HELENA — A lawmaker reviewing an audit of a federally funded space research center at the University of Montana said Tuesday he wants more information about a lobbyist's role in the deal.
The request from Sen. Jim Elliott, D-Trout Creek, prompted a Republican to ask the Legislative Audit Committee to delay any further review of the Northern Rockies Consortium for Space Privatization until after the election season.
Elliott quizzed university and audit staff about the role Leo Giacometto, former chief of staff to Sen. Conrad Burns, R-Mont., played in securing the earmark from Burns that launched the center. He also asked how much Giacometto was paid by subcontractors working under the $4 million earmark.
Auditors told Elliott they did not have access to detailed financial dealings of Compressus Inc., of Washington D.C., which reportedly received a $270,000 no-bid contract from a spinoff company funded largely with federal money secured by Burns for the UM center.
Auditors painted a complex financial structure for NRCSP, which had a spinoff company called the Inland Northwest Space Alliance and several layers of contractors and subcontractors.
The space alliance is the focus of a separate audit by NASA. INSA first came under fire earlier this year amid reports its activities had never been approved by the Board of Regents and that it had yet to produce results.
Another lawmaker said it appears as though 80 percent of the earmarked money "went to personnel services who were in the food chain on this whole deal."
Sen. Joe Balyeat, R-Bozeman, was referring to a deal set up by Lloyd Chesnut when he was UM's vice president for research and development, and George Bailey, his former assistant.
Auditors said in a report presented to the Legislative Audit Committee that Bailey and Chesnut were acting as paid officers of INSA in 2003 when INSA was awarded a contract through the university research office where they were employed.
Chesnut left UM in 2003 for the University of North Texas, where he is the subject of another investigation for brokering a contract between North Texas and a company in which he had a significant stake.
Before he left UM, Chesnut was appointed chairman of INSA's board. He was paid $15,000 for five months of service on the board after he began his job in Texas. His wife, Lucy, was paid $104,100 to serve as INSA's business manager from her home in Texas. Auditors said Lloyd and Lucy Chesnut may have broken nepotism ethics codes when both were employed in the research office at UM and later at INSA.
INSA was launched to commercialize space technologies.
UM President George Dennison resisted the notion that the money was "frittered" away. He told the audit committee that the earmark was originally set up to put UM in a position to win a different grant to help with a space station that never materialized.
When that deal fell through, Dennison said the NPRC successfully used the money to run education and other programs.
But Elliott said his interest lies with the connection Compressus, Giacometto's lobbying company had with securing the earmark while possibly getting money through NRCSP.
"There's much more to it than what went on at the University of Montana," he said. "Taxpayer dollars have been funneled in a cozy relationship from one company to another."
Sen. Corey Stapleton, R-Billings, said the committee should wait to get more answers on the probe to resist any "politicization" of the results.
The committee did not take any action on the request.
"I don't think it has to do with politicization at all, it has to do with corruption," Elliott said. "I'm not sure corruption occurred, but I want to know badly."
The University of Montana, in a response to the audit findings, has said it will tighten oversight of its research programs.
Auditors are also working on a systemwide review of Montana university system research procedures and controls.