Agent Says McMahan Gave Conflicting Stories; Prosecution Rests In Auditor's Trial

By Tony Thornton/The Oklahoman ~ State Auditor and Inspector Jeff McMahan gave conflicting stories during three interviews about Pittsburg County businessman Steve Phipps, an FBI agent testified today.

Agent Steve Kaitcer was among the final prosecution witnesses at the criminal trial of Jeff and Lori McMahan, who face nine felony counts related to Phipps.

Prosecutors rested their case shortly before 3 p.m. today. Jurors were dismissed for the day an hour later.

Lori McMahan's attorney indicated she will testify. It's unclear whether her husband will testify.

A federal grand jury indictment accuses the McMahans of benefiting from trips, jewelry and more than $100,000 in illegal contributions to the auditor's 2002 campaign, all provided by Phipps. In return, an indictment alleges, the auditor, sometimes at his wife's urging, gave special favors to Phipps' abstract companies, which the auditor's office regulated.

Kaitcer testified about his interviews with both Jeff and Lori McMahan. All three interviews with the auditor occurred at his state Capitol office between August 2006 and August 2007, Kaitcer said. The one with Lori McMahan occurred during a search of the couple's Tecumseh home on Aug. 23, 2007, he said.

After first denying in August 2006 that he attended any business meetings with Phipps, McMahan later acknowledged going to New Orleans on a "teaching" trip funded by Phipps, Kaitcer said.

That bus trip involved about 30 people, many of them Phipps' abstract company employees. Kaitcer said the McMahans told him the auditor could teach courses on the trip if Phipps paid for no more than $300 of his expenses. Other witnesses testified that the auditor did no teaching on that trip, and that the McMahans' expenses far exceeded $300.

Kaitcer said during a second interview with Jeff McMahan, the auditor admitted meeting with Phipps and two legislators at the Capitol between November 2002, when he was first elected, and January 2003, when he took office, Kaitcer testified.

McMahan also gave conflicting accounts about two pieces of expensive jewelry Phipps bought for the auditor's wife, Kaitcer said.

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