental Studies, which researched and advocated for ethics, campaign finance, and lobbying reforms in local and state government until its closure in 2011.
Stern said it’s not uncommon for large campaign donors to seek access to elected officials and regulators in an attempt to get something they want. And, Stern said, it’s usually not illegal.
“This, unfortunately, is very typical,” Stern said. “People who want something from government give campaign contributions hoping they’ll get a favorable decision.”
Stern said it is less common for elected officials—particularly those in regulatory or quasi-judicial positions such as the state auditor—to take such actions immediately after a face-to-face meeting with a campaign donor, especially when the action involves an individual or organization directly in conflict with the agency.
“The problem is, it looks like he is making the decision in exchange for the campaign contributions. He will deny that he did, but the appearance is terrible,” Stern said. “The appearance is that he made the decision to drop the lawsuit because these people gave his campaign a bunch of money.”
Hansen, who insisted that she didn’t know about the Friedel contributions, said Richard Friedel didn’t actually get the result he hoped for.
“At the end of the day, they didn’t get what they wanted out of this case,” Hansen said.