BREAKING: Washington Post: Sheehy Lied About Business Success; Made Millions While His Company Was “Bleeding Cash”
FOR IMMEDIATE RELEASE
Saturday, August 10, 2024
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rehm@mtdems.org
On the campaign trail, Sheehy said: “If my business isn’t doing well I don’t get paid.” But “amid Bridger’s significant losses, Sheehy has received millions of dollars in compensation”
Helena, MT – Breaking reporting from the Washington Post uncovered more of Tim Sheehy’s mounting lies about his business record and the lengths his company went to in order to generate cash.
This is the second major report in two days that reveals details about how Tim Sheehy lied about his business success during his political campaign and made millions of dollars while his company faced high losses, the resignations of multiple board members, inaccurate books, and risk of defaulting on its debt.
While describing his company as “a success story” in his political campaign, the report reveals Sheehy’s company is facing “a cash crunch so dire that there is ‘substantial doubt about the Company’s ability to continue’, according to public filings.” But as the company struggled, “Sheehy has received millions of dollars in compensation” – including multimillion-dollar bonuses.
This follows yesterday’s investigative reporting from NBC News which revealed that Sheehy misrepresented his business as a “social and economically disadvantaged company” in an effort to win contracts, and directed the vast majority of a $160 million Gallatin County bond to pay out investors rather than planes and hangars as intended.
Previous reporting has also detailed how Sheehy lied about how he started his business, and how his heavy reliance on government contracts could create conflicts of interest.
Read more:
Washington Post: Montana GOP Senate candidate touts his business. It’s losing millions
August 10, 2024
Beth Reinhard and Jonathan O’Connell
As he campaigns…Sheehy recounts how he started an aerial firefighting business in his barn and built it into a publicly traded company
“That’s a success story,” [Sheehy] said in a June television interview. Reports filed with the Securities and Exchange Commission in recent months tell a different story about Bridger Aerospace.
Bridger is facing a cash crunch so dire that there is “substantial doubt about the Company’s ability to continue,” according to public filings that show the company lost $77.4 million last year and $20.1 million in the first three months of 2024. Several directors have left, including one who flagged concerns about internal auditing, as an unusually slow wildfire season in 2023 put the company at risk of defaulting on its debt.
And then last month, Sheehy said he couldn’t devote enough time to running the company and resigned — a move that Bridger, which had promoted his key role in “every facet” of the business, previously said would happen if he was elected to the Senate.
“The business has disappointed,” said Vince Martin, a North Carolina-based investment analyst and blogger who has examined the SEC filings. “As a result, they don’t have a ton of room for error.”
[Sheehy’s] first campaign for public office has exposed some potential vulnerabilities.
Sheehy…has faced scrutiny over an incident involving a firearm in Montana’s Glacier National Park in 2015.
Documents show Sheehy told a park ranger at the time that he accidentally shot himself in his right arm and the wound was treated at a hospital.
Sheehy told The Washington Post he did not shoot himself but had lied to the ranger, a federal law enforcement officer, to protect him and his platoon-mates from a potential military investigation into an older bullet wound he said he got in Afghanistan in 2012.
He has talked about being shot in the arm in combat while campaigning.
He has also emphasized his business experience, telling voters that he has signed “the front of the paycheck, not just the back” while condemning Congress for the ballooning national debt.
“I’m a business owner,” Sheehy said during a March campaign event. “If my business isn’t doing well, I don’t get paid.”
Yet amid Bridger’s significant losses, Sheehy has received millions of dollars in compensation.
He received a $2.3 million bonus on top of a $149,000 base salary in 2023, according to SEC filings, and a bonus of $4.4 million and a $450,000 base salary in 2022, as the company lost $42.1 million.
Sheehy received additional income leasing two planes to Bridger and co-owning a business that provides flight training, SEC filings show. Sheehy also sold a plane to the company for $3.9 million; the filings don’t detail if he turned a profit or loss.
“[...] it doesn’t look great,” said Dhierin-Perkash Bechai, an analyst at AeroAnalysis International, which covers the aerospace and defense industries, referring to Sheehy’s bonuses and additional income from Bridger. “While the company is bleeding cash, Sheehy is still making money.”
At the Friday rally with Trump, Sheehy said he had created hundreds of jobs and called Bridger “a Montana success story.”
[Director] Debra Coleman quit the board, effective immediately — “a result of the functioning of the Board’s Audit Committee,” she wrote in a brief resignation letter in September, referring to a panel that typically reviews financial disclosures for accuracy.
One month after Coleman’s departure, the company canceled a public offering and plans to buy an aircraft company after a sharp decline in its stock price.
Bridger’s annual report for 2023 reflected significant challenges: more than $211 million in debt, the possibility of default on the $160 million bond deal and a violation of the terms of a $12.9 million bank loan.
“Our liquidity position raises substantial doubt about our ability to continue as a going concern,” the report said. “We have incurred significant losses since inception, and we may not be able to achieve, maintain or increase profitability or positive cash flow.”
In another potentially troubling sign, the company said it had “identified material weaknesses in our internal control over financial reporting.” In other words, the company could not guarantee that its books were accurate.
When Montana-based media outlets covered Bridger’s poor financial performance, the company pushed back at what it called “politically motivated attacks.”
But in another indicator of the company’s hunger for cash, Bridger raised $9.2 million in April by selling common stock to directors and executive officers — a quicker and less expensive way to raise money than selling to the public, analysts following the company said.
Two directors, Todd Hirsch, a Blackstone senior managing director, and McAndrew Rudisill, Bridger’s chief investment officer, resigned on May 31 from Bridger’s board.
Sheehy stepped down from the company on July 1, saying, “This exceptional team deserves a fully focused CEO during its busy fire season.” The new executive chairman said the board “has been preparing his possible departure,” though company filings had previously said Sheehy “will resign as Chief Executive Officer if he is elected to U.S. Senate.”
Sheehy, who is now campaigning full time, has a net worth spanning $102 million to $297 million, according to an analysis of his financial disclosure filed in June.
He owns a home in Bozeman that property records show is valued at about $2.5 million, a 20,000-acre cattle ranch, rental property in Big Sky, Mont., and cabins in Polson, Mont.
The company’s July 1 report to the SEC notes the continued pressure to raise cash and the purchase of another aerospace company for $17.5 million. It also addresses the “material weaknesses” noted in the annual report, saying Bridger did not misstate its overall financial position.
Bridger, though, has less than $8 million in unrestricted cash as of the end of March — in violation of the requirements of the bond deal — and has reported that it might not be able to meet the minimum cash threshold over the next 12 months. Stock sold 18 months ago at $10 per share closed Friday at $3.27.
“They’ve simply got to start generating cash,” Martin said. “That’s going to be tough — but it’s possible, particularly if they get a strong fire season … It’s a very narrow path right now.”
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