BILLINGS -- The first intervention for Patrick Davison's heavy drinking and other troubles last August didn't work.

The prominent Billings financial adviser and community activist insisted that he wasn't a drunk and that he could cover his mounting debts.

Two weeks later, three friends and a brother of Davison's tried again. They invited Davison to an attorney's office to sign some legal documents, a pretense for a second and tougher intervention.

The next morning, Davison, who had campaigned for governor two years earlier while secretly conducting the state's largest Ponzi scheme, was on his way to Tucson, Ariz., for a month of alcohol treatment. He was in the secure treatment center three weeks later when FBI agents raided his Billings office.

An hour before Davison entered the treatment center, he called Mike Gustafson, a former energy development partner who participated in the second intervention.

"That was the last time I've ever talked to him," Gustafson said. The conversation was brief.

"Mike, I'm really sorry," Davison told Gustafson. "I appreciate what you've done."

Gustafson co-owns Wesco Resources with his wife. Davison was an officer in a three-person Billings company called Madison Resources LLC, which Gustafson headed. They had worked together to develop the Otter Creek coal tracks in southeastern Montana, but they severed professional ties after the state of Montana charged Davison with securities fraud on Aug. 25, 2006.

A month before the charges, Davison had resigned as treasurer of former U.S. Sen. Conrad Burns' unsuccessful re-election campaign.

In September, he admitted his crimes to the FBI, and on Dec. 20 he pleaded guilty to two federal counts of securities fraud. While awaiting sentencing, he has been working as a car salesman at his brother-in-law's dealership in Medford, Ore.

On July 13, U.S. District Judge Richard Cebull could sentence Davison to up to a decade in prison. In addition, the state has settled charges against Davison for running a massive Ponzi scheme, a fraud in which money from later investors is used to create artificially high returns for earlier investors. Davison agreed to a $250,000 fine and a permanent ban from working in the securities industry.

Money and fame

Davison's friends advance three main theories to explain his brazen deceptions.

The most benign is that Davison was simply overly optimistic. He convinced himself that everything would work out.

Another theory is that he was in deep psychological denial, irrationally believing he could finesse his way out of any problem.

Or maybe, he was overpowered by his ego, having run for the state's highest office despite his closet full of skeletons.

Even as a child, Davison was noted for his Midas touch.

At Montana State University-Bozeman, the Fort Benton native was active in the Sigma Chi fraternity and in 1979 was elected student body president.

After moving to Billings, he worked as an accountant before becoming a financial adviser in 1988 at PaineWebber, now UBS Financial Services.

One of his best friends, Matt McDonnell, who owns Big Sky Collision Center in Billings, said Davison was optimistic, charming and fun.

A tireless volunteer, Davison pulled out his checkbook for many Billings charities, including Mayfair, a fundraiser for the Billings Catholic Schools, St. Vincent Healthcare Saints, the Montana State University-Billings Wine Festival and the Billings Food Bank.

"Pat was a caregiver. He'd give until it hurt. He didn't know how to say no," McDonnell said.

The political sirens also seduced him.

After Davison raised substantial money for Marc Racicot's first election, the GOP governor appointed him to the Montana Board of Regents. During a seven-year term, Davison hobnobbed with the state's most senior power brokers. The governor accepted and returned his calls.

Amid an increasingly busy life, Davison left UBS in March 2003 to set up his own financial business, Davison LLC.

Davison lost his securities license when he left UBS, a fact that wasn't revealed even after he launched his bid for governor, his first political campaign.

In the summer of 2003 while golfing with McDonnell, Davison mentioned wanting to run for governor to "make a difference."

"I was taken aback and I said, 'Are you kidding?' " McDonnell said. "Then I said, 'You've always risen to the top and if you want to, go for it, I'll back you.' "

In the four-way race in June 2004, Davison polled well but lost soundly in the Republican primary. That night, he left it up to his wife, Vicki, to talk to supporters and reporters before finally giving his concession speech at 11 p.m.

Shortly after he was charged with securities fraud, the Davisons divorced.

Flying high? Risking all?

A lover of the good life, Davison arranged fishing, sailing and scuba trips to the tropics with his friends. He and his friends frequently flew to Las Vegas to golf and gamble.

With characteristic charisma, Davison charmed a pit boss into comping rooms, meals and more.

"The pit boss would have a limo pick us up at the airport," McDonnell said. "Pat lived high. He could not live a normal life and not live in the fast lane."

Yet, as Davison's world started closing in on him, friends say he started drinking more -- and drinking alone.

"I think Pat had created such a monster, he didn't know how to handle it," McDonnell said. "I think it was easier to stay secluded and deluded with alcohol than to face reality."

Until the scandal broke last August, McDonnell said he had no clue about his friend's double life.

"Maybe I was so close to him, I didn't want to believe it," he said.

Despite losing money to Davison, McDonnell said his friend is not a thief.

"Was he a big gambler? No. And I never ever thought Pat was an alcoholic," McDonnell said.

Like McDonnell, Gustafson saw trouble in his former business partner only after he was charged.

"There may have been some inkling, but there was a code of silence operating," he said.

Davison also had a reckless streak.

Before he was married, he was speeding in his new Saab along the narrow, curvy road to Absarokee when he crashed.

Mike Smith of Dana Motors, who sold Davison the Saab, said the car apparently rolled end-over-end, the wheels flying off and the door panels breaking loose.

Two female passengers and Davison, then in his early 30s, walked away.

"It was a spectacular crash," Smith said. "I kept the picture on my wall for years as a sales testament to the safety of a Saab."

Surreal morality play

McDonnell said news that Davison conned millions for fake investments was tough to take.

"My emotions have come full circle, from anger, to hurt, to even fear for what's going to happen, to wanting to strangle the turkey, to worrying about his family, Vicki, his daughter and his mother, God bless her," McDonnell said.

One of the fake accounts Davison set up was for the 2002 Mayfair 2/Big Sky Gold Rush Charity Raffle. The Billings Catholic Schools lost $250,000, but Davison's former employer, UBS, covered it.

"They've been thrilled that we've been able to recover that," State Auditor John Morrison said in announcing the settlement.

UBS has paid $4.5 million for its clients identified in the state's case, which is considered full restitution. The balance of the $6 million was lost by individuals not associated with UBS.

Davison's former wife, Vicki, heads the Billings Area Catholic Education Trust and was not implicated in the scandal.

"Catholic leaders placed 100 percent confidence in that man. What the hell happened?" Gustafson said. "Why could he do all these things for so long and then take it to the next level and run for public office?"

McDonnell said not a day goes by that someone doesn't ask about Davison.

"Pat has a strong faith life. He's an intelligent person, and he'll come through this," he said.

Moral choices

In 2005, a front-page photo in The Billings Gazette featured Davison holding the rosary beads that Pope John Paul II blessed during a personal audience in the Vatican. As a young adult, Davison had attended seminary before deciding that life as a priest wasn't for him.

Billings counselor Jim Reynolds said he and Davison have followed similar paths. Both attended seminary, and both have struggled with alcoholism. After working as a Catholic priest for 25 years, Reynolds now counsels substance abusers at Associates in Counseling.

"We all do very strange things under the influence of alcohol," Reynolds said. "It blocks our value systems, it interferes with our judgment calls. Our conscience is dulled."

Alcohol can lead a person to an exaggerated belief in one's own importance, Reynolds said.

Reynolds and his wife briefly invested with Davison at UBS but pulled out when the stock market took a dive five years ago. "And because we were small fish investors with a big-bucks guy," Reynolds said.

Temptation may be especially keen for financial advisers.

"When you see that kind of money, I think it would probably take a very special kind of person not to tap into it for yourself," he said.

Helping to raise six siblings made Davison an adult before his time. Unless he learned to handle the hidden emotional pain, shock from his father's death - in a truck/train collision when Davison was 13 - could have led to destructive behavior, Reynolds said.

"As addictive people, if we do something that creates guilt, exhaustion, frustration, anger or something else we can't manage, we'll use again and it becomes a vicious cycle," he said.

Deep denial also can result from years of pushing moral boundaries and getting away with it, he said, adding that such confrontations were a favorite topic at seminary.

"How many venial sins does it take to make a mortal sin? How far can I go before I break the law?" Reynolds said. "You're supposed to abstain from eating meat on Friday, but how much meat do I have to eat before I break this law?"

No Robin Hood story

Because many of Davison's clients were some of the city's best and the brightest business leaders, Billings attorney George Radovich says some were just greedy. Radovich represents Davison in a handful of civil lawsuits by investors who expected huge profits.

"The returns that were paid to most of those people were way in excess of market rates, and many of these people actually got their money back," Radovich said. "They make it sound like he took the money and hid, but many of the people were on a repayment schedule."

Billings attorney Jay Lansing, who represents Davison on the criminal charges, declined to comment for this story and blocked repeated requests to interview Davison.

As sentencing approaches, Reynolds compares Davison to the Biblical prodigal son who blew his inheritance. Davison needs to admit his problems, humble himself, ask for forgiveness and make atonement, he said.

"I heard that he's not very remorseful, so he might be a difficult person to treat."

Contact Jan Falstad at jfalstad@billingsgazette.com or 657-1306.