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A Wiki article summarizes the controversy; "In May 1999, a laboratory at Cornell University published the results from a laboratory trial that appeared to indicate that the pollen of genetically modified Bt corn presented a threat to monarch caterpillars. Critics claimed that the popular media was wrong to report that monarch butterflies were threatened because this experiment did not duplicate natural conditions under which monarch caterpillars may come in contact with corn pollen. (Cornell News, 1999)
In 2001 the scientific journal the Proceedings of the National Academy of Sciences published six comprehensive studies that showed that Bt corn pollen does not pose a risk to monarch populations . . . "
The article at http://en.wikipedia.org/wiki/Transgenic_maize elaborates on the NAS findings.
While reading about Bt treatments, I did discover that this organism is the source for genetic material used to create man made genetically modified crops. As far as I know there is no evidence that using Bt treatments could cause any plants to spontaneously absorb and incorporate Bt genetic material.
Using Btk on milkweed plants would possibly expose Monarch larvae to Btk. I would assume it is be toxic to them.