Piatt Avoided Challenge By Returning Phillips Cash

House Majority Floor Leader Greg Piatt apparently avoided a challenge to his leadership position yesterday by agreeing to return a $5,000 campaign donation from controversial Texas businessman Bradford Phillips, Republican sources tell The McCarville Report Online.

Piatt, at the urging of new House Speaker Chris Benge, agreed over the weekend to return the donation after earlier announcing he would keep it. Had he not done so, the sources say, an effort to challenge his continued role as majority floor leader would have come at Monday's GOP House Caucus meeting. The effort was underway Monday morning when word circulated that Piatt had agreed to return the donation.

The donation, and others from those associated with interests of the Phillips family, had been criticized by some GOP House members because Piatt accepted the donations last year after sponsoring an amendment affecting insurance companies. The amendment would have benefited the interests of Bradford Phillips and his father, Gene Phillips, controversial figure who was involved in the scandal that toppled former Insurance Commissioner Carroll Fisher.

Piatt, from Ardmore, told The Oklahoman's Michael McNutt that Benge encouraged him to return the donation over the weekend. Benge told him that for the "sake of moving forward" he should return it. Piatt acknowledged there "was a problem with perception by our members. But there was nothing unethical or illegal about anything that was done."

Piatt told McNutt he likely won't accept future donations from Phillips because it is a "lightning-rod issue."

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Piatt Keeps Phillips' $5,000 Campaign Donation

By Mick Hinton In The Tulsa World ~ House Majority Leader Greg Piatt said Friday that he will keep a $5,000 campaign contribution from Bradford Phillips, who sought legislation last year that would have benefited insurance companies his family holds in trust.

Piatt, R-Ardmore, said he did not solicit the contribution.

There was nothing illegal about Phillips' giving the contribution or Piatt's accepting it.

The lawmaker said he would receive criticism no matter what decision he made about the contribution.

Piatt said he discussed the issue again Friday with two key members of his campaign committee in Ardmore, and they agreed with his decision. "It doesn't go away either way, but if you do nothing wrong, there is nothing to apologize for," he said.

Piatt proposed a key amendment to the legislation sought by Phillips. He received the donation at an Ardmore fundraiser in June after the 2007 legislative session. Two days earlier, Piatt also received a $5,000 donation from Stephen Jones, an attorney for Bradford Phillips' father, Gene Phillips. Jones is a major contributor to Republicans. Campaign donations are limited to $5,000.

Two other lawmakers confirmed this week that they have returned campaign contributions from Phillips. Rep. Ron Peterson, R-Broken Arrow, who leads the committee that heard the controversial legislation, said he returned a $4,000 check shortly after he received it in late December. Peterson said that as chairman of the committee that hears such bills, he wanted to make sure that there wasn't even the perception that he would be influenced by a donation.

He said the merits of the insurance amendment have been lost in the controversy over Phillips.

State Insurance Commissioner Kim Holland had proposed that an insurance company could make commercial real estate loans based on a cap of 2 percent of assets, patterned after a national model. However, Piatt succeeded in passing an amendment in the House committee to raise the amount to 20 percent.

Both Peterson and Piatt said they have considerable experience in the insurance and banking fields and that 20 percent is reasonable.

The bill with the Piatt amendment was approved by the committee but was not brought to the House floor because it had become controversial.

Meanwhile, Rep. Paul Wesselhoft, R-Oklahoma City, a committee member, said Thursday that he returned a $700 check from Phillips. Peterson said he told committee members who received contributions that he thought it was a good idea not to accept them. He advised them to return them, and at least four of the members have. They were contributions of about $600 each.

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Piatt Donations An Issue In Speaker's Race?

Sources in the State House report today that campaign donations to House Majority Leader Greg Piatt (pictured) of Ardmore by those associated with controversial Dallas businessman Gene Phillips and his son, Bradford, are becoming an issue in the race for speaker.

Two GOP members of the House say that Piatt supports Rep. Gus Blackwell to replace Lance Cargill and they have taken note of today's report in the Tulsa World highlighting Blackwell's unusual move, last session, of using his leadership role to cast a vote on a pro-Phillips measure in a committee in which Blackwell technically is not even a member.

The measure sought by the Phillips interests was carried by Piatt, the House Majority Leader, the World reported last year: Phillips' son Bradford Phillips tried unsuccessfully last session to get an Oklahoma law changed that would have allowed the family's insurance companies to put up fewer assets when making real estate loans. State Insurance Commissioner Kim Holland strongly protested the change, which was approved in committee but did not make it into law. The amendment was carried by House Majority Leader Greg Piatt, R-Ardmore, who received a $5,000 contribution from Bradford Phillips in June, state Ethics Commission records show.

One member of the House says the donations to Piatt for his 2008 campaign by those connected to Phillips is at least $11,000. Ethics Commission records show the $5,000 donation from Bradford Phillips on June 6, 2007, plus donations of $5,000 from Enid attorney Stephen Jones, who represents Phillips' interests, on June 4, 2007; and $1,000 from lobbyist Bobby Stem, who lobbies for Phillips' interests, on May 31, 2007.

Following Insurance Commissioner Holland's protest against the Phillips measure, Republican Bill Case, with the support of those in the Phillips camp including Jones, tried to defeat Holland. He failed. He is now a lobbyist for Phillips in Stem's firm.

In addition, a mysterious committee based in Austin, Texas, tried to defeat Holland and spent almost half a million dollars in the unsuccessful effort.

The controversy over the Phillips family erupted again recently, when it was revealed that several GOP legislators, including then-Speaker Cargill and Blackwell, attended a fundraiser for Mike Huckabee at Gene Phillips' palatial home in Dallas. After the event was publicized and questions were asked, several legislators said they received, and returned, donations from Bradford Phillips. Some estimate the legislators recently returned at least $6,200 to Phillips.

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Fourth House Committee Member Returns Campaign Donation From Bradford Phillips Of Texas

A fourth member of the House Economic Development and Financial Services Committee, Rep. Ron Peters, Tulsa Republican, confirmed today that he has returned a campaign donation from Texas businessman Bradford Phillips, son of the controversial insurance industry figure Gene Phillips. And a fifth member may have returned a donation as well.

Asked by The McCarville Report Online if he had received a campaign donation from Bradford Phillips, Peters (pictured) replied, "Yes, $600."

Peters said he received the unsolicited donation "about a month ago" and returned it.

Committee Chairman Ron Peterson, R-Broken Arrow, has not yet responded to a similar TMRO inquiry. A House member, however, told TMRO that Peterson received a donation "much larger" than the $600 Peters received and returned. The member says Peterson also returned the donation.

Rep. Jeff Hickman, R-Dacoma, and Rep. Earl Sears, R-Bartlesville, both told the Tulsa World earlier that they received checks for $600, and Rep. George Faught, R-Muskogee, said he received $645. The contributions came in late December, apparently about the same time Peters received the donation to his campaign. They also returned the donations.

They are members of the House committee that approved legislation favorable to the Phillips family last spring.

The donations apparently came about the same time Gene Phillips hosted a mid-December fundraiser for presidential candidate Mike Huckabee in his Dallas home. House Speaker Lance Cargill, State GOP Chairman Gary Jones and other Republican members of the House attended.

Gene Phillips became a controversial figure during the tenure of former Insurance Commissioner Carroll Fisher. Fisher is serving a three-year prison sentence for embezzling $1,000 from his campaign and lying on a contributions report. He also is accused of accepting $25,000 and other gifts from Phillips, his family and business associates in exchange for favorable treatment of their insurance companies.

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Holmes Accuses Republicans Of 'Pay For Play'

Oklahoma Democratic Party Chairman Ivan Holmes is accusing State House Republicans of "pay for play."

The accusation came in a news release from Holmes that centered on news reports detailing that House Speaker Lance Cargill and several other Republican House members attended a fundraiser at the Dallas home of Gene Phillips, controversial businessman who is linked to the scandal that resulted in the impeachment of former Insurance Commissioner Carrol Fisher and his resignation from office.

"According to reports from the Tulsa World, Phillip's son attempted to change a law (in 2007) that would have favored his insurance company. The amendment was carried by Republican Majority Floor Leader Greg Piatt, R- Ardmore. Piatt received a $5,000 contribution from Phillip's son in exchange for him carrying the bill," Homes said.

"Three Republican lawmakers have confirmed that they will be returning contributions from Phillips. The three Republicans are members of a House Committee that approved legislation favorable to the Phillips family last spring. Why haven't all Republican House members returned contributions they received from Phillips?" Holmes asked.

Republican representatives who attended the Dallas fundraiser besides Cargill, Holmes said, were Rep. Ron Peterson, R-Tulsa; Gus Blackwell, R-Goodwell; Mike Jackson, R-Enid; Rob Johnson, R-Kingfisher; Colby Schwartz, R-Yukon; and T.W. Shannon, R-Lawton.

"Not only did these Republicans attend a fundraiser at the home of a person who is in the business of bribing elected officials but they carried his dirty water in the Legislature," said Holmes. (Editor's Note: Gene Phillips has not been convicted of bribery; he once faced a federal bribery indictment and was acquited.)

"An investigation into these activities needs to be conducted immediately. I fear that the same people that bribed the convicted former Insurance Commissioner are now contributing to House Republicans.

"Republicans in the House of Representatives need to clean up their own House" said Holmes. "Since Republicans have gained Republican control, they have managed to come under investigation by the Ethics Commission and taken numerous contributions from businessmen and lobbyists.

"This pay for play attitude needs to stop. Oklahomans will see through their unethical behavior and tactics and elect a Democratic Majority in 2008 that truly cares about the needs of working Oklahomans," Holmes said.

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Hickman, Sears, Faught Return Phillips Money

Mick Hinton of the Tulsa World and The Associated Press report today that State Reps. Jeff Hickman, Earl Sears and George Faught are returning contributions given by the son of a man linked to convicted former state Insurance Commissioner Carroll Fisher. The donations were given by Bradford Phillips who is the son of Texas insurance company owner Gene Phillips.

Here's the essence of Hinton's story: Three Republican lawmakers confirmed Wednesday that they will be returning unsolicited campaign contributions from Bradford Phillips, the son of controversial Texas insurance company owner Gene Phillips.

Rep. Jeff Hickman, R-Dacoma (left), and Rep. Earl Sears, R-Bartlesville (center), both said they received checks for $600, and Rep. George Faught, R-Muskogee (right), received $645.

The contributions came in late December.

The three are members of a House committee that approved legislation favorable to the Phillips family last spring.

Faught said that when he learned about the controversy surrounding the Phillips family, he decided to return the check.

Sears, who had cashed the check, took $600 out of his campaign Tuesday and sent it to Phillips.

Hickman said he was mailing the check back Wednesday. "I returned the contribution; I just felt uncomfortable," Faught said.

Read more at http://www.tulsaworld.com/news/article.aspx?articleID=20080117_1_A9_hThem76744.

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Mike Brown: Cargill's 'Petty Attacks' Uncalled For

Tahlequah Democat Rep. Mike Brown (pictured) said today that House Speaker Lance Cargill's remarks last week about fiscal responsibility and ethical behavior were uncalled-for "petty attacks."

Brown said Cargill "resorted to petty attacks and blamed others for his problems. His personal attacks on other Members of the House of Representatives are uncalled for.”

“No matter what the Speaker says, the fact is more money has been spent,” said Brown. “The Speaker can send out press releases to justify paying his employees more money and buying new furniture. It is a fact that the Oklahoma House of Representatives and Legislative Service Bureau budgets have increased in his tenure as Speaker.”

“I am perfectly happy with my new office renovation,” said Brown. “I would have been perfectly content with my old oak desk, sofa and chairs. When I asked to keep my furniture I was told that keeping the old furniture wasn’t an option, the Speaker was replacing everyone’s. I am not taking issue with the Speaker over the fact that he renovated the offices. I take issue with the fact that the House budget has increased by $1 million and the Speaker is now making excuses for extravagant spending. Don’t insult my or the peoples’ intelligence by saying you’ve cut the budget when you really haven’t.”

“It seems The Speaker and other Republican House Members want to blame former Senator Gene Stipe or other elected officials' ethical behavior for their current problems. Gene Stipe hasn’t had any control of the state's budget since I’ve been elected. Former Insurance Commissioner Carroll Fisher was impeached by a Democratic controlled House in 2004 for illegally receiving bribes and gifts from the Gene Phillips Group, and is now in prison. Since then the Republican Leadership and a handful of Republican House members enjoyed a fundraiser at the Phillips home in December. When reporters asked them about it, they seemed to have selective memory loss as to whose home they were going or completely forgot the Fisher/Phillips incident.”

“Democrats took action in impeaching Fisher, will others be willing to do the same if necessary?” asked Brown.

“I want to work in a bipartisan government with the Speaker if he is willing. We can all work together to find ways to save Oklahoma taxpayers money. Just don’t use the Speaker’s office to promote spending less money when you are in fact doing the opposite.”

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Oklahoman: Legislators Scrutinized Over Event

The Sunday Oklahoman has a lengthy article about the Mike Huckabee fundraiser at the Dallas home of controversial businessman Gene Phillips that was attended by numerous Oklahoma Republican legislators, including House Speaker Lance Cargill.

Reporters Nolan Clay and Randy Ellis list all those from Oklahoma who attended and have statements from most of them.

Cargill told the reporters he was invited to the event by a lobbyist for insurance companies controlled by Phillips and his son, Brad, former State Rep. Bill Case, unsuccessful candidate for insurance commissioner in 2006. Cargill said he didn't know the event was being held at Phillips' home.

Read the entire story later today online at www.newsok.com. The newspaper is on the stands.

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Washington Post: Huckabee Didn't Know About Phillip's Past Legal Entanglements

From The Washington Post ~ Wealthy Texas financier Gene Phillips had thought about getting behind Republican Mike Huckabee's presidential bid for some time, but it was only after the former Arkansas governor surged in the polls that Phillips decided to open his wallet and his sprawling Dallas estate for a fundraiser.

Read the entire story at http://www.washingtonpost.com/wp-dyn/content/article/2007/12/28/AR2007122802477.html

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World: Cargill Says He Didn't Know Huckabee Fundraiser Was At Dallas Home Of Gene Phillips

By Mick Hinton In The Tulsa World ~ Several Republican House members, including Speaker Lance Cargill, attended a fundraiser recently in the home of Texas businessman Gene Phillips, who has been linked to convicted former insurance commissioner Carroll Fisher.

Phillips was hosting the fundraiser for Republican presidential hopeful Mike Huckabee.

Fisher is serving a three-year prison sentence for embezzling $1,000 from his campaign and lying on a contributions report. He also is accused of accepting $25,000 and other gifts from Phillips, his family and business associates in exchange for favorable treatment of their insurance companies. Fisher has said the money was a loan.

Cargill said Friday that he went to the fundraiser at the invitation of a former colleague. "I was not informed where the event was," he said. "As it turns out, it was at his (Phillips') home." Cargill said he looked at the event as a chance to visit "with the person who has a legitimate chance to be president of the United States.

Rep. Danny Morgan, who leads the House Democrats, said Friday, "When I heard this, I was floored. "It looks very suspect that the speaker would allow himself and members of his caucus to be involved in a fundraiser with an individual allegedly involved with Commissioner Fisher," Morgan, D-Prague, said.

Rep. Gus Blackwell, R-Goodwell, said Friday that "it never clicked" in his mind when he and others went to Phillips' home Dec. 18 to attend the fundraiser. Other Republican lawmakers who attended were Reps. T.W. Shannon of Lawton and Mike Jackson of Enid. Three other GOP lawmakers reportedly were at the fundraiser.

Phillips' son Bradford Phillips tried unsuccessfully last session to get an Oklahoma law changed that would have allowed the family's insurance companies to put up fewer assets when making real estate loans. State Insurance Commissioner Kim Holland strongly protested the change, which was approved in committee but did not make it into law. The amendment was carried by House Majority Leader Greg Piatt, R-Ardmore, who received a $5,000 contribution from Bradford Phillips in June, state Ethics Commission records show.

Holland noted that Gene Phillips was linked to an anonymous Web site that showed up during her 2006 election bid. Although it did not name Holland, the Internet campaign ad featured a silhouette of her. "Yes, he (Phillips) was linked to the Web site and he was the gentleman linked to one or more indictments against the former commissioner," Holland said at the time.

Meanwhile, Shannon said Friday that he went to the fundraiser not knowing that questions had been raised about Phillips. "I learned all of this after the fundraiser," he said. "It was just a chance to get to see Mike Huckabee."

Stephen Jones of Enid, who has been Gene Phillips' attorney, was one of the co-sponsors of the event. Regarding the Oklahoma lawmakers' attendance, Jones said: "I saw some of those boys. They were all Huckabee supporters." Jones estimated that 250 to 300 people were at the fundraiser, held at Phillips' pool house. Other reports put attendance at 100 to 150. "Phillips has a beautiful home, and he knows how to entertain," Jones said, noting that many functions are held there, although not usually political ones. "There's nothing wrong with it," he said.

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Coming: More On The Phillips-Huckabee Event

The Dallas fundraiser in December for Republican presidential candidate Mike Huckabee at the home of controversial businessman Gene Phillips attracted numerous Oklahoma Republicans, including House Speaker Lance Cargill, and now that event is attracting considerable media attention in Oklahoma City and Dallas. Phillips and his son, Brad, had an interest in Oklahoma legislation in the 2007 session that reportedly would benefit insurance companies they control.

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Cargill Shown In Phillips-Huckabee Event Photos

House Speaker Lance Cargill and other Republican members of the Oklahoma Legislature are shown in photos taken during a December 18th fundraiser at the Dallas home of controversial businessman Gene Phillips for presidential candidate Mike Huckabee.

Also shown in the photos are House leaders Mike Jackson, Gus Blackwell and T. W. Shannon. One source claims that a dozen or more Oklahomans attended the event.

The photos were obtained by John Angier at http://okiecampaigns.blogspot.com/, who also reports that Enid attorney Stephen Jones, Phillips' attorney, arranged for the trip working with former State Rep. Bill Case, now a lobbyist defeated in his bid to be elected insurance commissioner in 2006. Angier also reports that State GOP Chairman Gary Jones attended the event.

As reported yesterday, there's interest in the event given Phillips' involvement in the controversy over former Insurance Commissioner Carroll Fisher here, and given other circumstances involving Phillips in other states.

As we reported during the 2007 legislative session, "Insurance Commissioner Kim Holland warned the House Economic Development and Financial Services Committee that an amendment proposed by Republican Rep. Greg Piatt, R-Ardmore, and apparently supported by the House GOP leadership, opens 'the door for companies that are marginal to come into Oklahoma.'

"The amendment, supported by the Gene Phillips family insurance companies lobbyist Bobby Stem, sets a 20 percent cap on how much money insurance companies can invest in real estate construction loans. Holland wants the limit set at 2 percent. She said real estate construction loans are 'speculative and risky,' and that only three insurance companies, all tied to the Phillips family, want the change.

"The committee's action, and Holland's comments, drew more than usual attention since the Republican that Holland defeated, former Rep. Bill Case, is now a member of Stem's lobbying firm. Case had considerable support from Enid attorney Stephen Jones (Phillips' attorney)."

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Oklahoma Legislators Attended Gene Phillips' Fundraiser For Republican Mike Huckabee

By Dave Levinthal, The Dallas Morning News ~ Presidential candidate Mike Huckabee said he likes his odds of winning Texas' Republican primary, odds bolstered by a lucrative fundraiser...hosted by a highly successful, and litigious, Dallas real estate developer (Gene Phillips) who was once tried and acquitted on federal racketeering charges.

(Phillips figured in the controversial end of Insurance Commissioner Carroll Fisher's term in office. Fisher left office after questions were raised about his acceptance of office furnishings from Phillips and his associates. Phillips was interviewed twice by investigators from the attorney general's office, the grand jury's legal adviser, and Phillips' business associates were subpoenaed to testify before a grand jury. One associate appeared before the grand jury twice. Stephen Jones, Phillips' Enid attorney, was successful in fighting efforts to force Phillips to appear.)

"We have the momentum, and I'm hoping we can build on it. People here want conservative leadership," the former Arkansas governor said, after a two-hour speech and meet-and-greet at Phillips' 13-acre Dallas estate (on December 18th).

"This is a pro-life, pro-Second Amendment, pro-traditional marriage state that believes in lower, not higher taxes. And I feel like if there's anyone in the race that feels a kinship with Texas, except in football, that'd be me."

Organizers announced at the end of the fundraiser that Mr. Huckabee generated more than $202,000 from the event, where standard tickets went for $2,300.

Those in attendance included Irving Mayor Herbert Gears and several members of the Oklahoma Legislature (who were not identified; Levinthal told The McCarville Report Online, "I didn't get their names - they left shortly after the group of about five or six of them were introduced publicly by an event organizer as Oklahoma legislators. It appeared all were men, however."). The Texas primary is March 4.

The Dallas yield is yet another cash infusion for a candidate who even this fall was struggling to raise money while better-known GOP presidential contenders such as Rudy Giuliani and Mitt Romney wallowed in cash.

Last quarter, Mr. Huckabee raised just over $1 million, dwarfed by the sums Mr. Giuliani and Mr. Romney raked in. Even Ron Paul, the U.S. Representative from Lake Jackson, who's in single digits in the GOP polls, far outpaced Mr. Huckabee's receipts.

But Mr. Huckabee's poll numbers have soared on the strength of a conservative message that's appealed especially to evangelical Christians.

On Tuesday night, he regaled the audience of more than 150 with tales of his transformation from a small-town boy whose father never thought he'd meet the state's governor to a man who became Arkansas' 44th governor.

Mr. Huckabee spoke at length about replacing the federal income taxwith a consumption-based sales tax and empowering states to better tackle issues like education. But he didn't address immigration policy, abortion or gay marriage.

In an interview afterward, Mr. Huckabee eagerly defended his host, calling Mr. Phillips a wonderful man whom he's proud to count among his supporters.

In 2002, a federal jury acquitted Mr. Phillips on seven charges, including racketeering and wire fraud, stemming from allegations that he was illegally paying off union officials and mobsters.

This year, Mr. Phillips sued Google in federal court, alleging libel stemming from the search engine's placement of Web sites and articles about his past legal troubles. The suit has since been withdrawn byMr. Phillips.

He also has found himself crosswise with Dallas City Hall. Last year, Transcontinental Realty Investors authorized the bulldozing of the historic Missouri-Kansas-Texas Railroad depot, built in about1925 in the West End. Mr. Phillips' American Realty Investors owns more than 80 percent of Transcontinental. The city alleges in a case still pending that Transcontinental did not obtain proper permits and failed to secure permission from the city's Landmark Commission, which must authorize such demolitions.

Mr. Huckabee said he wasn't concerned about Mr. Phillips' legal dealings: "Not at all. Of course not," Mr. Huckabee said. "He's a wonderful person, and he's been nothing but just terrific to me. He and his wife are just delightful people who've been just wonderful to us."

Mr. Phillips said his ideology aligns well with that of Mr. Huckabee, whose name he barely knew just two months ago."His generally conservative and Christian message interested me," Mr.Phillips said Tuesday. "He's just come from out of nowhere, but people realized very quickly that he has a wonderful message, a presidential message. … He has a Texas-type message."

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Keating Backs Holland On Insurance Issue

UPDATE: Former Oklahoma Governor Frank Keating, now head of the American Council of Life Insurers in Washington, has written a letter supporting Insurance Commissioner Kim Holland's position on insurance company investments. Keating's letter puts him in opposition to several Republicans in the State House.The McCarville Report Online obtained a copy of Keating's letter, which reads in part:

"On behalf of the American Council of Life Insurers, I would like to thank you for your past and continuing efforts in working to adopt legislation that is based on model laws. I applaud your latest efforts to update Oklahoma's investment laws to conform to the investments of Insurers Model Act adopted by the National Association of Insurance Commissioners.

"ACLI expresses its support for the changes to Oklahoma law that would regulate the types and amount of investment of insurer assets in construction loans. The limits set forth in H 1958 reflect exactly the limits prescribed in the investments of Insurers Model Act. This Model Act was adopted in 1996 by the National Association of Insurance Commissioners and was the product of four years of concerted effort to create a modern and comprehensive investment law for all insurers. The effort included all segments of the insurance industry, state and federal regulators, Wall Street, investment bankers and consumers.

"The Model Act created a set of realistic limits that reflect the level of investments currently being held by a majority of our nation's insurers. After much study done by regulators and such interested parties as the Mortgage Bankers Association and the Investment Company Institute and ACLI the limit set forth in H 1958 was selected as representative of the amount of investment risk insurers should assume to balance their interests in assuring stable capital bgrowth while protecting their assets to pay promised benefits. In fact, our present research (current as of December 31, 2005) shows that our companies investments in such construction and land development loans amounted to 2.6 billion dollars which represents 0.1% of our companies general account assets."

The letter puts the former Republican governor at odds with GOP Rep. Greg Piatt of Ardmore, who pushed for an investment percentage 10 times that which Holland recommended.

(Originally posted March 6th) ~ Insurance Commissioner Kim Holland warned the House Economic Development and Financial Services Committee that an amendment proposed by Republican Rep. Greg Piatt, R-Ardmore, and apparently supported by the House GOP leadership, opens "the door for companies that are marginal to come into Oklahoma."

The amendment, supported by the Gene Phillips family insurance companies lobbyist Bobby Stem, sets a 20 percent cap on how much money insurance companies can invest in real estate construction loans. Holland wants the limit set at 2 percent. She said real estate construction loans are "speculative and risky," and that only three insurance companies, all tied to the Phillips family, want the change.

The committee's action, and Holland's comments, drew more than usual attention since the Republican that Holland defeated, former Rep. Bill Case, is now a member of Stem's lobbying firm. Case had considerable support from Enid attorney Stephen Jones, who has been linked to the Texas group "Just The Facts America" that tried to defeat Democrat Holland last year. Jones is among the state's most generous political donors, giving most often to Republicans.

Another reason for the attention is that former Insurance Commissioner Carroll Fisher is accused of accepting money and gifts from Phillips, his family and business associates; Fisher awaits trial in a bribery case that's an extension of the criminal investigation that drove him from office.

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Stem, Case Lobby For Phillips Company

Lobbyist Bobby Stem's firm, Capitol Gains LLC, is now the registered lobbyist for an insurance company associated with controversial Texans Gene and Bradford Phillips, Ethics Commission records show. Former Republican State Rep. Bill Case (pictured), unsuccessful candidate for insurance commissioner, joined Stem's firm in December as a registered lobbyist.

The registration shows Stem (left) and Case now represent American Reserve Life Insurance Company, a company that figured prominently in the criminal investigation that helped force disgraced former Commissioner Carroll Fisher from office.

Enid attorney Stephen Jones has represented Phillips family interests in Oklahoma. In last year's contentious race for insurance commissioner, Jones and his associates donated thousands to Case's campaign and Jones has confirmed to The McCarville Report Online that another client of his is the secretive "Just The Facts America" group based in Austin, Texas and headed by Texas Republican activist Jim Cardle; JTFA is the entity that invested an estimated $300,000 from anonymous donors in television commercials and a website attacking incumbent Insurance Commissioner Kim Holland, Democrat appointed by Governor Brad Henry when Fisher resigned rather than face removal from office. Investigations into Fisher showed he accepted gifts from a company tied to Gene Phillips.

A document on file in the state of Kansas reports the following: "On April 11, 2005, Bradford A. Phillips, President and Chief Executive Officer of Liberty Bankers Life, provided the Commissioner with an organization chart, dated December 31, 2004, indicating that the May Trust is the "Ultimate Controlling Parties" of Realty Advisors, Inc., American Reserve Life Insurance Company, and Liberty Bankers Life. Mr. Phillips also provided documentation indicating that the Trustees of the May Trust are Mickey N. Phillips, Ryan T. Phillips, and Donald W. Phillips." They are the children of Gene Phillips, as is Bradford Phillips. Regulators in other states have found that Gene Phillips exercises considerable authority over the operations of the companies.

Grand jury probes into Fisher's conduct resulted in allegations he accepted bribes from Phillips, his family and business associates while insurance commissioner. The alleged bribes included a $25,000 check from Davister Corp. Jones said Phillips was never an officer, director or shareholder of Davister. But the U.S. Securities and Exchange Commission identified the company as being "managed by the same personnel who manage ... other private companies owned by Phillips or his family trusts.''

In September 1999 Fisher personally approved the sale of Tulsa-based American Reserve Life Insurance Co. to a Phillips-related company, authorities said.

Gene Phillips was interviewed twice by investigators from the attorney general's office, the grand jury's legal adviser, and Phillips' business associates, including Ron Akin (an officer of Davister), were subpoenaed to testify before the earlier grand jury. Akin appeared before the grand jury twice. Jones was successful in fighting efforts to force Gene Phillips to appear.

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