Montana AG launches probe of jail deal

Company in deal with city is headed by a convicted felon with fraud history

	Albert Peterson with the Two Rivers Authority stands outside an empty jail that Hardin, Mont. built for $27 million. The authority wants a California security company, American Police Force, to take over the facility. View related photos
Matthew Brown / AP

updated 9:30 p.m. ET, Thurs., Oct . 1, 2009

BILLINGS, Mont. – Montana’s attorney general launched an investigation Thursday into a California company that wants to take over an empty jail in the rural city of Hardin, following revelations that the company’s lead figure is a convicted felon with a history of fraud.

Michael Hilton, who formed Santa Ana, Calif.-based American Police Force in March, came to Hardin last month promising to fill the city’s never-used jail and build a large military and law enforcement training center.

Hilton has a decades-long track record of fraudulent activities and spent several years in a California prison on grand theft charges. A native of Montenegro, he uses at least 17 aliases.

Citing “significant concerns” about the city’s dealings with American Police Force, Attorney General Steve Bullock asked Hardin economic development officials to produce by Oct. 12 all documents related to their dealings with the company.

His office made a similar demand of American Police Force, including information that would back up Hilton’s claims of multiple defense contracts with the U.S government and other agencies.

Deal was reached last month
The launch of the investigation came as some Hardin officials began backing away from American Police Force. The city’s Two Rivers Authority reached a 10-year deal on the jail with the company last month.

But that was never ratified by US Bank, the trustee on the construction bonds used to pay for the 464-bed facility.

Attorney Becky Convery, who helped negotiate the deal, said Hilton overstepped his bounds when he showed up in Hardin last week with three Mercedes SUVs marked with fictitious “Hardin Police Department” logos.

He pledged to donate the SUVs to the city and also offered to provide law enforcement for Hardin for $250,000 a year. That prospect has stirred suspicion among critics that rural Hardin, population 3,500, could be transformed into a privately run police state.

Convery said Two Rivers director Greg Smith had a tentative deal with Hilton’s company to provide law enforcement service, but she said it was never finalized and she was uncertain whether it would be legal.

“We are not at all pleased with American Police masquerading as if they were the police for the city of Hardin,” she said.

Yet other Hardin officials remained loyal to American Police Force despite knowing little of its origins beyond what they’ve been told by Hilton.

“I don’t know that his background has affected his position or his ability to do his work,” said Carla Colstad, a member of the Hardin City Council. “I don’t consider it relevant to what’s going on today.”

Hilton — who came to Hardin last week in a black, military-style uniform — portrayed his company as an international player in the security industry. No records have been found of the extensive U.S. government contracts he claims.

History of fraud and criminal activity
Instead, documents and interviews with Hilton’s associates revealed a history of fraud and criminal activity. That includes outstanding judgments against him in three civil cases totaling more than $1.1 million.

“Such schemes you cannot believe,” said Joseph Carella, an Orange County, Calif., doctor and co-defendant with Hilton in a real estate fraud case that resulted in a civil judgment against Hilton and several others.

Possibly Related Posts:

• GORDON DUFF: AMERICA’S WAR RACKETEERS, THE REAL TERRORISTS
• A Two-Tier Internet?
• The Government’s New Right to Track Your Every Move With GPS
• The Government’s License To Steal
• Report–Obama demands access to Internet records without court review

The House of Representatives today followed last week’s Senate move to cut the funding for the F-22A fighter jets, as called for by the Pentagon and the Obama Administration. They remained firmly committed, however, to spending billions of dollars on other pet military projects that the Pentagon didn’t request and the White House insists aren’t wanted.

The White House has hinted at the possibility of vetoing the bill over some of the expenditures, but there is considerable political momentum among Congressmen to ensure that big budget defense contracts that will help key constituencies in their home districts are continued, irrespective of whether what is being created is actually going to be used for anything.

One of the key disputes is over the VH-71 Presidential Helicopter, which Congress intends to spend another $400 million on building in Rep. Hinchey (D – NY)’s district. President Obama says he doesn’t want the helicopters, and Secretary of Defense Robert Gates has mocked the elaborate helicopters for needless features.

The administration has sought to divert money from high-concept weapons programs to equipment that will actually be used in the current military occupations. The requested amount was still a significant increase in the overall budget, and Congress has increased it even further.

Possibly Related Posts:

• GORDON DUFF: WIKILEAKS, A CIRCUS WITH NO ELEPHANTS
• Record Heat And Massive Wildfires Are Causing Panic Throughout Russia And Are Driving World Food Prices Through The Roof
• Glenn Beck’s Lincoln Contradictions
• A Century of War: Anglo-American Oil Politics and the New World Order
• General ‘Tried to Cover Up Truth About Death of Rachel Corrie’