Is Bill Mercer Investigating Conrad Burns, Gage, and Leo Giacometto?

by: Matt Singer

Tue Jul 31, 2007 at 08:15:43 AM MST

The U.S. attorney's office in Montana is probing Gage's financial connections to the Inland Northwest Space Alliance, a nonprofit venture launched in 2003 by the University of Montana with help from almost $3 million in federal earmarks pushed by Burns, two sources familiar with the inquiry have told National Journal.

After it was formed, the alliance hired Gage as its lobbyist and for consulting advice. Over a three-year-period, Gage and a company called Compressus -- which had both Giacometto and Burns's daughter, Keely, on its board -- received about $350,000 in fees from the alliance. According to Senate lobbying records, Gage registered as a lobbyist for the space alliance and for Compressus in 2004 and 2005. If federally appropriated funds were used for lobbying purposes, it would be a violation of the law.

Sources say that Gage has hired white-collar lawyer Stephen Ryan of the firm McDermott Will & Emery to help fend off the U.S. attorney inquiry as well as a separate probe by the inspector general at NASA. It is unclear whether Burns himself is a focus in either investigation. When questions about spending by the alliance were first raised in news reports last year, a spokesman for Burns defended the funding as a way to create jobs, and said that Burns was not aware that any federal money had gone toward paying lobbyists.

The newly disclosed U.S. attorney's inquiry and the NASA probe, which has been previously reported, underscore concerns that lobbyists and former colleagues of Burns raised earlier about his ties to Giacometto and Gage.

Several lobbyists with long ties to Burns say they were dismayed by his decision to join Gage after he left Congress. Two lobbyists said in interviews that they advised Burns against making that move. "I'm depressed about the senator's action," one lobbyist said. "In most people's eyes, he could have done so much better and gone out with dignity."

Other lobbyists once close to Burns said they warned him that going to Gage might spark legal scrutiny. One said that it almost seemed like the former senator was trying to put a "bull's-eye" on himself.