It was only a short while ago that I dismissed the Morrison scandal in Montana as a non-issue, and given the information at the time, given the information that had come out, it really was a non-issue.

As the story went at the time, a sleazebag named David Tacke was engaged in securities fraud on behalf of his company Venue Tech. Morrison's office (he's the state auditor) investigated. It turns out that Morrison was having an affair with the sleazebag's soon-to-be wife. So Morrison referred the case to an outside counsel who negotiated a settlement. Case closed.

So sure, people were offended by the affair, but I was not. And while I am a rabid fan of Jon Tester, I was glad the "scandal" wasn't something that would damage Montana's resurgent Democrats. Montana Republicans have been desperately seeking for traction against the state's gutsy Dems, and I was afraid this might give them ammo.

However, it turns out that the first draft of the story omitted serious facts, and it turns out that the scandal really is a scandal. It's bad.

The stuff above is still accurate. It just wasn't the full story. The Missoula Independent covered the rest of the story.

Within weeks of signing the agreement, Tacke and Venue Tech violated the settlement's terms, but rather than revoke the settlement and enforce the agreed-upon penalties, the auditor's office dragged fruitless negotiations on for more than a year.

Then, in January 2005, federal prosecutors stepped in where the auditor had backed off and indicted Tacke on charges of mail and wire fraud, along with 10 counts of money laundering. He was convicted that summer and sentenced in October to 108 months in prison. Tacke, who has since appealed the decision, is currently serving out his sentence in a medium-security federal penitentiary in Sheridan, Ore.

The piece is long, and full of details that paint a devastating picture for Morrison.

Bradford says he knew there was something wrong with the settlement agreement from the beginning.

"There were too many deadlines and loopholes that Tacke could slide through," Bradford recalls.

Karen Powell, deputy auditor and deputy securities commissioner, expressed her frustration with Tacke and Venue Tech's failure to comply just months after the agreement was signed. In a letter to Tacke and Venue Tech attorneys dated Oct. 8, 2003, Powell wrote that the securities department was committed to the settlement agreement, but that "the actions to date have not demonstrated that Venue Tech and Mr. Tacke have the same commitment."

Still, the auditor's office agreed to give Tacke and Venue Tech an eight-week extension to fulfill the department's request for the financial audits required by the settlement agreement.

According to Powell's letter, Morrison had a direct role in that decision. Her letter states that she "met yesterday with Commissioner Morrison and Beth Baker" and discussed the "failure of Venue Tech and David Tacke to meet the time lines...We agreed at that time to grant the eight week extension..."

By May 2004, Tacke and Venue Tech had received two deadline extensions and still hadn't appointed an independent board, delivered required audits or so much as provided the auditor's office with assurances that a rescission/repurchase offer was in the works.

Powell went back and forth with Tacke and Venue Tech for more than a year regarding their violations of the settlement agreement, but no enforcement action was ever taken.

Investors Bradford and Freeman aren't the only ones dumbfounded by the auditor's office's apparent unwillingness to enforce its own agreement.

It took the feds to hold Tacke accountable for his actions, which calls into question why Morrison was so unwilling to enforce the settlement. The obvious answer given the circumstances is that Tacke had that big ace up his sleeve -- if Morrison aggressively enforced the agreement, Tacke could reveal Morrison's affair with his wife and damage or end the auditor's promising political career.  

Montana's election will be based in large part on ethics, given that Republican incumbent Conrad Burns was Abramoff's BFF in the Senate. Morrison is tainted in this scandal not just by the affair stuff, but by evidence that the affair affected his ability to carry out his official duties.

It shouldn't take federal investigators to protect Montana investors from sleazy con artists. That was Morrison's job, and he failed dramatically, all because he apparently wanted to protect his political career.

Oh, and one more thing, courtesy of Montana blogger Wulfgar:

All you brave and desperate Democrats out there should keep this in mind;  only one of the current crop of Democratic Senate candidates was vociferously in favor of the defense of marriage amendment.  That would be adulterer John Morrison.

Suddenly, that affair seems more relevant to me. Hypocrisy is fucking obnoxious.

* * * *

Left in the West did a roundup of Montana blogger reactions here. Wulfgar has more here.

Oh, and Burns has lawyered up.

Originally posted to Daily Kos on Thu Apr 27, 2006 at 07:48 AM PDT.

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