Scrutiny of Republican Tim Sheehy’s business grows amid US Senate race

Scrutiny is growing about the Montana aerial firefighting company once led by Tim Sheehy, the former Navy Seal and Republican Senate candidate who could oust the Democrat incumbent 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 $160m in bonds. The county was meant to benefit from Bridger's plans to hire more workers and build two new aircraft hangers.

But the company used most of the money, or $134m, from the 2022 bond issue to pay back previous investment from Blackstone, a New York-based investment giant.

Bridger's finances have been complicated by the fact that there were fewer wildfires to fight this year and thus less revenue for Bridger. As of Tuesday, the National Interagency Fire Center reported 42,603 wildfires nationwide this year compared to the 10-year average of 48,689 for the same period.

In financial filings for the quarterly period that ended 30 June 2024, Bridger said it had "a substantial amount of debt" and that failure to service that debt "could prolong the substantial doubt about our ability to continue as a going concern".

A victory for Sheehy in November could hand Republicans control of the Senate, making his connections to Bridger a vital topic as voters head to the polls.

Sheehy, 38, stepped down as the company's CEO in July. He has run his campaign partly based on his business acumen.

The questions around Gallatin county's approval of Bridger's bond deal revolve around whether the board was correctly informed of the company's financial position - it has lost $150m since it was founded - and whether Gallatin's credit rating could be affected.

Marc Cohodes, a Wall Street investor who issued an early warning regarding FTX and its CEO, Sam Bankman-Fried, as well as calling the collapse of Lehman Brothers in 2008, is among the signatories on a letter to Gallatin county and the US Small Business Administration asking for 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' will not be a good defense on this."

But Sheehy's campaign pushed back, saying the deal's critics were Democratic supporters of Tester.

"It is clear Tester's supporters wrote this letter with one goal: to hurt Tim's campaign, tear down a Montana company, and help Jon Tester," a campaign spokesperson told the Chronicle.

"Bridger Aerospace is a good company that protects public lands by fighting wildfires, and it is our hope that the authors of this letter cease their efforts to destroy a Montana business, put Montanans out of a job, and wipe out their retirement savings."

Zach Brown, a Gallatin county commissioner, told NBC he was not worried that the bond money had gone to pay Blackstone.

"It isn't our role to monitor the construction and operational decisions of a private company or communicate to the community the status report of how they're doing," Brown told NBC.

"Our role is not to monitor whether they added jobs - it is to endorse the public interest of their project."

While Gallatin county is not on the hook for the bond repayments, the county could see its credit rating affected if Bridger went out of business. Since January last year, when Bridger went public, its stock is down 64%.

Bridger reported losses of $77m in 2023 and was at risk of failing to meet 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," Bridger's auditor said, according to the Montana Free Press.

The company said in the report that it began cutting costs and had reduced its workforce to 148, down from 166 in 2022.

A spokesperson for Bridger told NBC that the company has continued to pay interest on the bonds, which are backed by "robust collateral which has appreciated significantly in value since the bond was issued" and is working to repair its cash flow problems.

Separately, Sam Davis, Bridger's CEO, told the outlet that the company had battled more than 160 Montana wildfires since the bond issue.

The county's support for the company, Davis added, had been "tremendous" and allowed the firefighting company to "contract with multiple local businesses as we expand and operate our business, and provide a strong customer base to local hotels, restaurants, and transportation providers".

Questions around Bridger come as Sheehy's service record also has 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 that 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 at the time during his service in central Asia.

Sheehy has insisted that he was shot in Afghanistan and that claims to the contrary are "tantamount to falsely accusing him of stolen valor".

Sheehy has also come under attack for allegedly characterizing Crow Native Americans as "drunk Indians". He told Fox News last month they were old recordings, and suggested they were edited, reports the Daily Montanan.