Judge Dismisses Holland-Frates Lawsuit

Oklahoma County District Judge Vickie Robertson has ruled in favor of the defendants in a lawsuit filed two years ago by Insurance Commission Kim Holland and dismissed Holland's lawsuit against them.

Holland filed the multi-count lawsuit against prominent Oklahoma City business executive Rodman A. Frates, his company C. L. Frates and Company, and three others. The lawsuit, filed August 2, 2006 in Oklahoma County District Court, accused Frates of fraud, breach of contract, negligence, civil conspiracy, breach of fiduciary duty and unjust enrichment.

The judge found the statute of limitations had expired in the lawsuit's contention that the defendants were guilty of professional negligence, civil conspiracy and allowing Hospital Casualty Company, of which Holland was the conservator, to sink into "deepening insolvency."

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Blackwell's Insurance Department Intervention Raises Questions About Ties To Christian Health Care Company

House Speaker Pro Tempore Gus Blackwell, an examination of a transcript of House proceedings and other documents reveals, last week tried unsuccessfully to convince Insurance Commissioner Kim Holland and her staff to intervene on behalf of an organization in regulatory trouble that also provides health coverage to Blackwell and his family.

Circumstances of the request have some at the Capitol invoking the case of former Insurance Commissioner Carroll Fisher. In 2004, lawmakers (including Blackwell) voted to impeach Fisher for, among other things, intervening in an independent hearing by personally assuming the role of hearing examiner and approving the application of the Gene Phillips Group of Texas. The Phillips group later gave Fisher about $20,000 in furnishings.

Four years later, Blackwell last week urged Holland and her employees to essentially duplicate Fisher's actions by intervening on behalf of an organization, Medi-Share, that's in regulatory trouble and also provides health coverage to Blackwell and his family. Blackwell has said that he and his family are members of Medi-Share and have been for two years.

On the floor of the House on May 23, Blackwell declared, "All I'm asking, and I called this morning the chief legal counsel [of the Oklahoma Insurance Department], is just withdraw your argument against the stay. Allow the stay to be put into effect for them to continue to operate while a higher court looks at this. He refused."

The controversy was the subject of a lengthy article in Tuesday's Journal Record in Oklahoma City. Reporter Janice Francis-Smith wrote that, "Oklahoma Insurance Commissioner Kim Holland shut down a Christian health care organization and lied about it, state Rep. Gus Blackwell told his fellow lawmakers on Friday in the chamber of the state House of Representatives. Holland, in a later phone interview, said she did not lie, but she had to take action regarding an organization that calls itself a 'ministry' but which the courts have determined behaves in every way like an insurance company." (Read the entire story at http://www.journalrecord.com/article.cfm?recid=89221.)

Blackwell's request to Holland's staff came as the House considered Senate Bill 1189, which, with a proviso, would allow the Florida-based, not-for-profit Christian Care Ministry’s Medi-Share program to resume doing business in Oklahoma. The bill does not automatically allow Medi-Share to go back into business unless it conforms to the law, which requires members to share directly, member to member, not member to Medi-Share and with subsequent disbursement to a member. The bill passed and is now on Governor Henry's desk for his action on it.

Due to a lawsuit filed by Oklahoma pastor Andy Bowman after Medi-Share denied him coverage for more than $27,000 in medical bills related to heart complications, District Judge Joe Vassar ruled that Medi-Share was in fact an insurance company and not merely a "medical bill-sharing ministry" as company officials claimed.

As a result of the court ruling, Holland issued an "emergency cease and desist order" that would allow the company to continue paying its members' eligible health-care costs while banning it from taking new members.

Medi-Share appealed the order through a two-day administrative law hearing conducted in November 2007. Following that hearing, Judge Leamon Freeman agreed that Medi-Share was operating as an insurance company.

That decision is now being appealed and Blackwell acknowledged on the floor of the House that he had attempted to enact legislation this year that would prevent regulatory oversight of Medi-Share.

However, Blackwell's efforts were thwarted, a fact he acknowledged on the floor of the House on May 23.

Sources say this is the second time Blackwell has attempted to use his power as speaker pro tempore to benefit an insurance entity under scrutiny for alleged ethical or regulatory transgressions.

In 2006, Holland supported legislation allowing a company to make commercial real estate loans based on a cap of 2 percent of assets, patterned after a national model.

However, legislation offered in a House committee that year would have raised that amount to 20 percent. Only three insurance companies, all tied to the Phillips family of Texas, sought the higher 20-percent cap.

In addition to his ties to Fisher, Phillips had a long history of regulatory problems and had faced federal fraud, conspiracy and racketeering charges at one point; those charges, however, were dismissed.

During the Fisher impeachment process, House officials reviewed documents that indicated Phillips and his associates had been involved in nine financial, real estate or insurance companies that went bankrupt, into receivership, or were the subject of litigation.

According to documents that became public during the Fisher impeachment process, Phillips and his associates had been the target of regulators or lawsuits in at least four states by 1999 - California, Florida, Texas and Utah.

Phillips' long history of regulatory troubles had led insurance officials to oppose his efforts to enter the Oklahoma market and engage in real estate speculation.

Although not a member of the committee hearing the Phillips' legislation in 2006, Blackwell as speaker pro tem has the ability to attend any meeting and vote on any piece of legislation, a rarely used power he employed to provide the deciding vote needed to pass the controversial Phillips' language out of committee.

Earlier this year, it was revealed that Blackwell was among House Republican leaders who attended a fundraising event at Phillips' Dallas home for GOP presidential candidate Mike Huckabee.

Blackwell has become a controversial figure. He was a candidate for House speaker to replace Lance Cargill when The Oklahoman revealed he had been repeatedly late in paying his property taxes. He said he mistakenly thought he had until March 31 to pay property taxes on his home and three rental properties in Goodwell. He said except for one or two years he had met that deadline, usually paying around February. He withdrew from the speaker's race following the revelation.

Although Medi-Share touts itself as a medical bill-sharing ministry, state regulators believe it is acting as an insurance company and merely using different terms, such as referring to premiums as members "gifts."

During the November 2007 administrative hearing, Ronald Baldwin, president of Christian Care Ministry (parent company of Medi-Share), testified that approximately 300 Oklahoma households representing about 1,000 citizens make payments to Medi-Share. Those Oklahomans pay an estimated $1 million annually to Medi-Share. Nationally, the company generated about $60 million in revenue in 2006, according to Baldwin's testimony, and the company kept 25 percent for "expenses." Baldwin said the Group Major Medical Sharing Trust, where all Medi-Share revenue is deposited, is located in the Bahamas.

Baldwin testified that Medi-Share had leased software from Eldorado Computing, Inc. to process "needs" submitted by members. He acknowledged that Medi-Share officials asked Eldorado to modify the software program to refer to "explanation of benefits" as an "explanation of sharing," and to change "claim number" to "need number."

Evidence presented during the hearing also demonstrated that Medi-Share would require payment of an "extra blessing" from members late making a monthly payment in a manner very similar to a late payment penalty at an insurance company.

Baldwin also testified that eight "elders" served as independent contractors and "were paid on the basis of folks joining Medi-Share," with some earning "over hundred thousand dollars" gross income.

During the hearing, Baldwin acknowledged that one Medi-Share official, John Reinhold, chairman of the board of Christian Care Ministry, was previously involved with Christian Brotherhood, a similar organization that ran afoul of state regulators in Ohio.

According to The Washington Post, an Ohio jury found that Christian Brotherhood Newsletter founder Rev. Bruce Hawthorn and other former officials defrauded the ministry. They were ordered to repay nearly $15 million spent on luxury houses, cars and high salaries.

Baldwin also testified that he and other employees of Christian Care Ministry are able to use health coverage through Aetna and do not have to rely on Medi-Share, although Medi-Share clients cannot have duplicate coverage.

Because Medi-Share collected and pooled member funds and then distributed them, as well as charging late penalties, state regulators feel the company is in fact an insurance entity.

Oklahoma regulators have not sought similar oversight of legitimate medical sharing ministries, such as Ministries International of Peoria, Ill., which allow individual members to contribute to other members needs on a one-to-one basis.

In addition to Oklahoma, rulings have been issued in Wisconsin, Montana, South Dakota, Illinois and Kentucky declaring that Medi-Share is an insurance company.

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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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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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Complaints Filed Against Kim Holland Attacker

From VoteLaw ~ The group Public Citizen has filed complaints with the Internal Revenue Service (IRS) and the Federal Election Commission (FEC) alleging that a political operative and his controversial group identified by TMRO as key players in the 2006 television attacks on Insurance Commissioner Kim Holland violated federal election law and the group's tax status.

The complaints name the nonprofit group Americans for Job Security (AJS). The complaints, which were also sent to congressional committee leadership as part of a request for an investigation into the issue, ask the IRS to revoke the group’s tax status and the FEC to fine the group for election law violations.

It's the same group implicated in placing robo calls against Mary Fallin and Denise Bode in the 2006 Republican congressional primary.

Americans for Job Security is registered under Section 501(c)(6) of the tax code, the category reserved for business leagues and trade associations. Groups that are registered under this section are prohibited from engaging in efforts to influence elections as their primary purpose. But AJS, which maintains no Web site and appears to have only one paid employee, spends millions of dollars on advertisements to influence elections without appearing to engage in any other substantive efforts, according to the complaint. While many groups registered under 501(c) of the tax code participate in some level of electioneering activity and others may have violated the law, Public Citizen has identified AJS as one of the most egregious offenders. In response, Public Citizen is asking that the IRS revoke AJS’s 501(c) status, collect back taxes for its undeclared electioneering activities and require it to pay penalties for violating its tax-exempt status.

In 2006, TMRO reported, "The president of the controversial Americans For Job Security, Mike Dubke, has been indentified by The McCarville Report Online as the man leading the $250,000 attack on State Insurance Commissioner Kim Holland.

"TMRO learned that the television commercials attacking Holland were placed by Dubke, a conservative Republican power broker who routinely launches attacks on Democrats, and sometimes moderate Republicans, in election years from his suburban Washington office in Olde Town Alexandria, Virginia.

"The commercials were placed through Crossroads Media, located at the same address as AJS. Dubke, over the last five years operating as an advertising agency, has placed attack radio and television commercials in races all over the country. He has been investigated, threatened and described as a 'political jackal' because he represents groups that don't disclose the sources of their money. He says that is deliberate, because keeping the sources secret means the debate is on his targets rather than his donors.

"AJS is located in Suite 555 at 66 Canal Center Plaza in Alexandria, VA. Crossroads Media, listed in Oklahoma television station documents as the agency on the anti-Holland commercials, is located in Suite 555 at 66 Canal Center Plaza in Alexandria, VA. A Federal Election Commission document located by TMRO lists Dubke as 'Crossroads Media/Partner.'"

In 2006, Attorney General Drew Edmondson said he'd reached a settlement with Americans For Job Security about robo calls placed against Mary Fallin and Denise Bode in the 5th District Republican primary and has found no evidence that any of their opponents was involved in the calls. Edmondson said AJS and vendor Advantage Inc. agreed to pay $3,000 each to cover investigative costs into the violation Edmondson alleged, that the calls did not contain the name of the entity sponsoring them in the proper place and did not contain a call-back telephone number. Edmondson said the investigation by his Consumer Protection Division concluded that "no other candidates were found to be associated with the calls."

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Holland Revokes Phipps' Insurance License

State Insurance Commissioner Kim Holland has revoked the insurance license of abstract company owner Steve Phipps, center of an ongoing federal investigation into illegal campaign financing that also involves former Senator Gene Stipe and Auditor and Inspector Jeff McMahan, who regulates the abstract industry. The investigation also involves three former Oklahoma legislators, including former Democratic Party Chairman Mike Mass.

Holland's administrative order was signed on Monday and released today.

The order cites Phipps' guilty plea and orders his license to sell title insurance revoked immediately. Holland's order states that Phipps, who entered the guilty plea in U.S. District Court in Muskogee in June, used "fraudulent and dishonest business practices" and demonstrated "incompetence, untrustworthiness and financial irresponsibility in the conduct of business in this state."

Phipps has pleaded guilty to mail fraud and reportedly is cooperating with FBI agents in the ongoing investigation. Results are being presented to a federal grand jury in Muskogee. Phipps and Stipe were partners in an abstract company empire that spanned the state. The investigation has centered on illegal campaign donations to federal and state campaigns and the funneling of state money to entities controlled by Phipps and Stipe, and subsequent payments from those entities to other of their enterprises and, apparently, to candidates for office.

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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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Bill Case Registers As Lobbyist

Former State Rep. Bill Case, Midwest City Republican who lost his race for insurance commissioner to incumbent Democrat Kim Holland, is now a registered lobbyist.

Records at the Oklahoma Ethics Commission show that Case registered as an agent of Capitol Gains LLC on December 27th.

Capitol Gains is owned by veteran lobbyist Bobby Stem of Edmond.

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Stephen Jones Defends Texas-Based 'Just The Facts America,' Says Controversial Entity Is His Client

Enid attorney Stephen Jones (pictured at right), in a letter to The McCarville Report Online, confirms that the secretive Texas-based "Just The Facts America" is his client and he defends it, writing, "my client acted fully within the law."

Jones responded to repeated mentions here of the group, headed by Texas Republican leader James B. "Jim" Cardle (pictured below left) of Austin, and continuing questions about its actions in launching an effort to defeat Democrat Insurance Commissioner Kim Holland last year.

The group erupted on the Oklahoma political scene when it placed tens of thousands of dollars in television commercials attacking Holland, who defeated Republican Bill Case in November. The group also created a website attacking Holland. Jones and associates donated thousands to the Case campaign.

There had been questions about the group and why its donors had not been revealed. Oklahoma Ethics Commission director Marilyn Hughes and Attorney General Drew Edmondson had both said they believe the group was required to reveal its donors and register with the commission. Jones said they were "mistaken."

"There was no legal obligation then or now to register unless the decision of the (U. S. District) Court is reversed by the (U. S.) Supreme Court," he wrote. He noted that the U. S. District Court for the District of Columbia had ruled "that the federal statute, unlike the Oklahoma Statute, did affirmatively require 501(c)(3), (4) and (6) organizations to reveal their donors when engaged in campaign communication was unconstitutional as a violation of the First Amendment."

Jones continues to disagree with the assertion the group is "mysterious." He wrote, "It is no more mysterious than any other...organization whose donors are protected by law from disclosure. Its officers and purposes are well known."

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Holland Declares State Of Emergency

State Insurance Commissioner Kim Holland has declared a state of emergency for insurance purposes, clearing the way for out-of-state insurance adjusters to begin helping those afflicted by the winter storm.

Her declaration grants out-of-state adjusters 90-day licenses to work with Oklahoma insurance companies work claims.

Earlier, Governor Brad Henry declared the entire state a disaster area and asked President Bush to issue a federal declaration; he did so in short order.

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Jones Says Donations Legitimate

Enid attorney Stephen Jones said a published report in The Oklahoman suggesting he tried to buy an Oklahoma County judge’s race is incorrect. He told the Enid News & Eagle he made contributions to several friends who were running for office this year.

In published reports, former Oklahoma County District Judge Susan Caswell claims Jones illegally provided large donations that helped Bill Graves defeat her in the November election. (Editor's Note: Caswell made no such claim; she is quoted as saying she's perplexed by the interest of out-of-county interests in her campaign.)

The donations reportedly are under investigation by the Oklahoma Attorney General’s Office and the state Ethics Commission. Jones said he has not been contacted by anyone regarding the investigation except the media. Jones himself is not listed as a contributor, but his wife, Sherrel, and his son and daughter are listed as contributors, along with four attorneys who work in his firm.

Six Texans who reportedly are associated with a client of Jones’, Dallas businessman Gene Phillips, also made contributions to Graves. Graves reported receiving nearly $60,000 from those sources, according to the published report.

The investigation centers on whether the donations were illegal, and Jones maintains they are not.

“I know what the law is. I’m lawyered up on the subject. They aren’t against the law. Anybody who knows what the law is, knows the story is incorrect,” Jones said.

Jones said Caswell is disappointed she lost the election. He said Bill Graves has been a family friend for 30 years. Jones has helped a number of family friends who have run for office. He is a member of the Oklahoma Republican State Finance Committee, and it is part of his job to raise money for Re-publican candidates.

“His race is not the only one I’m interested in. I was involved in about 60 races,” he said.

Jones and his wife, Sherrel, also contributed $2,500 each to the campaign of Dennis Hladik, who was elected to a Garfield County district judgeship. Jones family members also were regular large contributors on the federal level. In 2006, Sherrel Jones and Stephen Jones are listed as donating $10,000 to the Oklahoma Leadership Council. Jones also contributed $5,000 to the Cole PAC, and he and Sherrel both donated $2,100 each to Mary Fallin’s congressional campaign.

He said he also contributed to judicial candidates in Dallas County, Texas, whom he thought were outstanding. He also contributed to friends across the state.“This seemed to be a year where a lot of my friends were running,” he said.

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Attorney General, Ethics Commission Investigating Donors Linked To Enid Attorney Stephen Jones

Attorney General Drew Edmondson and the Oklahoma Ethics Commission are investigating donations made by associates of Enid attorney Stephen Jones to Oklahoma County District Judge Bill Graves, The Oklahoman reports.

Fourteen donors tied to Jones directly or indirectly gave Graves, a former State House member, more than $57,000.

Bartlesville elementary school counselor Terry Gann (Holmes), represented by Stephen Jones in a contentious Garfield County divorce case, gave $5,000 to Graves and $5,000 to Bill Case, GOP candidate for insurance commissioner. She did not respond to an inquiry about her donations by The McCarville Report Online and told reporter Clay to "contact my lawyer." She's among more than a dozen individuals associated with Jones who donated to Graves and Case.

Donors tied to Jones also gave an equally-huge sum to Republican Bill Case, who tried to defeat Democrat Kim Holland for insurance commissioner.

Reporter Nolan Clay of The Oklahoman writes, "State investigators are looking into whether a judicial race was bought...."

Clay reported, "Most of the donors declined comment or did not respond to requests for comments." None of the 14 donors connected to Jones live in Oklahoma County.

Graves (at left) told Clay, "He (Jones) would not do that sort of thing (make donations in the names of others). He's been a friend for a long time. He's helped me in past campaigns."

Former Judge Susan Caswell, defeated by Graves, said, "I don't understand why anybody from out of state or even out of this county would have an interest in a local judge race. It makes no sense to me."

Curiosity about the donations to Graves and Case from Jones family members and associates began following reports by TMRO and others last fall. The decision to open an investigation apparently came when officials noted some of the same donors gave to the Graves and Case campaigns, and the fact they gave the maximum allowed under law, $5,000.

Donors to Graves include Jones' son and daughter. They also include six Texans connected to Dallas businessman Gene Phillips, a Jones client. Clay reports that a former employee of Jones, Daniel Rath, was approached by investigators on November 1st, and asked about Jones, Phillips, and former Insurance Commissioner Carroll Fisher.

Through one of his law firm associates, Jones was tied to attacks on incumbent Insurance Commissioner Kim Holland by a secret Texas group, "Just The Facts America" headed by GOP activist Jim Cardle of Austin. The activities of that group remain under scrutiny by some, TMRO has been told. A new state multicounty grand jury headed by Edmondson is scheduled to convene later this month.

To access TMRO's stories about Jones last fall, just click on Jones' name in the labels list.

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JTFA Attorney Tied To American Insurance Association President, Americans For Job Security

A Special Report By Mike McCarville ~ Washington attorney Benjamin L. Ginsberg's role as legal counsel for the mysterious Texas group "Just The Facts America" indicates JTFA's backers are among the nation's foremost Republican high rollers, and our inquiries show a surprising connection to a second group that's been involved in Oklahoma politics this year. Ginsberg also played a role in the controversial "Swift Boat Veterans For Truth" effort in the 2004 presidential election, a connection certain to be noted by Democrats, and, via other another connection we found, has a long-standing, personal, professional and direct connection to the president of the American Insurance Association.

First, the JTFA: It is the group behind the joint Internet-television commercial attack on Oklahoma Insurance Commissioner Kim Holland, a Democrat appointed by Governor Brad Henry and facing her first election campaign. JTFA's front man is Texas Republican James B. Cardle, a member of Texas Governor Rick's Perry's campaign steering committee and member of a health care services study in Texas five years ago. The attack includes allegations that Holland's taking donations from those in the insurance industry she regulates (true, her Oklahoma Ethics Commission reports show), that she's had herself reimbursed for mileage on her personal vehicle (apparently true, based on Office of State Finance documents, the argument being that she was fulfilling her duties on the trips), that she's used her staff to campaign on state time (this allegation is contained in a tort claim filed by her former executive administrative assistant earlier this month) and that she doesn't meet the educational level required for many OID employees (she's a high school graduate, while some OID positions require a college degree).

That JTFA is well-funded is obvious; records at Oklahoma television stations show the initial television commercial buy was about $150,000. Sources with whom TMRO talked say they expect the total expenditure will top $250,000 before the attacks are over. Because JTFA filed in Texas as a non-profit organization just 36 hours before the attack began, it is not required to disclose the names of those who are members, or the source of the group's funding. Thus, it is a secret entity.

Attorney General Drew Edmondson criticized the group, saying it has provided "no information as to who is paying the bills. The public has a right to know what interests in Texas want to elect a new insurance commissioner. Everyone has a constitutional right to free speech, but we have a right to pull them out of the darkness and into the sunshine of public disclosure."

Ginsberg's involvement in the controversy, revealed when he fired off letters to Oklahoma television stations and to the executive editor of The Oklahoman, Sue Hale, tweaked The McCarville Report Online's curiosity; Ginsberg is among Washington's most expensive, well-connected and influential lawyers. What's his interest in the Oklahoma insurance commissioner's race? we wondered.

Our search for information about Ginsberg's role in JTFA turned up a second connection to Oklahoma politics, a fresh one involving those controversial "robo-calls" in the Republican primary for Congress in the 5th District. And a third one that may tie directly to the attacks on Holland.

We've known of Ginsberg for years; he's a legal icon in Republican circles. One Washington consultant, asked about Ginsberg, said that retaining him requires "deep pockets and even deeper connections." And he warned: "Be careful. He's not some Oklahoma rube attorney."

From Wikipedia: "Benjamin L. Ginsberg, partner for Patton Boggs, LLP, represents numerous political parties, political campaigns, candidates, members of Congress and state legislatures, Governors, corporations, trade associations, vendors, donors and individuals participating in the political process.

"In the 2004 and 2000 election cycles, Ginsberg served as National Counsel to the Bush-Cheney presidential campaign. In 2000, he played a central role in the Florida recount. He also represents the campaigns and leadership PACs of numerous members of the Senate and House, as well as the Republican National Committee, National Republican Senatorial Committee and National Republican Congressional Committee. He serves as counsel to the Republican Governors Association and has wide experience on the state legislative level from directing Republican redistricting efforts nationwide following the 1990 Census and being actively engaged in the 2001-2002 round of redistricting.

"In 2004, Ginsberg gave legal advice to the famed 527 group Swift Boat Veterans for Truth. Though his simultaneous activities with the 'Swifties' and the 2004 Bush Campaign could be considered questionable, his activities were not illegal. Nonetheless, Ginsberg resigned as legal counsel from the Bush Campaign after his position was made public.

"He came to Patton Boggs in 1993 after serving for eight years as counsel to the Republican National Committee, the National Republican Senatorial Committee, and the National Republican Congressional Committee. Prior to entering law school, he spent five years as a newspaper reporter for The Boston Globe, Philadelphia Evening Bulletin, The Berkshire (Mass.) Eagle, and The Riverside (Calif.) Press-Enterprise.

"Ginsberg appears frequently on television commenting on law and politics. He is currently a Fellow at the Institute of Politics, Kennedy School of Government, Harvard University.
He is well-known as having been a significant force behind the Republican Party's efforts to redistrict state congressional districts in favor of Republican candidates. Ginsberg has lovingly named his dog Gerrymander.

"Ginsberg is a 1974 graduate of the University of Pennsylvania. At Penn, he was very involved in the school's prestigious newspaper, The Daily Pennsylvanian, where he served as a reporter (1970-72), contributing editor (1972) and editor-in-chief (1973)."

Second, Americans For Job Security: Among Ginsberg's numerous connections is a tie to the group "Americans For Job Security." Remember that during the GOP 5th District primary, "robo-calls" from AJS were placed that attacked Corporation Commissioner Denise Bode and Lt. Governor Mary Fallin. The other four candidates in the primary race weren't mentioned, fueling speculation that one of them was behind the calls. The other candidates were State Rep. Kevin Calvey, Oklahoma City Mayor Mick Cornett, State Rep. Fred Morgan and Dr. Johnny Roy; most of the finger-pointing was aimed at Cornett, who disavowed any knowledge of the calls. Here's what The Hill in Washington reported about the controversy: "The race could also be colored by an investigation into potentially illegal prerecorded telephone messages attacking Fallin and Bode that were placed earlier this week. State Attorney General Drew Edmondson issued a release Tuesday saying the calls might have broken the law because they didn't give recipients a contact phone number for the organization placing them, Americans for Job Security, which is based in Alexandria, Va. The release said the calls might violate the Telephone Consumer Protection Act and could lead to action in criminal or civil court. Americans for Job Security is a nonprofit issue-advocacy group and is exempt from the TCPA. Reached by The Hill yesterday, President Michael Dubke said the attorney general's office told him it was not investigating his organization but instead making sure one of the other candidates wasn't behind the calls. Dubke said the attorney general's office told him one of the candidates had done prerecorded calls incorrectly in the past, and he got the impression the office was making sure that candidate wasn't responsible for the calls. Dubke said only Americans for Job Security paid for the calls."

Third, the American Insurance Association: Americans For Job Security was founded with a $1 million donation from the American Insurance Association, records located by The McCarville Report Online show. Like JTFA, AJS takes great pains to hide the names of its donors and the sums they provide. Here's what the Campaign Finance Institute reports about AJS: "Americans for Job Security, a 501 (c)(6) trade association, grew out of the Coalition, a loose confederation of business groups that ran issue ads in 1996 to oppose the AFL-CIO's $35 million campaign. After the Coalition split in 1997 over a dispute over strategy, Robert Vagley, president of the American Insurance Association (AIA), formed Americans for Job Security. The AIA contributed $1 million to found AJS; the American Forest and Paper Association also gave $1 million. David Carney, onetime political director in the Bush White House, serves as executive director of AJS. Michael Dubke, former head of the Ripon Society, is the president of AJS. Benjamin Ginsberg, counsel to AJS, was also counsel to George W. Bush's presidential campaign. Others associated with AJS include Republican consultant Eddie Mahe and Leigh Ann Pusey, a former aide to Newt Gingrich, who now serves as AIA's chief lobbyist."

The Texas Observer, writing about the veto of bills by Governor Rick Perry in 2001, took note of the interest of AJS officials in insurance legislation: "David Carney (also a consultant to Perry's campaign), the former political director of the first Bush White House, now heads Americans for Job Security. Robert Vagley, president of the Washington-based American Insurance Association, formed the group in 1998, to counter the influence of increased labor spending in Congressional elections. The group specializes in issue ads, spending $10-12 million in 2000 to take issues like 'regulatory reform' straight to the public. Benjamin Ginsberg, an attorney with George W. Bush's presidential campaign, is also affiliated with the group. Also killed in the so-called 'Father's Day Massacre' veto bash was another insurance reform, HB 2430, which would have funded an ombudsman position to help Texans navigate the complex health care system and protect their rights. Bill sponsor Elliott Naishtat summed up the fate of the bill, which had broad bi-partisan support, in one line: 'The insurance industry didn't like it.'"

There's more about that "Father's Day Massacre" on June 17, 2001, when Perry veoted 78 bills. Here's the analysis of the Austin Chronicle on two bills the insurance industry opposed and Perry vetoed: "HB 1862: Prompt Payment for Health Care Providers - This veto pissed off doctors, now at the mercy of HMOs for timely reimbursements under multiple and confusing rules. The gov complained that the bill would allow doctors to sue insurers rather than using binding arbitration -- where the insurers always win. Translation: the insurance lobby owns the gov. HB 2430: Insurance Ombudsman's Program - Another Naishtat bill, developed over many months with input from across the board, created a fledgling program to help consumers navigate insurance problems with state help. Perry said he vetoed it because it was 'insufficiently funded' -- but that principle would end every state program except corporate welfare. This looks like a vindictive chop with a clumsy ax. Fingerprints: the insurance lobby."

At the time Ginsberg was legal counsel to the Bush-Cheney '04 campaign, its chairman and his obvious associate was former Montana Governor Marc Racicot, who served from 1993 to 2001. He previously served as the state's attorney general. Racicot was chairman of the Republican National Committee from January 2002 to July 2003. In 2000, Bush rushed Racicot into Florida to take charge of his vote recount effort; the attorney he worked with: Ginsberg. In 2004, when Ginsberg resigned as legal counsel to the Bush-Cheney campaign after his connection to the Swift Boat Veterans for Truth was revealed, Racicot released a statement calling Ginsberg a "friend, public servant and statesman."

Today, Racicot is president of the American Insurance Association.

The registered lobbyist in Oklahoma for the American Insurance Association is attorney Justin Whitefield, listed as "Of Counsel" to former Attorney General Larry Derryberry's law firm. Whitefield's firm, his lobbyist registration on file with the Oklahoma Ethics Commission shows, is Capital Resource Group, located at the same address as Democrat Derryberry's law firm on North Lincoln. Whitefield also was a partner with prominent Republican Bob Funk (founder of Express Personnel Services) in the purchase of a $450,000 yearling horse earlier this year and of two other horses for $600,000, auction results posted by the 2006 Keeneland September Yearling Sale and the 2006 Fasig-Tipton Selected Yearling Sale show.

Another interesting twist is that the national survey research firm shown as working for AJS in 2004 is the Tarrance Group, the same firm that now polls for Fallin in Oklahoma. Thus, the incongruity of AJS attacking Fallin, the client of a polling firm it has used.

Ginsberg did not respond to our earlier questions about JTFA; thus ignored, we didn't ask for his comments for this story.

Sources used in preparing this report included, but were not limited to: Wikipedia, stealthpacs.org, Campaign Finance Institute, The Washington Post, PattonBoggs.com, The Hill, Congressional Quarterly, opensecrets.com, Public Citizen, Americans For Job Security, Oklahoma Office of State Finance, Oklahoma Insurance Department, Oklahoma Ethics Commission, Human Events, Texans For Public Justice, Wall Street Journal, Omaha World-Herald, bloodhorse.com, warandpiece.com, American Insurance Association, kmax.blogspot.com, answers.com, New York Times, The Nation, Texas Observer, counterpunch.org, Detroit News, San Diego Union-Tribune, Austin Chronicle, martindale.com, findlaw.com, sourcewatch.org, Newsweek, and itaa.org, plus confidential conversations with U, V, W, X, Y and Z located in Alexandria (VA), Austin (TX), Oklahoma City, Potomoc (MD) and Washington.

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Texas Ethics Commission Fined JTFA Spokesman

Records in the Texas Ethics Commission reveal that James B. Cardle, spokesman for the controversial "Just The Facts America" entity that is attacking Oklahoma Insurance Commissioner Kim Holland in television commercials and on a website, was fined $500 earlier this year for failure to file a report on time.

Cardle, a conservative Republican activist who apparently heads the mysterious JTFA, was levied the fine for failure to file a semiannual report that was due on January 17, 2006 for his Texas Free Enterprise Fund.

He apparently appealed the fine, but the Ethics Commission voted 7-0 to enforce it, minutes of its May 12th meeting report.

JTFA was formed about 36 hours before the Holland attack commercials began to air. Its members, and thus the source of the $150,000-plus that's being spent in an effort to defeat Holland, are not known. It is registered in Texas as a non-profit entity.

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