Fact check: False nepotism claim against Montana's governor in GOP ad

The claim: Montana Gov. Steve Bullock 'steered' over $14 million in state funds to his brother’s company

A political ad by the National Republican Senatorial Committee accuses Democratic Montana Gov. Steve Bullock of "making deals to help his own family," referring to his brother's firm, unnamed in the ad but revealed to be Pioneer Technical Services in a NRSC press release.

“Bullock has been accused of steering state grants to his brother’s company,” the ad says. “In fact, the company founded by Bullock’s brother received more than $14 million from state agencies ...Think about that.”

Bullock is running to unseat incumbent Republican Sen. Steve Daines. Sean Manning, a spokesperson for Bullock's campaign, denied the ad’s accusations.

“These claims are not backed up by the facts,” Manning told USA TODAY in an email. “Senator Daines should tell his allies in DC to take down this outright misleading ad that defames a Montana company.”

More: Here are the 2020 Senate races to watch as the COVID-19 election comes into focus

Pioneer Technical Services, founded by William Bullock, called the advertisement “defamatory” in a letter urging a TV station manager to take it down. The company’s CEO, Brad Archibald, told USA TODAY no TV stations have said they will pull the ad and that the company has decided not to take further legal action at this time.

In response, the NRSC wrote Pioneer, telling the company to cease and desist from “interfering” in its political advertising and threatening to seek legal remedies.

Fact check:Steve Daines worked for P&G in China, but wasn't responsible for its US cuts

NRSC stands by ad

The NRSC has spent over $4.9 million against Bullock, one of many Democrats looking to unseat sitting Republican senators, according to OpenSecrets.org. Several thousand of that went toward ads.

In a statement provided to USA TODAY, the GOP campaign committee criticized Bullock's tenure in office as ethically questionable.

"His brother’s company received $14 million in taxpayer dollars since Bullock became governor, and he’s the ultimate authority on state contracts," NRSC communications director Jesse Hunt said.

Our findings, in short

To determine the veracity of the claim, two assertions must be analyzed: one, that Bullock intentionally guided funds to Pioneer Technical Services, and two, that the company is Bullock's brother's – or at least it was at the time the money was allegedly directed there.

A look at both Bullock brothers' careers, Montana law and a project to remove toxic waste from Butte soil demonstrates that neither of those assertions is true.

Bullock’s brother left Pioneer Technical Services before the governor took office

Pioneer Technical Services did receive money from the state of Montana during Gov. Steve Bullock’s tenure, but neither Bullock nor his brother was involved with the awarding of those funds.

Data from Montana’s transparency database shows the state of Montana has awarded Pioneer Technical Services roughly $13.3 million since fiscal year 2013, when Bullock was elected and took office. Archibald, Pioneer’s CEO, confirmed via his own tabulation that the figure is over $14 million. USA TODAY has reached out to Montana’s State Information Technology Services Division regarding the discrepancy.

“Their claim of $14 million is factual,” Archibald said. “The government didn’t steer it to us, but we have done $14 million of business with the state of Montana since 2013, or about that much.”

More: Montana plans mail-in voting for November runoff

Pioneer Technical Services was founded in 1991 by William Bullock and two others as an environmental services and engineering consultancy. Archibald told USA TODAY the company received its first contract with the state in 1992, and it has received contracts “continually.”

The elder Bullock brother resigned as CEO of Pioneer in 2004, selling his interest to its employees in 2009, after the company converted to a “100% employee-owned company,” Archibald said.

Bullock has remained on the board of directors since then, and became the board's chairman in 2017, according to the company's annual reports. He earns $1,500 per meeting, which take place quarterly, Archibald said.

Pioneer Technical Services Annual Report 2018 by Katie Wadington on Scribd

A 2015 corporate filing in Alaska lists Bullock as a shareholder, but Archibald said that was a mistake. “That is an error that I cannot explain,” he said.

Archibald said he submitted paperwork to get that fixed, and a search of Alaska’s corporations database confirmed that the elder Bullock brother is no longer a shareholder or vice president of the company.

Nancy Wiefek, a researcher at the National Center for Employee Ownership, also confirmed to USA TODAY that Pioneer has been employee-owned since 2009. A search of the U.S. Department of Labor's Form 5500 database confirms the same.

As the NRSC points out in a letter to TV station managers sent July 27, it is true that William Bullock signed some of the legal documents regarding shareholders and company officials under penalty of perjury and the company has not provided any explanation for this. But it remains the case that he left the company four years before the younger Bullock brother became governor.

To call Pioneer the governor's "brother's company" in any context after 2009, as the ad does, is false.

The younger Bullock brother was elected governor of Montana in 2013, but the claims that he’d been using his position to give his brother money preceded that.

While Steve Bullock was running for governor, the Republican Governors’ Association ran an ad claiming Bullock gave “millions of dollars in state contractor grants to donors, his former law and lobbying firm and even his own brother,” NBC Montana reported at the time.

NBC Montana fact-checked the ad and determined that Bullock had no say in where those grants went as attorney general, the position he held from 2009-13.

Governors can’t award state contracts in Montana

Regardless of the amount awarded to Pioneer, governors don't have the authority to choose who is awarded contracts, making it impossible for Bullock to “steer” money toward any company.

The Montana Procurement Act gives authority to award contracts. Favoritism is forbidden in making awards and contracts, per Montana Code Annotated.

“The Governor has no involvement in the procurement or contracting process for the State of Montana. That authority is granted by statute to the Department of Administration,” said Amber Conger, a spokesperson for that department. “There are no circumstances where the Governor has or would have any involvement.”

Parrot tailings removal project

As the NRSC set forth in its letter to station managers, the Montana Code Annotated says the governor has "full powers of supervision, approval, direction and appointment over all departments and their units."

It also says those powers don't extend to the office of the lieutenant governor, secretary of state, attorney general, auditor and superintendent of public instruction, "except as otherwise provided by law."

NRSC has pointed to the "Parrot tailings" removal project as evidence that Bullock was personally involved with a project that gave money to Pioneer.

In the late 1800s, Butte was a major mining town, and in it was the Parrot Smelter, a large factory where metal was smelted. The Parrot Smelter was shut down in 1899, but over a century later, the waste it left behind is still there.

The Parrot tailings are a huge deposit of buried toxic mining and smelting waste, which is contaminating groundwater that feeds into the Upper Silver Bow and Blacktail creeks, Montana Public Radio reported. That contamination poses a threat to the fish and aquatic systems there.

For decades, the state of Montana has disagreed with both the EPA and Atlantic Richfield, the company on the hook for Butte's Superfund cleanup, about whether the tailings need to be fully removed. The state has maintained that the tailings need to go, but the EPA and Atlantic Richfield determined the water could be treated without removing the source of the problem.

Pioneer was contracted to build a "metro storm drain" as a part of that determination, for which design work was completed in 2003 and construction was completed in 2004. The younger Bullock brother was not governor then.

In 2015, Gov. Bullock decided that the state would act to remove the tailings on its own accord. The project is being funded by money won in the lawsuit against Atlantic Richfield for damaging that land, the Montana Standard reported.

The Natural Resources Damage Program, a part of Montana's Department of Justice, oversees the project. Marissa Perry, a spokesperson for the governor's office, said that the governor's lack of control over which companies receive contracts extends to the NRDP.

Perry said that governors in Montana are required to sign off on restoration plans developed through settlement monies, like the Parrot tailings removal project, because they act as the trustee under federal and state Superfund laws.

"The Governor’s formal approval of a restoration plan occurs well before any competitive bidding or state contract process begins," Perry told USA TODAY in an email. "The Natural Resources Damage Program is under the Department of Justice, which is overseen by a separately elected official (the attorney general), and oversees its own contracting process and does not include the governor’s office in its contracting procedures."

The governor's decision to move forward on the project led to an amendment of the original Butte Area One restoration plan, which Bullock signed.

Pioneer Technical Services did not receive a contract from the state for the Parrot Tailings removal. In fact, because of the work it did for Atlantic Richfield, it "conflicted out" of bidding in the first place, according to Jon Sesso, Superfund coordinator of Butte-Silver Bow County government.

In order for the state's project to proceed, Butte-Silver Bow had to remove a number of county shops, under which the contaminated soil lay. The funds to do that came from the state government's NRDP, but Butte-Silver Bow had full authority to decide how it was used, Sesso said.

Sesso said that after the city's own bidding process, the local Butte-Silver Bow government awarded the contract to Hinick Associates. After it was hired, Hinick Associates subcontracted with Pioneer to assist with the civil engineering aspect of the project.

"The notion that the governor is somehow making decisions to steer funds to his brother – and specifically with the Parrot tailings project – could not be more false," Sesso told USA TODAY in an interview.

MK Weeden Construction was awarded the state contract for phase one of the Parrot tailings removal project through competitive bidding, the Montana Standard reported. Perry confirmed that to be true. Water and Environment Technologies manages the conceptual design and engineering of the project, she added.

Steve Bullock approved a second amendment to the plan last year to start phase two of the project and a bid package for phase two is being developed, Perry said.

All of these actions occurred after 2015, when the elder Bullock brother had already left the company.

Fact check: Illinois governor didn't scheme to give 'politician buddies' raises amid pandemic

In summary

Pioneer Technical Services was founded in 1991 by William Bullock, Montana Gov. Steve Bullock's older brother. He remained CEO until 2004, when he left the company, and in 2009, he sold all his shares to employees. Steve Bullock was elected governor in 2013.

It's true that documents filed by Pioneer, signed under penalty of perjury, say the elder Bullock maintained some shares of the company until recently, but two other sources — a researcher for the National Center of Employee ownership and federal 5500 forms — confirm that this is an error, in addition to Archibald's own refutations.

Governors in Montana do not have the authority to award contracts, and favoritism is barred by law.

The Parrot tailings project that the NRSC ad documentation cites was conceptualized in 2015, four years after the elder Bullock brother left the company.

"In short, the NRSC has provided no actual proof that Pioneer received state business because Steve and William Bullock are brothers, or that Steve Bullock directed over $14 million in state money to the company after he became governor," FactCheck.org concluded.

That is consistent with USA TODAY's findings.

Our rating: False

We rate the claim that Montana Gov. Steve Bullock “steered” money to his brother’s company as FALSE because it was not supported by our research.

Our fact check sources:

This article originally appeared on USA TODAY: Fact check: Ad's nepotism claim against Gov. Steve Bullock is false