Every couple of days now it seems, the extent to which Sen. Conrad Burns has surrounded himself with people of questionable character (chief among them, of course, being Jack Abramoff) becomes clearer and clearer.
Today, the Montana State Auditor's Office announced it has begun legal proceedings alleging securities fraud against the former finance director for Burns' campaign, Pat Davison. Conveniently (too conveniently, perhaps), Davison quietly left his position with Burns four weeks ago, so Burns can claim that he's totally uninvolved in this. Except, of course, for the slimy associations he'd made in appointing Davison in the first place.
More below, with a huge tip of the hat to pontificator for alerting me to this.
The story originally broke over at
TPM Muckraker and has yet to make its way through the more traditional media, though I suspect it will get picked up in at least Montana pretty soon, as the papers there don't seem to mind pounding on Conrad these days. The
Great Falls Tribune already has an article up on this scandal.
Davison is accused of persuading two families to invest $1.2 million into fake accounts he created, State Auditor John Morrison said. He said the department notified "appropriate criminal justice authorities" of its findings.
The FBI also is involved in the investigation, but declined to comment Friday.
"This is an ongoing investigation and it has sensitivities and it would be inappropriate for me to make any kind of comment," said FBI spokeswoman Jan Caldwell. "It's a little premature for me to say anything."
The Burns campaign -- when it's forced to react -- will likely respond by claiming that these allegations never had any connection to anything that Davison did while associated with the campaign, but rather cover a period of time in 2003 when Davison was a securities salesperson and investment advisor representative for UBS/PaineWebber. The campaign will doubtless assert that it cannot be held accountable for Davison's actions from over two years prior to his affiliation with Burns.
But it's important to note that Davison didn't exactly come out of the woodwork in Montana politics. Davison ran for governor that year, and finished second in the Republican primary, having emphasized his anti-tax platform. So he's definitely been a player in state affairs for several years now.
It's also notable that today's actions, both the Notice of Proposed Agency Disciplinary Action and a Temporary Cease and Desist Order came of the State Auditor's Office, which is headed by John Morrison, who was Jon Tester's opponent in the Democratic primary earlier this year. One can hope that this entirely proper use of his official position is a good indication that Morrison won't allow political considerations to preempt the execution of his responsibilities.
For details on the allegations, a press release (posted at TPM Muckraker) from Morrison's office notes:
These documents allege Davison committed securities fraud against two Montana families. Davison is charged with convincing these families to take in excess of $1.2 million from investment accounts they owned at UBS/PaineWebber, including an IRA account and giving the money to Davison. Davison then put the money into fake investments he created. One of the fake investments Davison created was a bond supposedly issued by the St. Labre Indian School Trust. Officials at St. Labre's Indian School have confirmed that no such trust exists and they do not issue any bonds.
Davison also allegedly took money from one of these families to invest in a promissory note he personally guaranteed. The family alleges they have yet to see any of the promised return on the note.
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The Securities Department alleges several counts of fraud, unethical and dishonest practices, as well as selling unregistered securities and conducting securities business in Montana while not properly registered to do so. . . . [UBS/PaineWebber] and Davison terminated their business relationship in early 2003. The following year UBS/PaineWebber handled several customer complaints lodged against Davison resulting in over $500,000 in restitution being paid by the company. UBS/PaineWebber is aware of the Department's allegations and is cooperating with the Department on this matter.
The Montana State Auditor's Office has notified the appropriate criminal justice authorities in this matter.
With friends like these, how can Conrad Burns hope to win?
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