WASHINGTON -- The Montana U.S. Attorney's Office is probing the financial connections between Gage LLC, a lobbying firm, and a Missoula space group, a Washington publication reported this week.

The Inland Northwest Space Alliance was created by the University of Montana in 2003 with $3.1 million in NASA earmarks directed to the Missoula campus by then-Sen. Conrad Burns, R-Mont. Burns, who lost a close election in November, now is employed by Gage.

Initially intended to bring space research and space-related jobs to Montana, INSA was the focus of a state legislative audit. It also has been at the center of investigations by the FBI and NASA Office of Inspector General, the Missoulian has reported.

The U.S. attorney's office is now probing financial ties between Gage and INSA, according to the widely respected Washington publication National Journal, which cited two unnamed sources familiar with the inquiry. It is illegal to use federally appropriated funds for lobbying purposes, the report noted.

Gage is run by Leo Giacometto, Burns's former chief of staff. After it was formed, INSA hired Gage as its lobbying firm and for other consulting services.

Between 2003 and 2005, INSA awarded a no-bid contract and paid out about $350,760 to Gage and Compressus Inc., where Giacometto served as vice president and lobbyist, and where Bums' daughter, Keeley, served on the board of directors, the Missoulian has reported. Keeley Burns was not compensated for her role.

The National Journal report said Gage has hired white-collar lawyer Stephen Ryan of the firm McDermott Will & Emery to fend off both the U.S. attorney inquiry and the NASA inspector general probe. It remains unclear whether Burns himself is a focus in either investigation, the report said. Ryan declined to comment.

Missoula attorney Milt Datsopoulos, who joined INSA's board of directors and became chairman of the board in November 2004, could not be reached for comment over several days. The Montana U.S. Attorney's Office said it would neither confirm nor deny an investigation. Gage officials declined to comment and Burns did not return messages left for him at Gage.

Last year Burns said he supported an accounting review of INSA.

"Once funds are appropriated by Congress and distributed to a federal agency and then on to the receiving entity, it's up to those parties to ensure taxpayer dollars are spent properly,'' Burns's spokesman told the Missoulian at the time. "If any of these funds were spent improperly then those responsible should be punished. Taxpayers deserve accountability.''

Like all lawmakers, Burns is prohibited from lobbying for one year after leaving office. In an interview earlier this year he said he doesn't plan to lobby even after that time. He describes his work as that of an adviser and strategist.

INSA, which was spun off from UM's Northern Rockies Center for Space Privatization, began as a for-profit company in 2003 but it became a nonprofit the following year. An accounting review of INSA last year found incomplete employee records, a lack of detailed records on how it spent federal funds, and that its chief executive received three different salaries at the same time.