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Selfish Sheehy Faces Campaign Karma
If you though it was bad enough for Tim Sheehy to earn millions running a Montana company that charges US taxpayers to put out wildfires caused by the climate change that the $4 billion oil and gas pipeline company run by his older brother, Matt, helps to create, think again.
Tim and Matt also made tens of millions abandoning the employees of another of their Montana companies. That happened when they sold their company to the US government/military contractor CACI (informally pronounced khaki) that supplied civilian interrogators who abused (arguably tortured) Iraqi detainees in Abu Ghraib prison during George Bush’s deceptively-promoted, under-resourced, and ill-fated US invasion of Iraq.
On April 15, 2024, a jury trial will begin in the federal District Court for the Eastern District of Virginia to decide CACI’s corporate accountability and financial liability associated with the Abu Ghraib scandal. Now a huge corporation, CACI has been fighting in court for over 15 years arguing mainly not about whether the abuse or torture happened (some of them are on tape), but rather whether and how much three of the innocent Iraqi detainees should be awarded as damages for CACI’s illegal conduct, conduct that has triggered over 20 years of PTSD in the detainees.
After the sale, Tim went on a buying spree, purchasing luxury Montana resort properties and a 20,000 acre Montana ranch (the cowboy hat and the horse were extra). Now the CACI employees Tim abandoned are left to face the stigma of working for a company whose name will once again be dragged through the mud, as it was at the time of the publication of the terrible photographs of the Abu Ghraib scandal we all saw in the media. The Montana election will be held on June 4, 2024 and the general election will be held on November 5, 2024. So, during his campaign, Tim will now be distracted not only by the lawsuit filed against him for crashing an airplane into a US home as a student pilot, but by a trial smearing the innocent CACI’s employees he has left behind as he got rich. The karma chickens have come home to roost, right in the middle of Tim’s campaign.
Both of the companies that Tim and Matt founded were designed to enrich Tim. Matt and Blackstone, Inc., an early MAGA-connected investor in (at least) the wildfire fighting company, set up the companies to “groom” Tim to look like a successful businessman. No political contributions were necessary to enable Tim to “self-finance” his campaign to become Montana’s next junior US Senator. Montana’s current junior US Senator, Steve Daines, and Trump (who are tied in the smarts department) either to have had the wool pulled over their eyes or to have looked the other way in anointing Tim as the MAGA candidate in the race.
Montana voters want authenticity and competence in their elected leaders. Jon Tester fits that bill. Tim does not.
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As a veteran, I respect Tim Sheehy’s service to our Constitution and his willingness to pilot wildfire fighting aircraft, but I believe his serving as one of Montana’s US senators would be inappropriate for the reasons given below.
Betting on Climate-Change-Driven Increases in the Wildfire Suppression Market
Republican and Trump supporter Tim Sheehy wants to take the job of Montana’s very effective Democratic senior US Senator, Jon Tester. Tim is a major shareholder in his aerial wildfire fighting business, which is now a publicly-traded corporation. This article looks at whether Tim’s business dealings would be appropriate for a US Senator.
After Tim earned a BS degree in history at the US Naval Academy at Annapolis, his career as a Navy SEAL was cut short (medically terminated) by an training-related injury in Hawaii. When Tim moved to Montana in 2014, he, with his older brother, Matt, founded two businesses, one of which was Bridger Aerospace LLC. Privately-owned Bridger Aerospace LLC rented crewed airplanes to the Federal government for use in fighting the wildfires that are becoming more frequent and devastating due to climate change.
Because veterans owned at least 51% of the LLC and Tim was in control of the day-to-day operations of the business and served as the highest-ranking officer of the business (CEO), the firm qualified as a veteran-owned business, giving it a competitive advantage in bidding for Federal contracts. Businesses owned by service-disabled veterans are granted additional advantages over their competitors. Those advantages do not explain how the LLC was reportedly able to “undercut [its competitors’ bids] by 30 to 40 percent and buy aircraft to flood the market with very little profit motive.” Nor does it explain that why “there are three other small Air Attack [fire surveillance] companies in [USFS] Region 1 who have thrown in the towel since Bridger showed up on the scene.”
Company Reported Significant Losses in 2021 and 2022
Company Merged with an Invested-owned Blank Check Company in 2023
In January 2023, the LLC merged (combined with) a SPAC called Jack Creek Investment Corp. to form a publicly-traded business called Bridger Aerospace Group Holdings, Inc. (Bridger) (Jack Creek Road is the “back door” access to Big Sky and Moonlight Basin luxury resorts from the Madison Valley.) SPACs are known as “blank check” companies because they raise money from investors to buy a private company before identifying who they intend to target. Once the SPAC decides on and discloses its target, it works to merge with that company and bring it to the public stock market, avoiding a more traditional initial public offering, or IPO. The merger with Jack Creek infused a reported up to $345 million into Bridger. The initial price of a Bridger share collapsed from $22.08 per share to a low of $3.67 per share in early February 2023.
In May 2023, five officials and directors of the business purchased a combined total of $3.7 million of Bridger stock, with Tim purchasing $1.4 million of the total. Matt, a successful businessman and CEO of an oil and gas pipeline company (Tallgrass Energy), at one point owned 21.4 percent of Bridger stock, worth about $55.8 million. Bridger later reported that Blackstone Inc. (discussed below) was an early investor in the LLC.
Tim and Matt Sell Ascent Vision to Military Contracting Firm Being Sued for Torture
We can only wonder if any of the cash for some of these stock purchases (or other of Tim’ assets) was derived from the sale of the other business that Matt and Tim founded (Ascent Vision Technologies LLC) for a reported $350 million to a military contracting firm called CACI International in year 2020. CACI became infamous for supplying “a total of three dozen [civilian] interrogators” (page 155) of which no “more than ten interrogators [were] assigned and working at Abu Ghraib prison” in Iraq during the Iraqi detainee abuse scandal in 2003. Twenty years after information on “three CACI employees was forwarded to the army general counsel for determination of whether they should be referred to the Department of Justice for possible prosecution,” (page 415) CACI is still in court defending lawsuits brought by allegedly abused Iraqi detainees. (12) [In his 780 page book entitled Our Good Name, CACI’s retired-Navy CEO Jack London asserted that “none of CACI’s people were in the abuse pictures” taken at Abu Ghraib in 2003 and aired in April 2004. (page 178) Neither were CACI employees shown in the photographs of an Iraqi detainee taken at Abu Ghraib after his capture and initial interrogation by the Navy SEALs, further interrogation by the CIA, and death in 2003 that was labeled a homicide.] Ironically, the subtitle of chapter 24 of the 780 page book Our Good Name is “Methinks thou does protest too much.” (page 291)
Company Purchased Additional Super Scoopers at $32 Million Each
In the first half of 2023, Bridger made significant capital investments in airplane hangars, additional Canadian-built fire-suppression aircraft called Super Scoopers (at $32 million each) and in the acquisition of a second smaller company that rents crewed smaller aircraft to federal, state, and provincial governments. Bridger reported a net loss of $63.7 million in the first half of 2023 compared to a net loss of $19.4 million in the first half of 2022. The 2023 net loss was attributed to the fact that “considerable winter snowpack and wet spring conditions pushed out the start of the US wildfire season by approximately six weeks.” Tim appeared to be hopeful that the delay in the start of the wildfire season would “push the core wildfire season into the fourth quarter,” allowing the business to meet its financial goals. Would that sentiment sound appropriate coming out of the mouth of a US Senator?
Company Burns Through Its Cash in 2023
Bridger’s net losses totaled over $100 million through the first six months of 2023. During the first half of 2023, Bridger had a net cash “burn rate” of over $5 million per month. At the end of the first half of 2023, Bridger had a total cash balance of about $25 million and its outstanding invoices totaled about $12 million. So, at that point, Bridger’s cash reserves would be exhausted in five months (or seven months if its invoices were paid in time) unless Bridger borrowed more cash (adding to its over $200 million of debt, which includes $160 million in taxable municipal bonds) or sold more stock (thus diluting the value of its existing stock). At that point in time, Tim was in a challenging spot as Bridger’s CEO.
Right on schedule (on October 17, 2023), Bridger announced that it was planning to sell of $70 million more of its common stock to the public. Bridger stated that it intended “to use the net proceeds of the offering to finance the cash purchase price for four additional Super Scooper aircraft from the Spanish government and for the previously announced acquisition of Bighorn Airways, Inc., and the remainder for general corporate purposes, including funding the upgrade costs for the acquired Super Scoopers and other working capital needs.” Then, a week later, oops, Bridger terminated the planned offering “due to market volatility and conditions” (that included Bridger’s stock price dropping to $4 after news of the stock offering was released).
Company Has Few Controlling Shareholders Including Blackstone Inc.
The prospectus for the terminated offering revealed that “as of September 30, 2023, the executive officers of Bridger and Mr. Matthew Sheehy (a co-founder and director of Bridger and the oil and gas industry brother of Mr. Timothy Sheehy, the Bridger CEO), collectively beneficially own 41.3% of the outstanding Common Stock, assuming no shares of Series A Preferred Stock have been converted.” and “In addition, the BTO Stockholders collectively beneficially own 21.5% (assuming no shares of Series A Preferred Stock have been converted) of the outstanding Common Stock as of September 30, 2023.” and “BTO Stockholders” means “certain direct and indirect equity holders of Bridger Aerospace Group Holdings, LLC that are affiliates of Blackstone Inc.” and “As of September 30, 2023 there were 60 holders of record of our Common Stock and 4 holders of record of our Warrants.”
Company Continues to Burn Through Its Cash in 2023
Bridger’s net losses totaled over $94.8 million from the beginning of 2021 through the first nine months of 2023. During the first nine months of 2023, Bridger had a net cash “burn rate” of over $4 million per month. At the end of the first nine months of 2023, Bridger had a total cash balance of about $34 million and its outstanding invoices totaled about $25 million. So, at that point, Bridger’s cash reserves would be exhausted in six months (or 11 months if its invoices were paid in time) unless Bridger borrowed more cash (adding to its over $200 million of debt, which includes $160 million in taxable municipal bonds) or sold more stock (thus diluting the value of its existing stock). In its third quarterly report for 2023, Bridger reported that it was backing away from acquiring the second smaller crewed airplane company mentioned above. This decision reduced Bridgers’ near-term cash needs and providing cash to cover “off-season” cash losses in 2024.
For the first nine months of 2023, Bridger’s fire suppression revenue (mainly from renting crewed Super Scoopers) comprised 86 percent of Bridger’s total revenue, with 13 percent of Bridger’s total revenue comprising aerial surveillance revenue. Because Bridger’s smaller competitors provide only aerial surveillance and Bridger’s insider and Wall Street investors are allowing Bridger management to incur large net losses, it is easy to understand why Bridger can underbid those smaller competitors.
Piloting Super Scoopers Is Dangerous Work
Americans have great respect for our first responders, especially firefighters, and rightly so. Piloting a Super Scooper airplane, like Tim and Bridger’s employees do, is dangerous work, with 14 of the aircraft having crashed to date, leaving a world-wide fleet of about 160. That is one reason why Bridger appears to be one of only four “for-profit” businesses in the world in the crewed super scooper rental business, with essentially all of the other super scoopers being owned by governments. And the stockholders of Bridger (for good or for bad) may be at the forefront of the rise of a privatized and profitable aerial fire suppression industry, along the lines of the privatized military industry described in the book Corporate Warriors.
Tim Joins the Ranks of the American Oligarchs of Boz Angeles
Tim understands the risky nature of (and liabilities associated with) piloting twin-engine seaplanes, having been a student pilot in one of them that crashed, killing his instructor. Tim and all of Bridger’s other pilots are to be admired for taking on that risk to life and limb in fighting wildfires for the benefit of the public. Tim recently already purchased (with Matt and another veteran) a 20,000-acre Montana ranch and a cowboy hat (Little Belt Cattle Company) and multimillion dollar luxury resort mansions (on Flathead Lake and in Big Sky), joining the ranks of the American oligarchs of Boz Angeles and other “groomed” Republican candidates who are able to “self-finance” their political campaigns.
Blackstone’s Chief Executive Is MAGA Supporter
Tim’s reported total yearly compensation is $4.90 million, comprised of 9.2 percent salary ($450,800) and 9o.8 percent bonuses, including company stock and options. He directly owns 18.68 percent of Bridger shares, worth $71.07 million. As a Director, Matt’s reported total yearly compensation is $1.83 million and he owns 18.27 percent of Bridger shares. Individual Bridger insiders own 52.3 percent of Bridger shares, a venture capital/private equity firm (Blackstone Inc., an early investor in Bridger when it was a private LLC) owns 21.5 percent, institutions own 11 percent, private companies own 8 percent, and the general public own 7.3 percent. Blackstone’s Chief Executive Stephen Schwarzman is “Wall Street’s top political donor” and “has been an ardent supporter of Trump and Republican causes.” Does that sound like “grooming” to you? (23) After Blackstone, Spain-based energy-gas corporation Enagás, and others recently took Tallgrass Energy private at a cost of $4 billion, Tim’s brother Matt returned to Tallgrass as CEO.
Get Rich Quick Tim Would Have a Conflict of Interest If Elected
As a candidate seeking to be Montana’s junior US Senator, however, Tim faces an ethical dilemma. How can Tim, as a major shareholder in Bridger, not face an apparent (or real) conflict of interest as a US Senator? How can Tim abandon the Bridger employees and stockholders (including the brother who arranged for Tim to get rich quick) as they struggle to make Bridger profitable and climb out from under the large debt burden that Bridger faces? Most Americans want to stop the human-caused climate change that is increasing the extent and destruction of wildfires, and (ironically) increasing the size of the aerial wildfire suppression market. Bridger uses the fact that climate change is increasing its potential market in selling shares of the business to investors. This conflict of interest is compounded by the fact that Bridger’s contracts with Federal agencies produced over 99 percent of Bridger’s revenue in 2022.
If Tim cannot see the conflicts of interest he will face if he becomes a US senator, then the voters of Montana will have to let him know that they do see the problem and encourage him to focus on his current day-to-day responsibilities, including moving Bridger and Little Belt Cattle Company towards profitability. Tim’s book, Mudslingers, was released on December 12, 2023. In his 2023 political contributions, Tim describes his employer as “Little Belt Cattle Company” and his occupation as “cowboy.” If Tim takes Jon’s place, he will reportedly be one of the wealthiest members of Congress. You can review Tim’s reported assets and sources of income here.
Cautionary notes:
The financial analysis presented above is based on the documents Bridger has filed with the SEC. In Bridger’s initial Quarterly Report for the first quarter of 2023, filed with the SEC on 5/12/2023, Bridger management stated: “Our management evaluated, with the participation of our current chief executive officer and chief financial officer (our “Certifying Officers”), the effectiveness of our disclosure controls and procedures as of March 31, 2023, pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our Certifying Officers concluded that our disclosure controls and procedures were not effective as of March 31, 2023, due to the material weaknesses described below. . . . We have identified material weaknesses in our internal control over financial reporting, which we are in the process of, and are focused on, remediating. The first material weakness is related to properly accounting for complex transactions within our financial statement closing and reporting process. , , . Although we plan to complete this remediation process as quickly as possible, we are unable, at this time, to estimate how long it will take and our efforts may not be successful in remediating the deficiencies or material weaknesses. . . . ” Similar statements were made in Bridger’s Quarterly Reports for the second and third quarters of 2023. So, apparently, outside investors are supposed to take Bridger’s financial statements “with a grain of salt.” Or are these words what Trump calls a “worthless statement clause”? Tim is one of Bridger’s Certifying Officers.
