Montana Department of Commerce Director Scott Osterman resigned Wednesday after an internal investigation found he had filed more than $26,000 in travel expenses in violation of state policy.
The Montana Free Press first reported Osterman’s resignation and details of the expenses and investigation on Thursday. Osterman was appointed by Gov. Greg Gianforte in January 2021 after he took office.
A spokesperson for the governor’s office confirmed Thursday the governor’s budget office “found the director violated state policy related to travel expenses, and the governor took decisive action.”
“He found out about it, had the director pay the amount he owed to the State of Montana in full, and accepted his resignation,” spokesperson Kaitlin Price said in a statement. “The budget office has provided materials related to this matter to the legislative auditor and the Attorney General, and our office and administration will cooperate fully with any investigation.”
Price provided a copy of Osterman’s resignation letter, submitted to the governor at 4:58 p.m. Wednesday.
She said Gianforte has directed the budget office to conduct an internal review of the Department of Commerce and regular review of department directors’ use of state resources in response.
“He also directed the Department of Administration to conduct a training with all agency directors on the lawful and appropriate use of state resources, which was completed,” Price said in an email.
The Daily Montanan requested documents detailing the expenses and probe from the governor’s office but did not immediately receive them Friday morning.
According to the Montana Free Press and Montana State News Bureau, the state budget director told Osterman on Nov. 8 that a review of state resources by cabinet officials found he had racked up more than $26,000 in expenses for meals, lodging, and using his state-issued vehicle for commuting from Kalispell to Department of Commerce headquarters in Helena.
But commutes from a person’s home to headquarters cannot be used as a travel expense. The reports also said the budget director flagged another roughly $4,500 in questionable vehicle maintenance costs charged by Osterman.
The Montana State News Bureau reported Osterman reimbursed the state $30,614.26.
Mandy Rambo will serve as the acting director of the Department of Commerce. She started with the department as a human resources manager in February 2022, then served as acting deputy director starting in September 2022 before being named deputy director in May.
Osterman, from Kalispell, was the senior director of business unit operations at Applied Materials before he was named director of the department. His biography on the department’s website called him a “visionary leader” with broad business experience.
Osterman is the second Gianforte cabinet official to resign this year. Department of Labor and Industry Commissioner Laurie Esau resigned in July after being cited in Missoula for DUI and obstructing a peace officer. She agreed to a plea deal with prosecutors and completed an alcohol and drug program in November.
Osterman’s expense violations are similar to violations found in a state audit of former Secretary of State Corey Stapleton’s use of a state vehicle to travel between his home in Billings to Helena. The Department of Criminal Investigation asked Helena police to investigate, but the department decided to not pursue charges due to the statute of limitations running out.
Fwd_ Osterman resignation
