The Yellowstone-Clubbing of Brian Schweitzer?

by  JC

Hot on the heals of my post earlier this week  — which raised the call for my public lynching, and the ostracizing of 4&20, by dem party loyalists, apologists and hand-wringers for having the temerity to quote a source from World News Daily (there, I said it again, so you all can just quit reading now) — and Montana Superreporter John Adams’ great investigative report into Montana ex-Governor Brian Schweitzer’s dark money machine, I just felt that the dog days of summer were a good time to delve into the matter a little deeper.

Two seemingly unrelated pieces of information, when combined, escalate the gravity of the situation far beyond the simple politics with which most people want to whitewash this kerfuffle. The first piece from John Adams’ story:

“That group [Council for a Sustainable America] in 2009 received a $335,000 contribution from the Democratic Governors Association three months after Schweitzer was elected chairman of that organization.”

The second comes from writer Jerome Corsi:

“Allegations of fraud against Attorney General Eric Holder, other top Justice officials, several prominent Democratic operatives – including a major contributor to Hillary Clinton – and Credit Suisse Bank has been re-ignited by a federal bankruptcy judge’s decision that also apparently has derailed the U.S. Senate bid of a former Democrat governor.”

Why Jerome Corsi? Well, in case democrats need to be reminded, Corsi was one of the architects behind the Swift-boating of Senator John Kerry in 2004, and was co-author of the book Unfit for Command: Swift Boat Veterans Speak Out Against John Kerry”Yes the book was full of untruths, as was his book about Obama in “The Obama Nation.” Obama’s campaign was successful in rebutting Corsi’s book, while Kerry’s was not, and he lost the election by many accounts to “Swift-Boating”.

It is no secret that Brian Schweitzer would rather be U.S. president than a U.S. Senator. So when the man who helped tank one Senator’s presidential bid (and tried again unsuccessfully with Obama) takes notice of what some people thought was a shoe-in for Senate, well then it is fair game to talk about, WND or not. Further investigation stemming from Adams’ and Corsi’s writings have taken a long and winding road.

First off, Schweitzer’s announcements came right after a Federal bankruptcy judge threw out an involuntary bankruptcy case against Tim Blixseth, who built the Yellowstone Club out of old fashioned political and business wheelings and dealings of Big Sky Lumber.

That’s another huge story, but I digress: it did eventually put Blixseth on Forbes’ top 400 richest people list at one time, being worth $1.2 billion after his Credit Suisse loan, and he had to outsmart Ted Turner for tens of thousands of acres of land swaps in the ’90’s to lock up the land for the Yellowstone Club in the Gallatin Land Exchanges.

Blixseth, now that he was out of forced bankruptcy could proceed with several lawsuits. One of the lawsuits is against Credit Suisse for the way they loaned him and Yellowstone Club almost 400 million dollars (fraudulently in his mind) back in the real estate boom hey-days of 2005 and rampant equity recapitalization-fueled real estate speculation. And a big lawsuit against Credit Suisse for this sort of speculation was just file.

It was the way the money was lent and handled that led to the State of Montana — Schweitzer and DOR head Dan Bucks —  hitting Blixseth up for some $40 million in back taxes that went unpaid (though Bucks is on record covering for Brian already). Hence Montana’s resorting to the involuntary bankruptcy case it just lost, and Blixseth’s upcoming civil suit against Schweitzer and the State which promises to be entertaining as Blixseth’s legal team will inevitably want to depose Brian and the other players.

And Blixseth’s legal team wrote a letter to the U.S. DOJ (quoted below: BLIXSETH-YELLOWSTONE-CASE-mike-flynn-letter-to-DOJ) alleging a variety of crimes, coverups, improprieties and cronyism that may prove to be Attorney General Holder’s final undoing.

There were a bunch of other lawsuits over the loan and bankruptcies, and failed software IP battles (did I mention Blixseth peddled some software to the feds  7-8 years ago for anti-terrorism efforts that backfired?).

Now, I’m not trying to be judge and jury here. All the above info is public information, and as a matter of record I find Tim Blixseth and all of the people he dealt with to be incredible slime balls and crooks. They’ll get what they deserve (maybe).

But as part of Blixseth’s retaliation against the state and feds, he makes some big allegations at the end of last May about the roles that Schweitzer & Co had in his demise as owner of the Yellowstone Club in a letter addressed from his legal team to the U.S. Department of Justice Criminal Division (BLIXSETH-YELLOWSTONE-CASE-mike-flynn-letter-to-DOJ):

May 29, 2013

Jack Smith, Esq.
Chief, Public Integrity Section
U.S. Department of Justice
Criminal Division
950 Pennsylvania Avenue, NW
Washington, D.C. 20530

In March, 2008, when Edra [Blixseth] and [soon to become Yellowstone Club (YC) owner Sam] Byrne killed the YC sale, Byrne met with Schweitzer to formulate their scheme for the YC bankruptcy before [Bankrupcy Judge] Kirscher. See Byrne admissions concerning meeting with Schweitzer in testimony attached to May 4, 2012 Memorandum and exhibits thereto. Schweitzer was up for re election in 2008 when Byrne and Edra arranged the $35 million Byrne loan in August, 2008 in order to consummate the MSA [divorce agreement between the Blixseths] and, as part of their scheme, to file a bad faith YC bankruptcy. The chronology of events is telling:

(a) Between July 10, 2008 (four days after Edra announced to YC members on July 6, 2008 she was taking over the YC out of the divorce), and September 23, 2008, [Ron] Burkle, Byrne and Schweitzer funneled through the Democratic Governor’s Association, (“DGA” – Schweitzer was then Chairman) to the Montana Democratic Party, $1,245,000 by having Byrne and Burkle and their friends and cronies in the YC scheme, donate said sum to the DGA. The DGA then gave the money to the Montana Democratic Party who used it in the Schweitzer reelection campaign. See documents under separate cover identifying the Burkle and Byrne friends and cronies “donations.”

(b) On August 1, 2008, Edra and Byrne agreed on the $35 million loan to gain control of the YC. See Exhibits to the May 4, 2012 Memorandum.

(c) The next day, on August 2, 2008, Byrne and Edra met with Schweitzer at the YC to discuss their takeover of the YC. Exhibit 6 attached hereto.

(d) The next day, on August 3, 2008, the DGA received $750,000 from the Burkle cabal to give to the Montana Democratic Party. All of these financial transactions were done in the context of the Burkle / Byrne scheme to loan $35 million to Edra to secure control of the YC and then to put the YC into bankruptcy “to ensure they get the right outcome from the Montana bankruptcy judge.” For the $750,000 transaction see documents under separate cover.

This money laundering scheme – having Burkle / Byrne and their friends donate to the DGA and then to the MT Dem Party, and then to Schweitzer – appears designed to conceal Burkle and Byrne’s financial relationship with Schweitzer while at the same time Burkle and Byrne were taking over the YC and using their relationship and “political capital” and “political favors” with Schweitzer to do it. The illegal purpose of the scheme was to make political donations to corrupt the bankruptcy judicial process and “steal” the YC, a corruption mechanism routinely used by Byrne and Burkle – by Byrne in bankruptcy proceedings and by Burkle to obtain control over public funds.”

So all that dark money that funded Schweitzer’s two political operations? Blixseth says it was funneled there through Schweitzer’s friends as payback for them getting a cheap bid on buying the Yellowstone Club out of bankruptcy. Sweet, eh?

And so now we know that when republican operatives say they have a deep oppo report on Schweitzer, we know where some of the nasty stuff is coming from. Whether or not any of this is true or not is not the point of this post.

As the DW over at Pogie’s UC rightly stated:

“I accept that in politics the appearance of impropriety is as damaging as impropriety. The right has used that as a weapon far too often,”

and Schweitzer would have a hell of a time rebutting all of these allegations, particularly if he were named in a civil suit during a Senate bid. If I were Blixseth, I’d stay out of small aircraft and Mercedes CL-class autos.

This is one of those stories out of which history (and maybe a good movie) is made — not so much just Schweitzer’s part as bogey-man, but the whole shebang. Tentacles reach out in all directions and sweep in hundreds of actors, businesses, and countries. And the end has not yet been told.

Tim Blixseth most likely will spend the rest of his life caught up in legal battles surrounding the Yellowstone Club, or whatever further real estate adventures he may take on (see “Lochsa Land Exchange” for a current scheme of Blixseth to consolidate land and lock it up for private luxury estates).

In any case, should Brian Schweitzer decide to run for public office again, whether it be the Senate or the Presidency, he can rest assured that Jerome Corsi and the republican slime machine and its financiers will be ready to “Yellowstone Club” him, rightly or wrongly.

  1. Off-topic comment deleted. Strike three, you’re out.

  2. Big Johansson

    DW?/Rob’s comment.

    ” It’s a simple process. Level a specious allegation, found it on misinterpretation and innuendo, manufacture the evidence if you have to, and then demand a response based on the idea that a politician has to EARN (morally purchase) your vote. That’s not representative Democracy; It’s insanity.”

    Like Denny’s a drunkard/hates firefighters. Conrad and Abramhoff?

    Welcome to the party, pal.

  3. Big Johansson

    By the way Liz congrats on you leaving the “group”.

    Groupthink is a psychological phenomenon that occurs within a group of people, in which the desire for harmony or conformity in the group results in an incorrect or deviant decision-making outcome. Group members try to minimize conflict and reach a consensus decision without critical evaluation of alternative ideas or viewpoints, and by isolating themselves from outside influences.
    Loyalty to the group requires individuals to avoid raising controversial issues or alternative solutions, and there is loss of individual creativity, uniqueness and independent thinking. The dysfunctional group dynamics of the “ingroup” produces an “illusion of invulnerability” (an inflated certainty that the right decision has been made). Thus the “ingroup” significantly overrates their own abilities in decision-making, and significantly underrates the abilities of their opponents (the “outgroup”). . .Irving Janis pioneered the initial research on the groupthink theory. He . . . coined the term by analogy with “doublethink” and similar terms that were part of the newspeak vocabulary in George Orwell’s novel “1984”. — Wikipedia.

    • lizard19

      not sure why you would congratulate me on JC’s post, but thanks I guess. I’m sure you’re delighted at the increased odds of Republicans taking back the Senate with Schweitzer out (unless Jack is right). there is a very cynical part of me that is ok with that scenario, and a Republican win in 2016. too bad actual people’s actual lives are actually at stake.

  4. Chuck

    Nice work JC. The YC is a cesspool.

    • JC

      Thanks Chuck. I lived in Bozeman for 12 years during the 70’s & 80’s, and saw the changes all of the forest exchanges did to the land–yes the wilderness designations were good, but… I got involved with some of the orgs working on the issues, so I get passionate about what the YC has done to Montana, and now it appears to be doing to Montana politics.

  5. Roy

    Wow, you censored and kicked out Pogie for “off topic” comments. Pretty cowardly, I thought you could handle yourself better than that JC.

    • JC

      I was just spanking him for censoring me and blacklisting me at his site. He was just trying to derail the comments. Lame.

    • lizard19

      Roy, just so you know, each contributor is basically tasked with moderating their own posts.

      that said, I don’t understand why Pogie would make a comment on July 20th after declaring two days earlier that he’s no longer a part of our “audience”. this from his post:

      4and20 blackbirds used to be the best, most thought-provoking, and most unique political blog in the state. I miss it, but no amount of my disappointment will bring it back to what I enjoyed—and the writers there today certainly aren’t under any obligation to meet my expectations.

      But there’s a lot of Internet out there, and interesting and unique voices writing about politics in the state and the nation. Those are the sources I’ll be engaging with, arguing with, and learning from in the future.

      yeah, so much internet that two days later he’s back commenting on JC’s post.

      Pogie can still comment on other contributor posts, if he wants. and readers of this blog can still find Intelligent Discontent on our blogroll.

      I can’t say the same for ID.

    • JC

      Yep, now that Blixseth’s involuntary bankruptcy proceedings by the state of Montana and others has been tossed out, he’s free to file countersuits against all the parties that he feels have wronged him. And he puts Schweitzer at the top of the list. Expect much more to come along these lines.

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