Stipe, Boren, McMahan in tangled campaign finance web

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The Daily Oklahoman has been covering the latest developments in the investigation of illegal campaign contributions involving former State Sen. Gene Stipe of McAlester and other powerful Democrats in state government. I don't have time to try to sort through the tangled mess tonight, but here are links to the Oklahoman's series. (Free registration is required:

March 7: "FBI agents Wednesday searched the offices of former state Sen. Gene Stipe and his accountant, apparently looking for evidence linking Stipe to a pet food plant that is under grand jury investigation." Computers from Stipe's offices were loaded into an FBI van. McAlester's National Pet Food Plant belonged to Stipe's business partner Steve Phipps. Phipps and Stipe were partners in an abstracting company in Antlers in southeastern Oklahoma.

March 8: A more detailed version of the initial report, including more of an explanation about the activities of Phipps that are under investigation:

An FBI agent's affidavit used to obtain that search warrant alleged Phipps made three ex-legislators — Mike Mass, Randall Erwin and Jerry Hefner — partners in a gambling machine company, Indian Nation Entertainment. The FBI claims that partnership was in return for the legislators' help in obtaining state money for Phipps' other interests, including a not-for-profit foundation called Rural Development Foundation.

The dog food plant ultimately got $1.1 million of money earmarked for Rural Development Foundation, in addition to $419,000 in state money that Mass directed through the quasi-private McAlester Foundation, records show.

The Oklahoman previously reported Stipe profited from the sale of property on which the plant was built.

Records show Oklahoma taxpayer money was used in 2002 to buy property from Stipe, which allowed him to repay a $50,000 loan that had been illegally funneled into the congressional campaign of Walt Roberts.

The property in question was essentially a warehouse that Stipe and Roberts bought in 2001 for about $75,000 as a possible auction house for Roberts. A year later, the McAlester Foundation, using city and state tax money, bought the property from Stipe for $190,000, records show.

The article goes on to remind readers that Mass, who is also a former chairman of the Oklahoma Democratic Party, admitted to being a straw donor for Stipe, passing along money contributed by Stipe in a way that avoided public scrutiny and campaign contribution limits.

Looks like everyone got their back scratched with the help of taxpayer funds.

March 9: "Former state Sen. Gene Stipe continued to illegally fund congressional campaigns through straw donors as recently as 2004, even while on house arrest for the same thing in a 1998 campaign, an FBI agent said in an affidavit that was unsealed Thursday in Muskogee." One of the recipients of straw donations was Congressman Dan Boren. Another was State Auditor and Inspector Jeff McMahan. This article features quotes from some of the straw donors used to hide illegal contributions from Stipe.

March 9: State Reps. Mass, Hefner, and Erwin earmarked nearly $2.3 million in Rural Development Foundation money for Steve Phipps for construction of the National Pet Foods Plant. Looks an awful lot like a quid pro quo -- they get government money for Phipps; Phipps sets them up to make a living when they are term-limited out of office.

March 10: Straw donors also funneled money from Stipe to Gov. Brad Henry, State Rep. Mike Mass, and McMahan.

Some state employees served as straw donors to Boren's campaign, including the head of the department in the State Auditor's office that oversees abstracting companies (recall that Stipe and Phipps were partners in an abstracting company) and an employee of the Oklahoma Water Resources Board.

March 12: State Republican Chairman Tom Daxon, himself a former State Auditor and Inspector, called on State Auditor Jeff McMahan and his deputy, Tim Arbaugh, to resign. McMahan was the beneficiary of illegal contributions from Stipe, and Arbaugh was used to pass illegal Stipe contributions to Congressman Boren.

Keep an eye on the Daily Oklahoman's local news page and Mike McCarville's blog for further developments. (Here's McCarville's article on the "smoking gun" affidavit tying Stipe and Phipps to Boren and McMahan.) Jeff Shaw of Bounded Rationality has some commentary here.

UPDATE: See-Dubya, a native son of Stipeland, has a terrific description of Gene Stipe:

If you could see the guy and hear him speak for a minute--taking in the flapping jowls, the sanctimonious drone, the Yosemite Sam diction--you couldn't help but size up former Oklahoma State Senator Gene Stipe accurately. He's Boss Hogg and Kingfish and every caricatured stereotypical Southern machine politician you've seen rolled up into one smarmy package. And despite retiring from Oklahoma's State Senate and a subsequent campaign finance conviction, Stipe's still making himself felt in Oklahoma politics.

He's also got a quote from Mark Singer, who wrote the definitive profile of Stipe in the April 2, 1979, edition of the New Yorker.

Singer continues, "'Let's say I pick up a Smith & Wesson double-action .22-calibre revolver on a .32 frame with a four-inch barrel and plant one right between your eyes,' a man in Latimer County once said to me, in what I decided to regard as an utterly speculative and friendly tone of voice. 'Now, if I've got a brain in my head, all I need to do is drop the gun and borrow a dime and call Gene Stipe. And I'm pretty sure he can find me a jury of my peers that believes in the good old "Judge not, that ye be not judged." ' "

If that can be believed, Gene Stipe, like his fellow Oklahoma lawyer Moman Pruiett did decades earlier, "made it safe to murder."

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Bob said:

Gene and his brother Francis are purportedly owners of many abstract companies.

About 10 years ago or so, someone in the state legislature conveniently got a law changed to require property buyers to obtain "abstracting-after-the-close", namely requiring an additional costly lien search after a property sale closes to see if title documents that were intended to be filed were actually properly filed.

What a HANDY law!

The Tulsa World reported a while back that Oklahoma ranks in the top tier of Closing Costs of home loans because of primarily the ABSTRACTING Requirement.

Oklahoma is one of the few remaining states that still requires the Abstract process. Almost all other states have simply moved to Title Insurance.

Ever wonder why Oklahoma has failed to follow the lead of the vast majority of the other states in this respect? Just inject Gene Stipe with Truth Serum, and we'll all really know why really soon.....

Well, at least Oklahoma finally joined the other 49 states in allowing Tatooing. But, of course, the legislature made a mess of things by setting the experience bar so high no one can qualify to be certified. He that giveth must taketh away.

At least we did away with Cock-Fighting. Sort of.



The one cool thing about abstract of title is it shows you the chain of ownership going back to the original land grants -- the Dawes Commission for most of eastern Oklahoma. But I'm sure historical interest is not the motivation for the continued abstracting requirement in Oklahoma.

Bob said:

In a few more months, at this pace, Gene Stipe may make some more Oklahoma History.

I predict he'll also bring down a few others with him in the expected fall. I expect that Mike MASS and Steve PHIPPS are being sized up right now for Orange Jumpsuits labeled with B.O.P.

It may even burn through to State Auditor McMahan.

Interesting comment by Gary Jones in today's Lorton's World, that only 1 new abstract company has been certified to open by the State Auditor in the past 20 years.

However, another Federal wrist slap is due Mr. Stipe because of the poor, harmless Prince Of Darkness' advanced age. Poor dear Mr. Stipe, lead astray again by proferred temptation and the greed of others.

On the Oklahoma abstract requirements, ones I've perused here have as their first document the Louisiana Purchase.

I predict that the state requirement for Abstracts will get reformed right after the following other Oklahoma Retro-Artifacts get reformed, meaning NEVER:

1) Oklahoma Workmen's Compensation Adversarial System.
2) Tag Agents
3) Tort Reform
4) Consolidation of Oklahoma's 541 School Districts, the 4th largest number of any state in the U.S.
5) State government bloat.
6) Consolidation of our 27 separate state university SYSTEMS.

In other words, it would be highly dangerous to your health to hold you breath, waiting for Reform in O.K.L.A.H.O.M.A., Oklahoma O.K.!

Janice said:

In Daily Oklahoman archived articles, Higher Ed embezzlement was significant in the 1980's. The reporter Randy Ellis, spent years investigating/reporting; finally the legislature pressed for an audit. Apparently lots of $ was embezzled from SEOSU in Durant and Rose State College and there were subsequent criminal convictions: allegations included fake payroll, insurance fraud and other elaborate scams, including the funding of political campaigns. Regents and legislators were named in the investigation, but never charged. Legislation was later passed requiring regular audits of the universities; however that requirement was soon discarded. The former asst. state auditor who investigated SEOSU is now the finance director at one of the OU schools. In 2003 he and the RSU President, a former SEOSU director, were named in a lawsuit by the x-comptroller - alleging financial impropriety but the charges were never examined; the judge said that Higher Ed was exempted from the Whistleblower Act under which the lawsuit was filed. Higher Ed gets so much $ and seems to have few controls; I wonder how much of this kind of stuff is still going on.

Bob said:

The Higher Education establishment is the long-term political honeypot used to re-cycle our tax dollars back into the pockets of connected politicos and their cronies in the construction, bond underwriting, banking and "consulting" industries.

Most of the dollars are re-cycled to Democrat Party candidates.

At one time, and at the SAME time, former high ranking Oklahoma politicians were Presidents of OU, Central State, NSU, SEOSU Durant, and Rogers State College, Claremore.

Do the names Boren, Nigh, Williams, Glen Johnson, and Randall ring a bell?

Johnson has now been moved from SEOSU to become CHANCELLOR of the State Regents.

Expect a fatal financial hemorrage of state funds shortly. A self-inflicted funding CRISIS due to run-away spending and borrowing channeled to the connected cronies of the State Regents.

Isn't democracy GREAT!

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This page contains a single entry by Michael Bates published on March 12, 2007 9:54 PM.

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