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Troy Downing tackles AI scams and bounty hunter reform, addresses his potential run for Congress
Plus: Exploring Missoula's new olive oil emporium.
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In Montana state government, few people, if any, wear as many hats as Troy Downing.
In 2020, Downing—a military veteran and entrepreneur—won statewide election to become Montana State Auditor. Yet the opaque title belies the complexity and eccentricity of his work. For starters, as the Commissioner of Securities and Insurance, he oversees a criminal justice agency that protects consumers against several types of fraud and scams. Downing also sits on the Montana Board of Land Commissioners, and has championed legislation, including this session’s successful House Bill 62, which puts common-sense sideboards on individuals working for bail bondsman, often referred to as bounty hunters.
Notably, this August, Downing and his team conducted the Protect the Big Sky Tour, a twelve-stop journey across Eastern Montana to address senior citizens about the various—and advanced—scams targeting their finances.
In conversation, Downing persuasively pitches his work as non-partisan in nature. But that isn’t to say he avoids politics altogether. He occasionally takes to Twitter to opine on hot-button issues like gun control, America’s support of Israel and “false climate alarmism.” (The state auditor race itself is partisan; Downing ran as a Republican.)
Downing is also considering a run for the eastern district Congress seat, should the incumbent, Rep. Rosendale, take another run for Senate against Jon Tester. In a social media post that hinted at his potential run, Downing praised the incumbent’s efforts to “drain the swamp” in DC and lauded his conservative “Montana values.” Incidentally, Rosendale held the position of State Auditor prior to Downing.
Read on, in our wide-reaching interview, as Downing touches on his work combatting ever-more-advanced scams against seniors and his advocacy for financial literacy, as well as his take on controversial Environmental, Social, and Governance (ESG) investing and his potential run for Congress.
Max: I saw a picture of you on Twitter with a guitar in hand. Are you still playing?
State Auditor Troy Downing: I've played guitar pretty much my whole life. I started collecting guitars from a very young age. I've got some fun ones. I got my grandfather's old 1942 Silvertone. I've got a 1960 Les Paul that’s just an awesome guitar.
I also started making them: acoustic guitars, ukuleles, found object guitars, like from a cigar box, that sort of stuff.
When I used to have more time, [a friend and I] would go around and play in random little dive bars around the state, like the Atlas Bar in Columbus.
I've played a lot of country western, a lot of classic rock. I'm a big fan of Tom Waits.
I feel like we could chat about music all day, but let’s switch gears and talk about the Protect the Big Sky tour. How did it come about, and what were some of your takeaways from it?
A little bit of background first: we are a criminal justice agency, and we investigate and prosecute securities fraud. That can be fairly broad. We regulate multi-level marketing schemes, Ponzi schemes, any kind of securities fraud, a lot of stuff dealing with crypto. About 75% of financial crimes are perpetrated against seniors.
And it makes sense: Montana's one of the older populations per capita in the union. In Montana and nationwide, our senior population is where most of the money is concentrated. These are folks that have worked their whole lives. They've maybe paid off their mortgage, they have retirement accounts, they have access to capital.
And so there's a lot of scammers out there that specifically target them. Somebody who takes advantage of somebody in their golden years who has no ability to make up for losses, I think has a special place in hell.
What we're trying to do is inform and arm the potential victims so that they don't become victims. We've [also] created a financial abuse specialist team within our agency that just deals with financial crime against seniors. And if it's something that's not under our roof, we will find somebody that can help.
Our target [with the tour] was to get out in front of these communities to talk about the scams that we were seeing, the red flags and what they can do to protect their families. Just as importantly, how they can reach out to us for assistance, including investigating, prosecuting.
We also have access to a restitution fund. We can write them checks up to $50,000 from restitution. Just so nobody is confused about this, it's not taxpayer dollars. The lion's share of it is funded through fines that we levy on bad actors.
We estimate about 1 in 44 of these crimes are actually reported. A big part of that is embarrassment. Folks that get defrauded, they're embarrassed. They say, “I can't believe I fell for that.” And they don't think anybody can do anything about it. One of the messages we want to get out there is that there may be something that we can do.
One of the biggest surprises to me [was that] virtually everyone in every one of these audiences had seen at least one of these scams either successfully or attempted to be perpetrated on them.
One [scam] going around the state right now is they'll get access to somebody’s phone or tablet or device, and pop up a little message saying, “We've installed child pornography on your phone and we're calling the authorities, you're gonna get arrested, unless you go to your bank and take out $10,000 and stick it into this crypto ATM.”
They get a lot of victims that way. So my first question when they started popping up is, how many crypto ATMs are there in Montana? There's a lot of them. There's one right here in the CVS on Montana Avenue in Helena. There's like 20 of them in Bozeman. There's 30 in Missoula. There's one of these in virtually every town that we went to on this tour.
My opinion is that these tools are being used by scammers to defraud Montanans.
Have you come across AI being used in scams?
That's a growing thing. And it’s a problem.
The grandkid scam is a really old scam that has a new twist on it: basically somebody pretends to be a grandkid, and they just got arrested in Mexico, and they're gonna get thrown in jail unless they can somehow come up with, you know, $5,000 in gift cards, within ten minutes. Historically, that was done electronically by email or text. Now AI has gotten so good that these scammers can take samples of the kid's voice from their TikTok or their Instagram or whatever social media accounts and completely emulate the kid's voice and accent and everything.
You can get a call from somebody pretending to be your grandkid saying, “Hey, I've gotten in trouble.” They'll try to make sure that the grandparent doesn't say anything. They’ll say, “Hey grandfather, you're my favorite. Please, please don't tell my parents. They're gonna be so mad that I went to Mexico for a weekend,” or wherever it is. So they compel the silence. And the grandparent obviously wants to help their grandkid. They think it's their grandkid on the phone. And they are flattered that the grandkid reached out to them, so they don't call the parents.
What do you do to protect people against these kinds of scams? Some people talk about having a family password or asking a question that only that person would know. But some of these scammers have so much data on you; we've seen some incredibly sophisticated schemes that have happened in Montana. They may have purchased a lot of your personal information.
The other thing is, a lot of people just volunteer all kinds of obscure information. Scammers will put out these social media games, like, tell us your rockstar name is, or tell us the make of your first car, and the color of the house you grew up in. So then, if grandpa says, “Hey, Billy how do I know it's you?” And Billy says, “Oh, of course you know me. We grew up in that green house and my first car was a [inaudible].
A lot of people don't realize that those goofy games out there that you see proliferating on social media are very often just a means for putting together obscure data for that kind of stuff. AI is good today. It's gonna be better tomorrow. It's gonna be undetectable before we know it.
You can have AI that writes AI and that's going to write it faster than humans can. This is going to be a very, very rapid evolution.
Switching gears a bit: You've really put an emphasis on financial literacy programs in your agency. Could you highlight one or two components that you think are particularly impactful in Montana?
We have a lot of a lot of young adults in Montana—and we actually have a lot of old adults in Montana, too—who aren't equipped to be as successful as they could be or should be. We need to start getting to them earlier [than high school]. These middle school students [should] start thinking about money and budgets and finance.
Long before I ever even thought about running for office, I used to go to high schools, junior high schools and colleges, talking about entrepreneurship. And now, later in life, I'm seeing many kids who don't even understand what a checking account is. And in some of the most poorly served communities we have in Montana, we've got kids that have never had a checking account in their family.
We're doing a lot of outreach to tribal communities right now and trying to solve some problems there. The goal is to [educate] these kids on the most basic tenants of finance: What is money? How is it used? How do you save it?
And then getting to the point where they can start to put a little bit of money away. And then, how do you turn it into more money? We’d talk about higher finance and investing and risk tolerance and risk versus rewards.
But you gotta be able to crawl before you can walk and walk before you can run. I sit on the board of the Montana Council on Economic Education, and I'm working really closely with that organization to get some of the tools that they have out there. [For instance], they've got a stock market game where they put together teams from various schools that compete against each other.
You know, we can come up with these programs to help a handful of students, but what I'd much rather see is teacher buy-in. Because if we can start touching these teachers, that teacher then can influence a hundred students. It's a multiplier.
You’ve been critical of ESG [Environmental, Social, and Governance] investing. Can you explain why?
I think there's a lot of knee-jerk reaction against it. We were opposed to the rules that [SEC Chair] Gary Gensler was trying to promulgate, with mandatory ESG reporting. My personal view is if a company wants to provide that kind of information, what I care about as a regulator is that it's not misleading and it's not fraudulent.
But I don't think that should be required to provide. It's difficult, it's expensive, and I thought [Gensler’s proposed rules] were excessive. To the extent that ESG protects investors, I'm all ears. To the extent that it solves a problem that is not a risk/reward profile for an investor I think it's out of his lane.
What scares me is the chance of misuse. Once you start to have somewhat ambiguous reporting that's required, it starts to get used—and I hate to use these terms, it's gonna sound very political—to blacklist or to greenwash something.
We're in a natural resource energy and agricultural state. It worries me what will happen.
The calm minds talking about this—not the reactionary minds, on either side of that argument—also understand that there's an incredible amount of transition risk. Some folks are trying to be very aggressive on this. But I think that everybody agrees that if you flipped that switch and this happened tomorrow, you would basically make it impossible for anybody from the middle down to afford heat, transportation, food. The transition would hurt those least able to handle that. It would price everybody out of everything.
You described the lawyers in the Held v. Montana decision as pushing “false climate alarmism.” Why?
I want reasonable people who can have reasonable conversations and talk about real things. For me, in energy policy—and hopefully this doesn't sound like a buzzword—but “all of the above” is important. Humans are incredibly resourceful and inventive; given the need to improve, they always will. But let's have honest conversations. You know, even the term fossil fuels is a made-up term. That this is the oil of rotting dinosaurs and whatever, it's simply not true.
I think that by having everything compete, we'll find ways of dealing with the cleaner burning of oil and the cleaner burning of gas.
I sit on the board of Land Commissioners, right? And you know, one of the projects that we have, we have a bunch of agricultural land outside of Miles City that we're putting windmills up on. That's a win-win for Montana.
And if you go and you look at them, you say wow, these are impressive. I was actually there as they were putting some of these things up. It kind of reminds me of the slaves going into Rome in the movie Gladiator, and one of the slaves sees the coliseum and says, “I didn't know men could build such things.”
You look at the amount of concrete and gravel and everything else that went in there, and you're going, “Okay, this is not green. It's alternative.” Yes. A hundred tons of gravel and concrete, nine tons of copper, I don't know how many tons of precious metals that, 150 foot fiberglass wings, all the diesel it took to get this across the country. And you've got a 2.8 megawatt generator on there with an expected lifespan of about 25 years.
And I'm going, is that enough to make up for the coal used to cut the steel to make that tower? I don't think so. But I don't want to be in a knee jerk situation where I say, that's bad. I'm just going to say right now it's not green. [But then], next generation, you can do a five megawatt generator or the generation after that you can do a hundred megawatt generator.
The thing about [solar panels] is, they're great for a while, but they degrade every year. The more we work on those, the better they're gonna get over time.
[Note: I found some data and background info on the carbon emissions associated with constructing wind turbines. Multiple sources indicate that coal-generated power created 100 times the emissions, and solar panels create 4 times as much.]
You also worked to reform bounty hunter law in Montana this year. How did that happen?
We've had some pretty high profile cases, like the two [men] accused of murdering somebody in their own home in Butte. In the public interest, we decided that we needed to put some sideboards on that. And so on the bounty hunter side, the fugitive recovery side, we just put some common sense there: you have to be licensed, you have to be trained, you have to notify law enforcement; simple sideboards to make sure that people aren't being shot on their sofa in their own home, just because someone said they might be there.
We definitely rattled some cages getting that through, but I still a hundred percent believe it was the right thing.
I fully did not expect to come across a photo of you and [reality TV star] Dog the Bounty Hunter on Twitter.
I gotta tell you this (laughs). So I was at a meeting and I was flying back, and this is while we were pushing this [bounty hunter] bill through the legislature, and I'm changing planes, and I get off the plane and there's Dog standing there.
I go start talking to him and I said, Hey, you know, we're pushing through some legislation in Montana, to rein in some issues we're having on the fugitive recovery side. I said that we had these guys that ended up shooting somebody in their house in Butte. He said, “Oh, I never used firearms. We only bring non-lethal [weapons] like Mace, tasers, whatever.” I started talking about some of the other provisions, like the requirement to notify law enforcement. [He said], “I always call law enforcement before I do that, because you don't want them showing up and not knowing who the bad guys are.”
I would've never thought in a million years that I agreed with anything with Dog the Bounty Hunter; he was nodding yes on everything we were putting in that bill.
Before we wrap up, I wanted to ask about your potential run for Congress. There may be a fair number of people running for that seat. And I'm just curious, what do you hope a potential voter would associate with you?
I think we have a great culture here [at CSI]. We're doing really good work. I love public service.
People ask me why I ran for office. And I say, it’s the same reason I went into the military: this country's been really good for me, and I want to feel like I deserve it. This office obviously has an expiration date. And I'm not done. I have energy. I have a desire to give.
You can spend your whole day listening to what people say, but look at what they do, how they run an administration. Were they reasonable? Were they smart? Did they listen? Did they represent you?
I grew up in a poor family. I was an unplanned pregnancy of a teenage mom. I had a stepfather for a while, but I mostly grew up in a single parent household. My mom was a checker in a grocery store, and I was successful because of the opportunities I had as an American. We talked a little earlier about financial literacy; I want to make sure that as many people as I can affect have those same opportunities that I did.
This conversation has been edited for length and clarity.
One more thing…
Don’t fear the fancy olive oil, Missoula! I had a lot of fun writing about Tosca, a surprisingly inviting new olive oil and vinegar boutique downtown, for The Pulp.
Thanks so much for being here. In the meantime, you can always reach me via email, the comment section below, or on the Elon Machine, @SavageLevenson.