A renewed Republican attack that suggests Steve Bullock used his gubernatorial power to enrich his brother’s company has prompted a swirl of legal threats as he seeks the state’s Senate seat in a heated race.
While the Montana Democratic governor, who often flaunts campaign finance reforms that he signed into law, and the company denied any wrongdoing, a paper trail revealed a close relationship between Bullock and the firm, including the previously unreported fact that the company is a tenant in a building that the governor has a sizable financial stake in.
Republican attack ad
“Bullock has been accused of steering state contracts to his brother’s company,” said an ad from the National Republican Senatorial Committee, which hopes to defend the Republican Senate majority and fend off Bullock’s challenge to Republican Sen. Steve Daines. “In fact, the company founded by Bullock’s brother received more than $14 million from state agencies.”
The ad is an apparent reference to Pioneer Technical Services, an engineering and environmental firm founded by Bill Bullock, the governor’s brother, in 1991. It has received more than $14 million from the state of Montana since the governor took office in 2013.
The ad is a renewed attack for Republicans, who also went after the Democrat when he was running for governor in 2012. An ad that year said that while Steve Bullock was the state attorney general, he gave “millions of dollars in state contractor grants” to donors and his brother, an apparent reference to Pioneer Technical Services. Local news fact-checked the claim, noting that it was up to the governor, not the attorney general, to approve the grants.
Now that Bullock has technical legal authority over state contracts as governor, the Republican line has stronger legs in the Senate campaign.
Kendra Arnold of the Foundation for Accountability and Public Trust did not assess the specifics of Bullock’s situation and the NRSC ad but told the Washington Examiner that the issue would be whether there was a conflict of interest. That determination is “fact-dependent,” she said, and involves examining the financial interests of the public official and that of family members to determine whether a conflict exists.
Bullock and Pioneer Technical Services swipe back
Was there a conflict of interest in Bullock’s case? His Senate campaign and Pioneer Technical Services deny the implications of impartiality and nepotism.
“The claims in this ad are just not supported by the facts. First off, Gov. Bullock’s brother resigned from Pioneer Technical Services before the governor was elected to public office, and his brother sold his shares in 2009, four years before Bullock became governor,” a spokesman for the Bullock campaign told the Billings Gazette. “Second, it is absolutely false that the governor ‘steered’ contracts to this Montana business — all contracts are issued in compliance with state procurement laws.”
Brian Archibald, CEO of Pioneer Technical Services, said that Bill Bullock receives only a small $1,500-per-year stipend for his role on the company’s board of directors, suggesting that the governor’s brother did not personally profit from the contracts awarded to the company he founded. The company is 100% employee-owned.
Multiple Montana government officials have told various news outlets that despite technical legal authority, the governor did not play a substantive role in deciding which companies were awarded state contracts. Instead, Pioneer Technical Services and other companies underwent a competitive bidding process that is outlined in state law.
An attorney for the company responded to the NRSC ad last week with a cease-and-desist letter to news stations, asking them not to air the ad. “The NRSC advertisement disparages the reputation of Pioneer Technical Services,” it said. “If you continue to broadcast the advertisement, you will be exposing your station to a potential lawsuit for defamation.”
The NRSC, though, fired back with its own cease-and-desist letter, alleging that Pioneer Technical Services’s attempts to stop the ad from airing is “an apparent attempt to manipulate a federal election to benefit the brother of your company’s Chairman.”
“Our advertisement did not comment on why Steve Bullock directed state business that utilized your company,” the letter from NRSC’s counsel said. “We left it up to Montanans to draw their own implications about Steve Bullock’s direction over this state business.”
The NRSC pointed out that Bill Bullock remained involved in the company’s board after he stepped down as CEO in 2009.
And the Republican group pointed to what could be a key piece of evidence that would suggest that the governor’s brother does stand to gain from the state contracts: Several corporate filings in the state of Alaska said that Bill Bullock as not only a board member but a shareholder of Pioneer Technical Services.
But Archibald, the company’s CEO, told the Washington Examiner that the Alaska corporate filings were incorrect: “He owns zero shares of Pioneer. I do not know why it is listed that way; it is an error.”
He did not respond to follow-up questions by the time of publication about when the error was realized and whether an amendment will be filed to correct it, since the documents were presumably filed under penalty of perjury.
Close relationship between Bullock and Pioneer Technical Services
While in office, Bullock has publicly praised the company that his brother founded.
In 2010, two years before he won his gubernatorial campaign and while he was Montana’s attorney general, Bullock cited his brother as a positive example of economic development in the state. “I don’t have to look any further than my own family. In 1992, in the basement of a house here in Butte, my older brother started an environmental engineering firm, Pioneer Tech,” he said in a speech.
A 2014 blog post on Pioneer Technical Services’s website touted praise from the governor after he toured one of the job sites that the company was working on.
While it is normal for public officials to hold up companies as examples of economic development and environmental achievement, the connection between the governor and Pioneer Technical Services could appear to be not only one of brotherly moral support but also a financial and legal connection.
Pioneer Technical Services is a tenant in a building that Steve Bullock has a large financial stake in.
In the ’90s, Steve Bullock bought a historic building in downtown Helena, Montana, called the Herrmann Building. He and his wife started to fix up the building and lived on one of the floors, while other parts of the building became commercial space.
He later transferred his ownership stake for the commercial properties to Herrmann Building LLC, a company he co-founded. According to financial disclosure documents, the governor maintains a financial stake in the company valued between $250,001 and $500,000 and makes between $15,001 and $50,000 per year in rent and royalties.
Pioneer Technical Services is presumably one of those companies paying rent to Herrmann Building LLC.
The arrangement could be more by design than a coincidence, and the Herrmann Building connection between the governor and Pioneer Technical Services goes deeper.
A different company, Off Broadway Development, joined with Herrmann Building LLC to manage the building, according to state documents. Off Broadway Development is managed by 16 members, at least half of whom are current and former Pioneer Technical Services executives and employees, including the governor’s brother Bill Bullock and current CEO Brian Archibald.
According to a 2004 local newspaper article, Pioneer Technical Services paid for about $100,000 worth of renovations to the building before moving in. It said that the owner of the building, which would be Steve Bullock, ran out of money for renovations after completing the third floor.
Archibald did not comment about the company being a tenant in the building that the governor has a financial stake in, and Bullock’s campaign did not respond to the Washington Examiner’s request for comment about the arrangement in light of the NRSC ad.
“The financial relationship between Governor Bullock’s administration and his brother’s company certainly raises ethical red flags,” Jessica Furst Johnson, a partner at Holtzman Vogel Josefiak Torchinsky who has represented Republican political groups, told the Washington Examiner. “It’s hard to imagine that an officeholder could impartially dole out taxpayer dollars knowing his own company and family stand to benefit, and that’s especially true when we are talking about millions of dollars and multiple disbursements. At a minimum, Bullock should be required to disclose the extent to which he personally profited from this arrangement.”
