Scrutiny is growing over the Montana Airborne Fire Company once run by Tim Sheehy, the former Marine and Republican Senate candidate who could unseat Democrat Jon Tester in next month’s election.
According to NBC News, Sheehy’s Bridger Aerospace, a company he founded in 2013, negotiated a deal with Gallatin County in eastern Montana to use its pristine credit rating to raise $160 million in bonds. The county was to take advantage of Bridger’s plans to hire more workers and build two new aircraft hangars.
But the company used most of the money, or $134 million, from the 2022 bond issue to pay back earlier investments by Blackstone, a New York-based investment giant.
Bridger’s finances have been complicated by the fact that there were fewer fires to fight this year and thus less income for Bridger. As of Tuesday, the National Interagency Fire Center reported 42,603 fires nationwide this year, compared to the 10-year average of 48,689 for the same period.
In financial filings for the quarter ended June 30, 2024, Bridger said it had “a significant amount of debt” and that failure to service that debt “could cast substantial doubt about our ability to continue as a going concern.”
A victory for Sheehy in November could give Republicans control of the Senate, making his ties to Bridger a vital topic as voters head to the polls.
Sheehy, 38, stepped down as CEO of the company in July. He has run his campaign in part based on his business acumen.
Questions surrounding Gallatin County’s approval of Bridger’s bond deal revolve around whether the board was correctly informed about the company’s financial position — it has lost $150 million since its inception — and whether Gallatin’s credit rating could be affected.
Marc Cohodes, a Wall Street investor who issued an early warning about FTX and its CEO, Sam Bankman-Fried, as well as called the collapse of Lehman Brothers in 2008, is among the signatories of a letter to Gallatin County and USA Small Business. The administration wants an investigation into Bridger’s use of capital.
The letter questioned why Bridger presented itself to the federal government as a “socially and economically disadvantaged business.”
“Gallatin County had their name on the bonds and when they default, and they will, lawyers and lawsuits will come after Gallatin County,” Cohodes told the Bozeman Daily Chronicle. “‘Read the fine print’ is not going to be a good defense for that.”
But Sheehy’s campaign pushed back, saying critics of the deal were Democratic supporters of Tester.
“It is clear that Tester’s supporters wrote this letter with one goal: to damage Tim’s campaign, destroy a Montana company and help Jon Tester,” a campaign spokesperson told the Chronicle.
“Briger Aerospace is a good company that protects public lands by fighting wildfires, and we hope that the authors of this letter will cease their efforts to destroy a Montana business, put Montanans out of work, and wipe out the savings of their pension.”
Zach Brown, a Gallatin County commissioner, told NBC he wasn’t concerned the bond money had gone to pay Blackstone.
“It is not our role to monitor the construction and operational decisions of a private company or to communicate a status report to the community on how they are doing,” Brown told NBC.
“Our role is not to monitor whether they have added jobs – it is to support the public interest of their project.”
While Gallatin County is not averse to bond repayments, the county could see its credit rating affected if Bridger were to go out of business. Since Bridger went public in January of last year, its shares are down 64%.
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Bridger reported losses of $77 million in 2023 and was in danger of defaulting on its financial obligations.
“The company has suffered recurring losses from operations, operating cash flow deficits, debt covenant violations and insufficient liquidity to fund its operations that raise substantial doubt about its ability to continue as a going concern,” the auditor said. of Bridger, according to the Montana Free. Press.
The company said in the report that it had started to cut costs and had reduced its workforce to 148 from 166 in 2022.
A Bridger spokesman told NBC that the company has continued to pay interest on the bonds, which are backed by “strong collateral that has appreciated significantly in value since the bond was issued,” and is working to repair its cash flow problems.
Separately, Sam Davis, CEO of Bridger, told the outlet that the company had fought more than 160 fires in Montana since issuing the bonds.
The county’s support for the company, Davis added, had been “tremendous” and allowed the fire company to “contract with numerous local businesses as we expand and operate our business, and provide a strong customer base for local hotels, restaurants and providers. of transport “.
The questions about Bridger come as Sheehy’s service record has also come under scrutiny. The Trump-backed candidate has claimed he was shot in the arm during a firefight in Afghanistan.
But a Montana park ranger has claimed the gunshot wound was self-inflicted in Glacier National Park in 2015. Nor do Sheehy’s fellow soldiers recall him mentioning a gunshot wound or seeing a wound on that time during his service in Central Asia.
Sheehy has insisted that he was shot in Afghanistan and that claims to the contrary are “amount to the false accusation of stolen valor”.
Sheehy has also come under fire for allegedly characterizing Crow Native Americans as “drunken Indians.” He told Fox News last month that they were old recordings and suggested they were edited, the Daily Montanan reports.