The Davison debacle 

Do all roads lead to Burns?

Last week’s revelation that Billings investment broker Pat Davison was being investigated by the FBI and charged by State Auditor John Morrison for a host of securities laws violations is more bad news for Montana Republicans. Davison, a former Republi-can candidate for governor, was heartily endorsed by Repub golden boy Marc Racicot and just happened, until a month ago, to be the finance chairman of Sen. Conrad Burns’ reelection committee. Landing at the feet of a prominent Republican, the Davison debacle has added even more weight to the ongoing “culture of corruption” charges leveled by Democrats, and may well contribute to a general rejection of Republicans in this year’s elections.

To understand Pat Davison’s role in the Republican political machine, a quick tour through the past decade may prove useful. Besides having chaired the Yellowstone County Republican Central Committee, Davison was a “community leader” in Billings, active in the Catholic school system, and involved in a number of high-end schemes that led directly to Gov. Marc Racicot. For instance, as a partner with developer Mike Gustafson in Wesco Resources, Davison sought to build and operate the Tongue River Railroad, which was designed primarily to bring coal from southeast Montana to Burlington-Northern’s east-west line.

In politics the old saying that “what goes around, comes around” can be pretty useful, especially if, like Davison, you served on Racicot’s campaign finance committee and actively campaigned for him. And so, if you’re going to build a coal-hauling railroad, it would be nice to have access to some cheap coal—say some state-owned coal. The problem is that there wasn’t a lot of cheap, state-owned coal lying around. But with his good buddy Marc Racicot in the governor’s office, Davison and his pals went to work to take care of the cheap-coal shortage.

The result, which to this day remains mired in controversy, was the decision by Racicot to blow off a $10 million cash payment and instead take the Otter Creek Coal Tracts as part of the state’s settlement with the federal government for halting the development of the New World Mine on the edge of Yellowstone National Park. And so, with a wink and a nod from on high, suddenly Davison and his co-developers had access to an estimated half-billion tons of coal with which to fuel their get-rich-quick dreams.

But as we are finding out, not all of Davison’s investment schemes worked out so well. For one thing, Tongue River ranchers weren’t very excited about having a railroad running through their ranches, and have fought the line tooth and nail. Plus, the Otter Creek Coal Tracts are located on the eastern edge of the Northern Cheyenne Reservation and the tribe has already sued the state once to preserve its cultural, historic and religious assets should the coal be developed. And finally, the coal there contains so much sodium that burning it in conventional power plants is highly problematic, hence, the market is limited or nonexistent until some new technology develops to deal with the sodium content.

For the high rollers in the Republican Party, however, problems of almost any nature can be overcome by one simple method: Use political connections to rip off public resources to develop your own private wealth. So when Racicot toodled off to Washington to make a fortune off his connections to George W. Bush, Davison slid into Gov. Judy Martz’s office to keep his personal ball rolling. The result? In a highly unusual move, the Republican-dominated 2003 Legislature appropriated a tidy $300,000 in public money to do the initial investigations to prepare the Otter Creek Tracts for private development. The Republican chorus of Burns, Rehberg and their host of sycophants have loudly pushed for Otter Creek development and, as late as July, Secretary of State Brad Johnson attacked Gov. Schweitzer at the Republican convention for not moving quickly enough to develop those tracts.

Now, however, the worm seems to have turned on Pat Davison. As reported this week, Conrad Burns returned the $9,575 he got from the guy who chaired his campaign finance committee until July 27. Denny Rehberg tossed the $6,350 he got back at Davison like a hot potato, and Max Baucus, the Democrat who is always willing to take donations from Republicans, sent the $1,028 he received from Davison to a charity.

Why, even the Republican Party itself coughed up the measly $230 Davison sent its way once the bad news broke. Quite an interesting turn of events when you consider that Davison was the hands-down favorite of Republican leaders such as Martz and Racicot and raked in the big bucks from their industry connections when he ran against former Secretary of State Bob Brown in the gubernatorial primary.

To make matters worse, two of Davison’s former clients have filed suit alleging he ripped off most of their $1 million retirement account over a period of two years; they’re seeking $1.2 million in damages.

As for his partnership in the Tongue River Railroad, Chief Executive Mike Gustafson told reporters that sometime within the last 10 days: “Our business has separated itself from Davison and we have removed him from any management responsibilities in our projects.”

So once again, a high-level Republican operative goes down in flames of infamy, scandal and crime. And once again, the scoundrel is closely associated with Conrad Burns. Though Burns claims he doesn’t know Jack Abramoff, he’ll have a tougher time saying he didn’t know Davison, who was the chair of the senator’s own campaign finance committee.

Montanans, by and large, are trusting people. We tell the truth and we expect others to do the same. We treat each other with respect, take people at their word, and still do business on a handshake. But we are not fools. Over and over again the culture of corruption lands in Conrad Burns’ lap. The Davison debacle is just the latest nail in the lid of Conrad’s political coffin.

When not lobbying the Montana Legislature, George Ochenski is rattling the cage of the political establishment as a political analyst for the Independent. Contact Ochenski at

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