By Ron VandenBoom
(Editor's note: This is part one of a two part article.)
Mark O'Keefe, Democratic candidate for governor, said Monday that he did nothing unethical in using $500,000 collected from settlements, or the prosecution of insurance cases, for projects that included $210,000 for the Children's Health Insurance Program (CHIP) and, among other things, $176,000 for public service announcements (PSAs) that sometimes featured himself.
O'Keefe was responding to comments made by his Republican opponent, Judy Martz, during a fund raising stop in Havre on Sunday.
O'Keefe said he felt Martz's comments were done for "cheap political influence" through the media and showed how disparate her campaign is in the last 15 days of the campaign. He said her comments were "flat out wrong" and that he takes "great offense" at what she said.
Martz admitted Sunday that O'Keefe did nothing illegal in his use of the funds, but compared their use to that of Chuck Quackenbush, the one time Insurance Commissioner in California, who resigned after an investigation into settlements he arranged with companies that violated California's insurance law. He was accused of using the funds for private foundations he created and other projects in which he had a personal interest.
"This does not resemble the Quackenbush case," O'Keefe said. "Each and every expenditure was approved by Dave Lewis" the Racicot administration's former budget director who is now one of Martz's advisors.
Particularly annoying to Martz was O'Keefe's use of some of the funds for PSAs that featured himself.
She claimed the ads were used to advance O'Keefe's political career and causes for favored constituencies.
O'Keefe said the ads were "absolutely not" done for political purposes, but were done to help provide consumer information. He also said the Legislative Audit Division, after reviewing the settlements and the use of the funds, reported nothing improper in using the funds to educate consumers.
"I was doing my job," O'Keefe said. "Every time we did one of these messages we worked together with groups like AARP. ..."
He also said that not one dime of taxpayer money went into making any of the PSAs a claim that he said the Racicot/Martz administration can't make.
Proof, said O'Keefe, that the ads have worked is in the number of calls his office has received up a reported 30 percent, and the $32 million in settlement and prosecutionfunds that have been paid to Montana consumers/victims.
The State Auditor's Office has also recovered for consumers more than the department's annual budget of $3.1 million every year since 1995.
O'Keefe says the figure is a direct result of consumers being made more aware of their rights through the airing of PSAs.
O'Keefe also reacted to Martz's claim that he used the funds for "favored constituencies."
O'Keefe used $210,000 of the $500,000 to fund the start of CHIP, the health insurance plan for low-income children in 1998 a year before it could have been funded by the legislature. The funds resulted in matching federal funds of $1.2 million.
"I thought it was important to start the program early so we wouldn't miss out on available federal funds," he said. "I make no apologies for getting help for kids."
Martz also said Sunday that the legislature must have agreed with her because they passed a law in 1999 that forbids state agencies from keeping settlement funds.
O'Keefe sees it differently, blaming the change on the Republican chairman of the Senate Finance and Claims Committee, Chuck Swysgood. O'Keefe said Swysgood was upset that O'Keefe started the CHIP early and without legislative approval.
Swysgood was quoted in the Great Falls Tribune recently as saying he felt such expenditures should not occur without legislative review because it might lead to long-term financial obligations for the state.