Former Montana Senate President Jason Ellsworth abused his position of power in a contract he signed with a former associate and rushed the process to finalize it, resulting in a waste of state resources, according to a report by the Legislative Audit Division released Friday.

According to the report, the Department of Administration recognized a problem with a pair of contracts Ellsworth originally wanted approved. In an attempt to rectify the issue, the Department of Administration used an exception to roll the contracts together, but auditors said the process was not justified by state rules. 

“The initial effort (by Ellsworth) to artificially bifurcate the contracts and the subsequent acceptance of decisions to forgo proper sole source exceptions and exigency procedures deprived the state of the financial benefits of open competition in procurement, and therefore constituted a waste of state resources,” the report said.

The audit came after news that Ellsworth in December quietly signed a $170,100 contract with a former associate as head of a committee pushing for judicial reform despite committee members considering the expense unwarranted. The contract is in the process of being terminated.

Current Senate President Matt Regier criticized the deal, first reported by the Montana State News Bureau, as improper. Regier referred it to the Legislative Audit Division, which subsequently released the report to Senate leadership on Friday.

Ellsworth did not respond to requests for comment on Friday, but on Wednesday told the Daily Montanan that the allegations amounted to a “political witch hunt.” 

Senate leadership began weighing in on the matter Friday afternoon. Minority Leader Sen. Pat Flowers, who had been mostly quiet about the allegations of impropriety, released a prepared statement.

“We take any waste or abuse of taxpayer dollars very seriously. Furthermore, it is our responsibility to hold our colleagues accountable for their actions. It’s clear that Senator Ellsworth’s conduct fell below the high standards Montanans expect from their elected representative. This matter should be referred to the Senate Ethics Committee for further review and an appropriate resolution,” Flowers said. 

Regier previously said that an ethics complaint was likely to follow the release of the audit report, but would not respond to questions on Friday.

“I’m reviewing the Legislative Auditor’s initial report in detail and I’m glad to see the Senate Minority finally expressing concern over the situation. I plan to speak more on this highly concerning issue on Monday,” he wrote in a statement. 

On Wednesday, Ellsworth told the Daily Montanan he was “fully cooperating” with the audit. 

However, the report said the same day, Ellsworth declined to talk with the Legislative Audit Division for the investigation and did not respond to written questions, citing the need to secure a lawyer. 

“He did not respond to our written questions, and we have considered his public statements, where relevant, and have relied on the factual evidence of his actions as supported by official documents and witness interviews,” the report said. 

In December, Ellsworth attempted to enter into two contracts totaling $170,100 to hire Bryce Eggleston, with Agile Analytics, to conduct analysis of 27 bills throughout and after the 69th Legislature. The bills all came from the Senate Select Committee on Judicial Oversight and Reform, which Ellsworth formed while he was president and led as chairman.

But the report said Ellsworth first pressed to have two contracts approved, both under $100,000. The pair of contracts, one governing 14 bills and the other 13, were written to have all of the money paid to Agile up front, for flat fees of $88,200 and $81,900. 

The report found no “no logical reason” the contracts were split but said they were divided to “unlawfully avoid oversight of the contracts by the Division of Administration,” which oversees procurements of more than $100,000. 

“State law specifically prohibits artificially dividing contracts to avoid the required procurement process. Thus, these actions constitute an abuse of his government position by the former Senate President,” the audit report said. 

During a meeting of the Senate Select Committee in December, Ellsworth asked the committee about hiring someone to track the committee’s bills through the session and provide regular reports and analysis, but his ask was for “someone ‘cheap’ such as a college student,” the report states. 

The report notes that “even that modest proposal was disfavored by the committee members,” and committee member Sen. Daniel Emrich earlier told the Daily Montanan he felt “lied to” by Ellsworth’s actions. 

Thus, the subsequent $170,000 consulting expenses constituted abuse of his position, according to the report. 

Ellsworth contracted Eggleston, of Agile Analytics, a company that filed with the Montana Secretary of State in 2024, to do the analysis. Eggleston and Ellsworth have a long history of personal and business relationships. 

The report also called the timeline into question, as Ellsworth initially presented the two contracts to the Legislative Services Division on Dec. 26, a Thursday between two government holidays and just five days before the funds appropriated to the select committee would expire.

The timing “caused an inappropriate use of staff time during what otherwise would have been a weekend or holiday in impossible [sic] attempt to correct an illegal contract constituted a waste of state resources.” 

Emails between Ellsworth and staff with Legislatives Services and Department of Administration show that staff worked until the afternoon of Dec. 31 to correct and submit the contracts. 

Report details

Legislative attorney Jaret Coles on Dec. 27 informed Department of Administration Director Misty Ann Giles the two contracts from Ellsworth were likely invalid, but worried since both contracts had been signed.

“‘Long story short, the president (Ellsworth) attempted to enter into 2 contracts without our support the day after Christmas,” Coles said on Dec. 27. 

Giles, who was on vacation, referred the matter to Department of Administration’s procurement operations manager, who asked why the “two seemingly identical contracts were executed rather than one,” and the department decided to combine them.

It said the final contract was one “sole source” contract, requiring monthly payments, but it took extraordinary work to write the agreement for Ellsworth at the last minute and during the holiday. By law, a sole-source contract of more than $100,000 must be publicly noticed for 10 business days. 

The report said that in a normal situation, the Department of Administration would have stopped the process, but staff felt they were working “under exigent circumstances” because the appropriation from the governor’s office (for that committee) expired on Dec. 31. It said there wasn’t enough time to post for 10 business days as required by the “sole source exception.”

“Giles stated that, because a separate branch of government was involved, they felt they had to respect the separation of powers and have a ‘softer touch,’” the report said. “While acknowledging that the legal definition of exigency did not really apply here, they treated it as an exigent circumstance due to the imminent expiration of the Governor’s Office appropriation.”

A department spokesperson told the Daily Montanan earlier this week that “the Department of Administration’s State Procurement Services Division takes its responsibility of stewarding taxpayer dollars seriously.”

The audit report concludes that due to the timeline, and initial splitting of the contract, it could not meet the state’s definition of  an “exigent circumstance.” 

After Ellsworth’s contract came to light, he requested a termination of the agreement, stating a desire from Eggleston to avoid politics. Agile had already submitted an invoice, but Legislative Services Division did not plan to pay it.

Ellsworth earlier said concerns about the contract were a “manufactured controversy” and  continued to maintain he had not crossed ethical lines in executing the deal.