HELENA -- Republican Sen. Conrad Burns announced a $1 million federal contract in 2003 for a company that employed his former top aide as a lobbyist and which put Burns' daughter on its board of advisers two months after the senator announced the money.

The contract was pitched as a way of bringing high-tech research to Montana's universities through a company called Compressus, a Washington, D.C. software firm. Officials at both Montana State University and the University of Montana said this week they have no record of the schools ever getting any of the money.

Spokesmen for Burns refused to answer questions about the senator's role in securing the money.

Burns announced a $1 million federal contract for Compressus in a March 2003 press release. The money was awarded to the U.S. Air Force for research and development. Compressus got the $1 million contract to demonstrate its software for the Air Force, according to the release. UM and MSU were to conduct the research.

The Burns' press release said the president of Compressus worked with Burns to bring the research to MSU and UM.

News of the grant was announced in Burns' press release entitled "Burns Takes Lead in Bringing Digital Technology Research to Montana."

Keely Burns, the senator's then 32-year-old daughter and a physician in North Carolina, was named to the Compressus board of advisers two months later in May of 2003, said Dale Curtis, a spokesman for Compressus. She served on the board for one year.

Curtis said Compressus board of directors ratified her membership in mid-June of 2003.

Keely Burns had a contract with the company that promised her stock options for serving on the board, said Jason Klindt, a spokesman for Burns' 2006 re-election campaign. However, Keely Burns never exercised her stock options, he said, and the time allowed for doing so expired. Keely Burns ended up receiving nothing for her time with the company, Klindt said.

Klindt and representatives of the company both refused to provide Lee Newspapers with a copy of the contract.

Keely Burns issued a statement about her involvement in the board though Klindt:

"I joined the advisory board at Compressus because their product was exciting and interesting," her statement read. "Sometimes we do things for the love of them and for the excitement of being part of something new and exciting. That's what my involvement with Compressus was."

Keely Burns said Compressus' technology was exciting to her "as a family doctor in a small town. And that's why I got involved. I never made a dime."

Leo Giacometto, Burns' former chief of staff, was named a senior vice president at Compressus in June of 2002, according to a Compressus press release. Giacometto is listed as one of four of the company's registered lobbyists in 2003, Senate records show.

The company spent $150,000 on lobbying that year, records show.

Giacometto recruited Keely Burns to serve on the board, according to a resume of hers prepared sometime after 2002. The resume lists Giacometto as one of Keely Burns' references.

Lee Newspapers obtained the resume through Dr. Burns' involvement in the Northern Rockies Consortium for Space Privatization, a University of Montana group. Keely Burns was also a member of the space consortium board, according to the resume.

Giacometto did not respond when asked why he recruited Keely Burns to the Compressus board.

Keely Burns is a medical doctor in North Carolina. She graduated from medical school in 1997, according to the resume, and finished her medical internship and residency in 2000.

Curtis wrote in an e-mail to Lee Newspapers that Keely Burns "offered her input on the medical applications of Compressus' data-compression technology from her perspective as a family physician serving in rural communities."

Keely Burns was a physician at a clinic in Sanford, N.C., her resume shows. Sandford is about 40 miles from Raleigh, with a population of more than 326,000.

The contract was to test Compressus software that could send large digital files like X-rays over less-advanced Internet connections without losing the crispness of the image.

Curtis wrote in an e-mail to Lee Newspapers that the contract was with the U.S. Army, not the Air Force. He said the contract was awarded in November of 2002 and it was for $784,000, not the $1 million listed in Burns' release.

He said the demonstration project ended up being a success.

Curtis would not say which lawmaker secured the money for the company, but referred those questions to lawmakers themselves. Burns representatives did not respond to those questions.

He said the Army later decided to move the research to Maryland and Virginia abandoning the plan to conduct the research in Montana.