McMahan: Crimes Came As A Surprise
By Susan Hylton/Tulsa World In Muskogee ~ Oklahoma State Auditor and Inspector Jeff McMahan testified Thursday that he didn't know of the crimes being committed during and after his 2002 campaign and that he didn't know that his wife, Lori McMahan, was involved.
But it all became clear on Aug. 23, 2007, he said in the eighth day of testimony in Muskogee federal court, where he and his wife are on trial on charges of conspiracy, mail fraud and accepting bribes.
That was the day the FBI served a search warrant at his Tecumseh home and his wife confessed her illegal activities to him, he said.
Jeff McMahan's voice became shaky and his eyes watery at that point in his testimony. What did he learn that day? "That my wife had done something wrong," he said softly. Lori McMahan dabbed her own tears with a tissue.
While Jeff McMahan said he accepts responsibility for the things that went wrong in his campaign, he also said the following crimes occurred without his knowledge: $157,882 in illegal "straw donor" and in-kind contributions were made to his 2002 campaign, bankrolled by Kiowa businessman Steve Phipps, whose abstract companies were regulated by the auditor's office. The McMahans took all-expense paid trips to New Orleans and Boston, funded by Phipps. Lori McMahan accepted cash donations from Phipps for campaign signs and radio spots.
Lori McMahan failed to return a ring and matching earrings that she had received from Phipps, who purchased them at a New Orleans jewelry shop for about $2,140, after Jeff McMahan said he told her to return them.
But he did not admit that Phipps ever received anything in return for the money and gifts. "I haven't done any political favors for anyone," he said.
McMahan said he didn't learn that Phipps' partner in the abstract companies was former state Sen. Gene Stipe, D-McAlester, until that partnership was publicized in 2005. "Everything I knew about Gene Stipe was not favorable," said McMahan, also a Democrat.
Because Stipe is a convicted felon, McMahan said he thought the abstract companies' certificates of authority were invalid by law and that he felt public pressure to do something about it.
Despite legal advice from his office as well as from the Attorney General's Office, McMahan moved to revoke the license of Phipps and Stipe as owners of Phipps Enterprises, a holding company of several abstract companies, as well as a third partner, Larry Witt, who operated an abstract office in Stillwater.
"I wanted to shut them down," he said. Phipps and Tim Arbaugh, a former employee of the auditor's office, have previously testified that McMahan's action was exactly what Phipps wanted him to do.
At the time, Stipe had filed a civil suit against Phipps over ownership of the abstract companies, and Phipps thought the state's move to revoke their license because of Stipe's status as a felon would help him in that lawsuit, they both said. McMahan said he "wasn't real thrilled" that the majority of his campaign contributions were coming from the abstract industry.
"However, it became clear to me that if we didn't raise $300,000, we weren't going to win," he said.
Jeff McMahan said his predecessor, Democrat Clifton Scott, introduced him to Phipps and described him as a good man who could help him raise campaign funds.
In describing what he thought was supposed to be an educational trip with Phipps' abstract company employees aboard a bus bound for New Orleans, Jeff McMahan said Phipps instead played a video of the new auditor being hypnotized during a party.
"I should have got off the bus. It was embarrassing," McMahan said.
Assistant U.S. Attorney Gay Guthrie tried to suggest in his cross-examination that McMahan must have known that his wife's jewelry was worth more than $300, the legal limit for gifts in 2003. "It didn't look that expensive," McMahan said.
McMahan said he tried to return a $5,000 contribution from Stipe but that political consultant Pat Hall assured him that it wasn't illegal as long as it was accompanied by a contributor's statement. "He said, 'Jeff, you don't raise money — you don't win,' " McMahan said.
Both the defense and prosecution have rested. The jury will hear closing statements Friday and then are expected to begin deliberations.
But it all became clear on Aug. 23, 2007, he said in the eighth day of testimony in Muskogee federal court, where he and his wife are on trial on charges of conspiracy, mail fraud and accepting bribes.
That was the day the FBI served a search warrant at his Tecumseh home and his wife confessed her illegal activities to him, he said.
Jeff McMahan's voice became shaky and his eyes watery at that point in his testimony. What did he learn that day? "That my wife had done something wrong," he said softly. Lori McMahan dabbed her own tears with a tissue.
While Jeff McMahan said he accepts responsibility for the things that went wrong in his campaign, he also said the following crimes occurred without his knowledge: $157,882 in illegal "straw donor" and in-kind contributions were made to his 2002 campaign, bankrolled by Kiowa businessman Steve Phipps, whose abstract companies were regulated by the auditor's office. The McMahans took all-expense paid trips to New Orleans and Boston, funded by Phipps. Lori McMahan accepted cash donations from Phipps for campaign signs and radio spots.
Lori McMahan failed to return a ring and matching earrings that she had received from Phipps, who purchased them at a New Orleans jewelry shop for about $2,140, after Jeff McMahan said he told her to return them.
But he did not admit that Phipps ever received anything in return for the money and gifts. "I haven't done any political favors for anyone," he said.
McMahan said he didn't learn that Phipps' partner in the abstract companies was former state Sen. Gene Stipe, D-McAlester, until that partnership was publicized in 2005. "Everything I knew about Gene Stipe was not favorable," said McMahan, also a Democrat.
Because Stipe is a convicted felon, McMahan said he thought the abstract companies' certificates of authority were invalid by law and that he felt public pressure to do something about it.
Despite legal advice from his office as well as from the Attorney General's Office, McMahan moved to revoke the license of Phipps and Stipe as owners of Phipps Enterprises, a holding company of several abstract companies, as well as a third partner, Larry Witt, who operated an abstract office in Stillwater.
"I wanted to shut them down," he said. Phipps and Tim Arbaugh, a former employee of the auditor's office, have previously testified that McMahan's action was exactly what Phipps wanted him to do.
At the time, Stipe had filed a civil suit against Phipps over ownership of the abstract companies, and Phipps thought the state's move to revoke their license because of Stipe's status as a felon would help him in that lawsuit, they both said. McMahan said he "wasn't real thrilled" that the majority of his campaign contributions were coming from the abstract industry.
"However, it became clear to me that if we didn't raise $300,000, we weren't going to win," he said.
Jeff McMahan said his predecessor, Democrat Clifton Scott, introduced him to Phipps and described him as a good man who could help him raise campaign funds.
In describing what he thought was supposed to be an educational trip with Phipps' abstract company employees aboard a bus bound for New Orleans, Jeff McMahan said Phipps instead played a video of the new auditor being hypnotized during a party.
"I should have got off the bus. It was embarrassing," McMahan said.
Assistant U.S. Attorney Gay Guthrie tried to suggest in his cross-examination that McMahan must have known that his wife's jewelry was worth more than $300, the legal limit for gifts in 2003. "It didn't look that expensive," McMahan said.
McMahan said he tried to return a $5,000 contribution from Stipe but that political consultant Pat Hall assured him that it wasn't illegal as long as it was accompanied by a contributor's statement. "He said, 'Jeff, you don't raise money — you don't win,' " McMahan said.
Both the defense and prosecution have rested. The jury will hear closing statements Friday and then are expected to begin deliberations.
Labels: McMahan Trial
posted by Mike McCarville @ 8:14 AM
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