Oregon Lawmaker Accused of Diverting Money from A Defense Contractor to Bankroll GOP Candidates

State Sen. Brian Boquist (R-Dallas) allegedly misappropriated "thousands of dollars" from a U.S. military contractor and funneled the money to Republican Party candidates and causes in Oregon, according to a federal lawsuit filed by Boquist's former business partners.

The partners allege that Boquist forced them out of the company, called ICI Wyoming, in December, and that they subsequently learned that he and his wife, Peggy, had been secretly draining money from the company to pay their personal expenses and fund GOP candidates' campaigns.

Boquist, 53, an Iraq war veteran, was first elected to the Oregon Legislature as a Representative in 2004, after running unsuccessfully against then-U.S. Rep. Darlene Hooley (D-OR).

He has ownership interests in several businesses, including an ammunition factory in Baker City and a cattle and timber company in his Polk County home in Dallas, according to his disclosure forms filed with the state.

But Boquist's principal business, founded in the early 1990s, is International Charter Incorporated (ICI), a security contractor  that provides aircraft and personnel to the Defense Department, the State Department, and non-governmental aid organizations working in hot zones around the world.

ICI runs a military training complex in Wyoming, where it conducts live tactical exercises featuring rocket-propelled grenades, mortars and simulated truck bombs. The Wyoming branch of the company, founded in 2007, was awarded a subcontract for training U.S. Marines through another contractor, Defense Training Systems, an Alaska Native corporation. The subcontract, according to the lawsuit, is worth an estimated $2 million a year through April 2013.

The complaint was filed this Jan. 31 in U.S. District Court in Oregon by former ICI vice president and co-owner Danny O'Brien and his wife, Lorrie, who live in Lakewood, Wash. The lawsuit names Boquist; his wife, Peggy; and their business partner, Marcus Hines of Arizona, as defendants.

The complaint says Boquist forced the O'Briens out of the firm, ICI Wyoming, at the end of last year, following a disagreement over the direction of the company.

After Boquist forced the O'Briens out, the complaint says, the company's bookkeeper resigned. The bookkeeper, lawsuit says, then provided the O'Briens with evidence that Boquist and his wife had been secretly diverting money from the firm to other projects, including a new company they had started in 2008 called Powder River Cartridge Company, LLC.

Through this new company, the complaint says, "the Boquists directed thousands of dollars of revenue generated by ICI Wyoming to their own use and without [the O'Briens'] knowledge or consent, including but not limited to political campaign contributions for causes supported or advocated by Defendant Brian Boquist, in his capacity as an Oregon State Senator."

State campaign finance records show Powder River Cartridge Company, LLC has donated $18,700 to candidates and causes supported by Boquist since 2008, including $10,000 to a Boquist-led committee opposed to Measures 66 and 67, which increased taxes; some $6,200 to a committee supporting Benton County Republicans; and $500 to the campaign of Polk County Commissioner Craig Pope.

Records also show that Boquist loaned or donated at least $30,000 of his own money to the anti-tax committee, the Boquist Leadership Fund, in 2010. Another $45,000 from Brian and Peggy Boquist has gone to Oregon candidates since 2008, including the failed gubernatorial campaign of Chris Dudley; the reelection campaign of state Rep. Jim Thompson (R-Dallas) and the Polk County Republican Central Committee.

Boquist is currently chairman of the Senate Veterans' and Military Affairs Committee.

He didn't respond to WW questions about the lawsuit. His wife, Peggy, declined to discuss the case and referred questions to Boquist.

The O'Briens' attorneys, Charles Markley of Portland and Jason Whalen of Tacoma, Wash., also declined comment. Their lawsuit seeks a judgment and punitive damages exceeding $75,000, a full accounting of the records of ICI Wyoming and the appointment of a custodian to take over the company, because "those in control of the corporation are acting fraudulently."