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HELENA — State Auditor Monica Lindeen has reached a settlement with an ex-employee who left her office in 2009 after accusing Deputy Auditor Walter Schweitzer, the governor’s brother, of illegally soliciting political donations from fellow employees in a state building.

Under the agreement, the former employee, Laura McGee, will return to work for Lindeen for the next 16 months. However, she will telecommute from her home in Highwood instead of working in Helena as she had before leaving the office in late July.

A member of the Blackfeet Nation, McGee will work on a financial literacy program for schools and colleges on Montana’s Indian reservations. She will work for the auditor’s Securities Division from Feb. 1, 2010, through June 30, 2011 under the agreement and work from her home, which is closer to some reservations.

McGee will be paid the same $45,000-a-year salary, as she made as an assistant to the deputy insurance commissioner before leaving Lindeen’s office last summer. McGee told the Great Falls Tribune at the time that Lindeen fired her after she brought the complaint about Schweitzer to her, while Lindeen said McGee resigned voluntarily.

The settlement, signed by Lindeen and McGee Friday, said that any payments to McGee shall not be considered an admission of liability by Lindeen’s office, which has denied McGee’s allegations from the start. These nonadmission clauses are commonplace in settlements.

Investigating and settling McGee’s complaint cost the Auditor’s Office about $62,500, including a $35,583 payment to McGee for such nonwage expenses as unreimbursed medical costs and her attorney fees.

Lindeen’s office also paid $5,000 to Missoula lawyer Elizabeth Kaleva for investigating McGee’s allegations; $16,894 in fees and other costs for Helena lawyers Amy Christensen and John Sullivan for representing Lindeen’s office before and during mediation; and $4,932 to Missoula lawyer Dennis Lind for serving as mediator.

These expenses will come out of the Auditor’s Office’s existing agency budget, which does not receive money from the state general fund, said Jackie Boyle, Lindeen’s spokeswoman. The office had some money set aside for consultants and saved money by not filling McGee’s job, she said.

In addition, the Auditor’s Office collected $2 million in securities fees last year and collects millions of dollars in license fees, Boyle said.

Both Lindeen and McGee said they were pleased with the amicable resolution of the dispute.

“I am very pleased that Laura and I mutually decided that it was time to look to the future, and, most importantly, continue serving the people of Montana,” Lindeen said. “Resolving our differences without a bunch of legal wrangling was the right thing to do. I believe we found a sensible, well thought-out solution.“

McGee also praised the mediation efforts.

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“Monica and I both felt it was important to sit down and figure out a way forward,” McGee said in a statement released by the Lindeen’s office. “I am very pleased to have this unique opportunity to serve our American Indian communities by addressing financial education.“

In Lind’s more than 20 years of mediating cases, he said this one “stands out among those as a very constructive process, with two individuals who wanted to find a way forward that was positive for everyone.“

Kaleva, the independent investigator hired by Lindeen, reported in early October she found insufficient evidence that Walter Schweitzer illegally solicited political donations. In her report, Kaleva said she wasn’t able to substantiate McGee’s allegations because the former employee refused to cooperate in the investigation.

She said Schweitzer denied soliciting money in the office to pay off Democrat Lindeen’s 2008 campaign debt and for Democrat Dennis McDonald’s 2008 congressional campaign. He managed Lindeen’s 2008 state race and has raised money for McDonald.

After Kaleva’s investigation, Lindeen said she would use its findings to continue a thorough review of the agency’s internal review policies and procedures and to conduct additional training in ethics law, grievance procedures, transparency and public accountability.

Schweitzer remains as Lindeen’s chief deputy auditor.

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Here is the breakdown of the $62,409 that state Auditor Monica Lindeen spent to settle a complaint filed by Laura McGee, former assistant to the deputy insurance commissioner:

• $35,583 to cover McGee’s non-wage related expenses, including unreimbursed medical expenses and attorney’s fees.

• $5,000 to pay Elizabeth Kaleva, a Missoula lawyer, to investigate McGee’s allegations.

• $16,894 in fees and costs to pay Helena lawyers Amy Christensen and John Sullivan to represent the State Auditor’s Office after McGee filed her complaint and during mediation.

• $4,932 to pay Dennis Lind, a Missoula lawyer, to be the mediator in the case.