Stipe Withheld Own Donation To McMahan Until Last Minute, Campaign Finance Records Show

SEVENTH IN A SERIES ~ To hear some tell it, then-State Senator Gene Stipe of McAlester and his abstracting empire partner, Steve Phipps of Kiowa, were "fund-raising machines" for Jeff McMahan, Democratic nominee for state auditor & inspector, in 2002, but Stipe and his brother withheld their own substantial donations to McMahan until the last minute. The $8,500 in donations are shown as being made on October 23, 2002, meaning they didn't appear on McMahan's finance report until long after the election was over.

Thanks in no small part to the $81,000 (at least) that Stipe, Phipps, their associates and abstract company employees poured into McMahan's 2002 campaign, McMahan defeated two Democratic primary opponents and edged out Republican Gary Jones in the general election. This year's contest is a rematch. Jones resigned as Republican State chairman to challenge McMahan.

Stipe, one of the most controversial characters ever in Oklahoma politics, was under federal investigation in 2002 for his (later) admitted role in funneling an estimated $300,000 of his own money into Walt Roberts' 1998 congressional campaign through straw donors. Stipe later admitted guilt to a string of federal charges, including the admission he tried to cover up what he'd done and lied to federal investigators. He was forced to resign from the Senate seat he'd held for almost 50 years, surrender his law license, and pay the maximum possible federal fine of about three-quarters of a million dollars. His brother, Francis, paid a $35,000 federal fine for his involvement in the scheme and State Rep. Mike Mass paid a $30,000 fine for his involvement.

At the time, Stipe and Phipps owned nine abstract companies centered in southeastern Oklahoma but including one in Stillwater they operated in partnership with a businessman there. The state auditor licenses and regulates abstractors, essentially having life and death control over them. McMahan's campaign finance reports on file with the Oklahoma Ethics Commission reveal, as previously reported here, that 220 abstractors and abstract and title company employees, poured at least $149,000 into McMahan's campaign, much of it in the critical primary election period. Several of the donors were involved in the controversial Rural Development Foundation which is under federal investigation; it was located at the same address as the Stipes-Phipp abstract company there and some of those involved in RDF were abstract company employees. RDF obtained more than a million dollars in state financing and questions are now swirling around how and why that occurred. Some suggest federal investigators are interested in a 2003 meeting allegedly held in McMahan's Capitol office attended by McMahan, Phipps and State Reps. Randall Erwin and Mike Mass. Sources claim the meeting was to discuss appropriations for RDF.

McMahan's finance report for the final election year 2002 period, covering the time frame October 22 to December 31, 2002, lists Stipe as donating the maximum $5,000 and his brother, Francis, as donating $3,500. The report was certified as correct and filed on April 28, 2003 by McMahan's campaign treasurer, Michael L. Doyle. The report's first page erroneously shows it covers the period "11/22/02" to the end of the year when in fact it covers the period 10/22/02 to the end of the year.

Was Stipe trying to hide his donation by waiting until the last minute? "I bet he just didn't want it out there for anyone to use against McMahan," said a veteran of Democrat-Republican wars in McAlester. "Worked, too, 'til just recently," he added, referring to The McCarville Report Online's articles detailing donations to McMahan from Stipe, Phipps and other abstractors.
The Oklahoman has reported extensively on the Stipe-Phipps connection, including the revelation, in May, that agents of the Federal Bureau of Investigation had swooped into Phipp's Antlers abstract company/RDF office and confiscated records last April.

2/20/2005 - 8:34:13 PM - Couldn't Make This Stuff Up - Posted By Brandon Dutcher, Oklahoma Council of Public Affairs

Tony Thornton reports today in The Oklahoman: "Former state Sen. Gene Stipe has spent the last year as an economic development consultant to fulfill his court-ordered community service obligation, records show. His work includes lobbying state officials and advising the McAlester economic development board about how to secure state and federal money." The mind reels.

But there's more. The bulk of Stipe's "community service" has consisted of "advising city officials and lobbying to obtain city, state and federal money for three projects: The Tandem Technologies plant, which is planned for construction on land owned by Stipe's brother, Francis Stipe; building an industrial access road that runs past the proposed biotech location and into the Steven W. Taylor Industrial Park, cutting through several pieces of property, including land owned by Francis Stipe; and reopening 60 miles of railroad tracks closed by Union Pacific. The line would provide an alternate source for transporting bomb-making materials....

"Records show Gene Stipe also received community service credit for work on two properties he owns or once owned," Thornton reported.

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