Oklahoma Politics: March 2007 Archives

Missed linking to this earlier:

See-Dubya's earlier entry about the Prince of Darkness, former State Sen. Gene Stipe, attracted a celebrity commenter. Mark Singer, who wrote the 1979 New Yorker profile of Stipe, responded to See-Dubya, who comments on Singer's comments.

It's interesting that Singer says he has "refrained from reprinting it in any of [his] books," because it's a terrific piece. He doesn't come right out and say he regrets writing the story, but he seems awfully apologetic about it, and even denies that the article is what it manifestly is -- a profile of Stipe.

Also on the Stipe beat, Jeff Shaw has an interesting theory about why Stipe would make illegal straw donations when he's already doing time for making illegal straw contributions. That same entry reviews an editorial by a Pottawatomie County paper on the straw contributor scandal, which involves the campaigns of three politicians from that part of the state.

The McCarville Report is the place to watch for further developments. McCarville links to today's Oklahoman story (free registration required) reporting that State Auditor Jeff McMahan went on three trips with Stipe business partner Steve Phipps, despite claims by McMahan that he barely knew the man. Phipps and Stipe were partners in abstracting companies, which are regulated by McMahan's office.

Last week, the Oklahoma House of Representatives passed, by a vote of 82-14, HB 2595 (link opens a Microsoft Word-compatible Rich Text Format file), which would move Oklahoma's 2008 presidential preference primary from the first Tuesday in February to the last Tuesday in January. The bill was authored by State Rep. Trebor Worthen and State Sen. Todd Lamb, both Oklahoma City Republicans. The bill has been assigned to the Senate Rules Committee.

Oklahoma is already in a strategic position with its current primary date, which it shares with California, Alabama, Arizona, Arkansas, Delaware, Missouri, and Utah. (West Virginia has a state convention for delegate selection that day, and North Dakota has caucuses.) Although California will attract a lot of attention, it doesn't have the majority of delegates up for grabs that day. In fact, Missouri, Arkansas, and Oklahoma have a combined total of 125 delegates. Add in Alabama's 45, and you have what amounts to a south central regional primary offering 170 delegates. (The numbers exclude the three uncommitted superdelegate seats allocated to each state's RNC representatives.)

Despite a much greater population, California has the same number of delegates, a consequence of the party's overall lack of success in statewide races there. California gets one bonus delegate (for winning the Governor's Mansion); Alabama, Arkansas, Missouri, and Oklahoma have a total of 55 bonus delegates.

(Arizona and Utah are inconsequential -- likely locks for McCain and Romney, respectively.)

While California was a winner-take-all state in years past, in 2008, there will be 54 separate elections. Three delegates will be allocated in each congressional district to the candidate with a plurality. The winner of the statewide tally will get an additional 11 seats. There's an incentive for an underfunded candidate to focus on winning in just one of California's media markets, while spending more time and money in the less expensive, more compact south central states.

So there are already plenty of strategic reasons for presidential hopefuls to spend plenty of time in Oklahoma. If HB 2095 passes the State Senate, Oklahoma would become even more important, leaping ahead of South Carolina by four days to become the second primary on the calendar, just a week after New Hampshire.

Of course, any other state might move its date, too, if there is still time for its legislature to act. In some states, legislatures have authorized the governor or the state's chief election official to move the date in response to the actions of other states, whether or not the legislature is in session.

LINKS: The Green Papers has a wealth of information about the 2008 primary process, including a chronological calendar of primaries, caucuses, and conventions, which in turn has links to details on each state's rules, delegate allocations for the Republicans and Democrats, showing the allocation formula used by each party. There is also a table showing who is eligible to participate in delegate selection and what allocation method is used for each state for both Republicans and Democrats. Each state page includes notes on legislation affecting the date of the primary.

The fact that the Green Papers got Oklahoma's legislative information wrong makes me wonder about the reliability of their other information, however. They have this:

Oklahoma HB 1790 was amended on 7 February 2007 to change the Presidentail Primary date from the first Tuesday in February (5 February 2008) to the first Saturday in February (2 February 2008).

HB 1790 is actually Rep. John Trebilcock's very sensible bill to reduce the number of permitted special election dates from 21 to 14 in every two-year cycle. Unfortunately HB 1790 didn't make it out of committee. I can't find any legislation that would move the primary to a Saturday.

An edited version of this piece was published in the March 21, 2007, issue of Urban Tulsa Weekly. The published version is no longer online. Posted here May 25, 2026. Astoundingly, Lance Cargill's 100 Ideas website is still online. A couple of weeks earlier I wrote here about HB 1648 passing out of committee.

Caucus-blocked
By Michael D. Bates

It's a no-brainer, right? Public-private partnerships for the construction of public infrastructure ought to be subject to the same competitive bidding rules as every other government contract. We have laws designed to make sure that Oklahoma taxpayers get the most value for money when state, county, or municipal governments pay private companies to build roads and bridges. Why should there be any loopholes or exceptions?

The idea is so self-evidently right that in 2006 the Oklahoma House of Representatives voted 94 to 3 in favor of the same language, under the number HB 2470. The Oklahoma Senate passed it by a vote of 43 to 2. It would have become law if it hadn't been for a parliamentary maneuver by Sand Springs Sen. Nancy Riley which killed the bill.

The bill was brought back for another try this session. The House General Government and Transportation Committee approved it earlier this month with only four dissenting votes, and it seemed to be on its way to the floor of the House for easy approval there and in the Senate.

It was scheduled for a vote, but then was pulled by the House Republican leadership on the improbable grounds that a bill which passed 94 to 3 last year and passed committee with flying colors this year didn't have enough Republican support.

The legislation wasn't different, but what was different this year was a tremendous surge of pressure brought by the road-building industry, in the guise of a public-interest group called TRUST (Transportation Revenues Used Strictly for Transportation).

TRUST's board is a who's who of interests that stand to profit handsomely from massive public spending on roads: the Oklahoma Asphalt Pavement Association, the American Concrete Pavement Association, the Oklahoma Aggregates Association, the Oklahoma chapter of the American Council of Engineering Companies, Bob Poe of Poe Engineering (the firm that made its fortune as the exclusive engineering firm for Oklahoma's turnpike system).

Tulsans will remember Mr. Poe's farewell speech as Tulsa Metro Chamber president, a red-faced rant attacking reformers on the City Council as jack-booted Nazis. In Mr. Poe's world, anything that stands between him and making a pile of money at public expense is fascism in action.

The odd thing is that TRUST's main complaint is not against the substance or effect of the bill, but that the existence of the bill implies that sleazy, insider deals have been done in the past. (Their real complaint is another matter. More about that below.)

Well, sleazy, insider deals have been done - right here in Tulsa County. County Commissioner Randi Miller and her two former colleagues approved a very sweet deal for Infrastructure Ventures, Inc. IVI had never built a bridge before. IVI's main qualifications for building a bridge across the Arkansas River: the firm's principals (Bill Bacon, Bob Parmele, Howard Kelsey) were pals of then-Commissioner Bob Dick.

For the moment let's set aside the question of the need for a bridge in south Tulsa County, and focus on how such a facility should be financed. The sensible thing would have been for the county to issue a request for proposals and solicit competitive bids from several companies, accepting the proposal that offered the best value to the taxpayers.
A competitive acquisition might have resulted in a higher percentage of tolls to the county, a more reasonable franchise period (say, shorter than the expected lifespan of the bridge), and more favorable terms on bridge maintenance and repair.

Opponents of HB 1648 argued that this bill was only about the IVI bridge, and state legislation shouldn't be used to address such a parochial concern. (But if it is only about the IVI bridge, why the disproportionately fierce reaction from the road-building industry?)

But the existing IVI bridge contract wouldn't be affected by new legislation. The deal (no longer with Tulsa County, but now with a trust formed by the cities of Jenks and Bixby) has run afoul of several laws already on the books. A district court ruling on the legality of IVI's arrangement with Jenks and Bixby is expected in the near future.

The IVI bridge deal did expose a significant loophole in Oklahoma's competitive bidding law. Because a public body isn't paying money up front for a road or bridge, it could be argued that the contract is for less than $50,000 and therefore exempt from the law.

Such a reading ignores the future liability that a public-private deal imposes on the government entity, not to mention the likely revenues to the private firm. IVI's deal with Tulsa County was projected to bring the company over $600 million. It's a pretty big loophole that can accommodate a number like that.

HB 1648 is a very simple piece of legislation. It adds 88 words to the existing law, to expand the definition of "public construction contract" in 61 O. S. 2001, section 102 to include contracts in which "other forms of consideration" - such as the right to collect tolls that would be due to a public agency - are used instead of money to pay for a bridge or road.

The competitive bidding rules themselves, which have been around for over 30 years, would not be changed. They would simply apply to all major public works contracts.
It's such a straightforward and sensible idea, it would have been difficult for any state legislator to vote against it. And that's why the bill's opponents worked so hard to keep it from coming to a vote.

The road-building industry's motives are easy to understand. What's harder to understand is why Republican House leadership, committed to fiscal responsibility and cleaning up state government, wouldn't exert some pressure of its own in support of a bill that advances those ideals. Speaker Lance Cargill is promoting his 100 Ideas initiative for improving Oklahoma government. It seems like competitive bidding on all major public projects ought to be one of them.

So what's the real reason Big Construction put on a full court press to kill the bill? There's a hint in TRUST's flyer attacking HB 1648:

"HB 1648 creates two problems for future P3 [public-private partnership] legislation. First, if it passes, a future P3 authorizing bill that contains its own transportation specific safeguards to ensure competitive selection, it will have to repeal the conflicting language in HB 1648. Voting for P3 will be tough enough for some legislators, but voting for repeal of HB 1648 might be even more difficult for many."

Allow me to translate: "We don't want you to approve this bill because we're going to come forward with 'competitive bidding lite' next year."

If HB 1648 had been enacted, it would be more apparent that the "safeguards" in Big Construction's bill are really a weakening of Oklahoma's policies, a special deal that would allow their industry to win billions of dollars in business not through offering the best deal to the taxpayers but by working their political connections.

What else could be in this future P3 legislation? There's reason to think that the road-building industry wants Oklahoma to adopt Texas's Comprehensive Development Agreement (CDA) legislation. The Texas Department of Transportation (TxDOT) has granted CDAs to a consortium led by Cintra, a company based in Spain, to build Toll Road 121 to connect US 75 and I-35 north of Dallas, and Toll Road 130 to bypass Austin on the east.

Cintra would build the roads and operate them for 50 years, collecting all the tolls, and paying some of the money to TxDOT. State government's power of eminent domain would be used to acquire right-of-way for these private, for-profit roads. There's a non-compete clause - if state or local government uses tax dollars to build a road that might draw traffic away from the toll road, Cintra is entitled to compensation for lost revenue.

These deals have been highly controversial in Texas, and they deserve a closer look in a future column.

We also need to watch closely to see which legislators are pushing P3 legislation and where their campaign money is coming from. As a Republican, I'd like to think that a Republican-controlled State House will be looking out for the taxpayers' interests, standing firm against greedy special interest groups. Given the apparent lack of Republican House leadership support for a common-sense piece of legislation like HB 1648, it seems I can't take that for granted.

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."

UPDATE 2021/05/25: Replaced a dead link to a Junkyard Blog weekly archive with a Wayback Machine link to the specific entry. Mark Singer, author of the New Yorker story on the 1978 Oklahoma Senate race that focused on Stipe, responded to See Dubya in the comments, and See Dubya posted a follow-up.

MORE: Since I mentioned Pruiett, you really need to read William Bryk's 2002 New York Press story about Oklahoma defense lawyer Moman Pruiett.