HELENA — Montana's Republican U.S. Senate candidate used $10,000 in donations earmarked for past campaign debt to instead boost his 2016 campaign for state auditor, then dropped the penalties that the donors' company was facing after he took office, according to agency and campaign records.
Matt Rosendale loaned his 2016 state auditor campaign $10,000 the same month he received that amount in donations from the family members who run Billings-based Friedel LLC to settle the campaign debt from his failed 2014 U.S. House run. It's an unusual but legal accounting move that Rosendale has also used in his campaign against Democratic U.S. Sen. Jon Tester.
But this time, there's the appearance of political donors benefiting directly from Rosendale taking office, said Brendan Fischer, an attorney for the campaign finance watchdog group Campaign Legal Center.
"You have a number of individuals who are facing sanctions by his office contributing potentially excessive amounts to his campaign and then receiving favorable treatment once in office," Fischer said. "It's hard to say that the laws were violated here, but it certainly creates a disturbing appearance."
Rosendale declined to be interviewed on Tuesday. Spokesmen for his campaign and for the state auditor's office said there was nothing improper about how the Friedel family's donations or the Friedel LLC case before the auditor's office were handled.
"It's election season, so people are paying attention to the politics, but this case was handled the same as anybody else," said state auditor spokesman Kyle Schmauch. "It just so happened that there was a donor in this case, but it wasn't handled any differently than any other case before us."
The settlement with Friedel LLC was first reported Tuesday by The Montana Free Press.
Friedel LLC, formerly a Billings-based bail bond company, was facing $3,500 in fines for hiding fees and charging illegal interest rates following an investigation completed before Rosendale's tenure. Friedel, run by a family whose members regularly donate to Republican candidates for office, was challenging the agency's conclusion and penalties in court when family members donated to his campaign.
In October 2016, four Friedel family members donated a combined $10,000 to settle Rosendale's 2014 U.S. House campaign debt. Rosendale then loaned his campaign that same amount the final weeks before the election in which he defeated Democrat Jesse Laslovich to become state auditor.
Three Friedel family members also donated the maximum $990 per person directly to Rosendale's state auditor campaign.
Days after Rosendale took office in January 2017, he, Richard Friedel and their attorneys met at Friedel's request, Schmauch said. They met again in December to finalize the settlement, which dropped the fines and two of the three charges against the company.
Rosendale's office rejected an initial settlement offer made by Friedel's attorney to drop all charges, Schmauch said.
Schmauch said Rosendale didn't know what the original meeting was about, and that Rosendale was not involved in any settlement negotiations. The whole matter was handled by staff attorneys, who decided to settle because it would have cost more to collect the fine than the fine was worth, Schmauch said.
A person who answered the phone at Friedel LLC, which is no longer in the bail bond business, declined to comment.
Rosendale used the same method of redirecting the Friedels' donations to his state auditor campaign through a personal loan to collect extra money from Republican donors who had reached the $5,400 contribution limit for his U.S. Senate campaign.
Rosendale directed $32,831 from wealthy Republican donors to his 2014 U.S. House debt, according to campaign finance reports. Days later, he loaned his Senate campaign the same amount.
Campaign spokesman Shane Scanlon said in both instances, Rosendale followed the law.
"We've been completely transparent about all donations, they are available on the (Federal Election Commission's) website and we're in full compliance with all the campaign finance laws," he said.
Democrats pointed to the Friedel donations as another in a growing list of questionable campaign finance accounting by Rosendale.
"Matt Rosendale continues to show that he's bringing the swamp to Montana and that he's only in it for himself," said Tester's campaign spokesman Chris Meagher. "He's once again facing legitimate questions around his campaign finance schemes."