Gene Stipe:  ‘Oklahoma’s Man of Constant Sorrow‘ may eventually have more convictions under his belt than Billy The Kid, Jesse James, and the Dalton Gang.  OK, a slight exaggeration…but he does prove to be just as slippery as any of these original Oklahoma outlaws!

Related: KTOK on Stipe and the Feds

…so there will be no one left to indict me?!? This Wikipedia listing for Stipe shows a long history of his run ins with the law starting in 1968:

In 1968, Stipe was indicted on charges of federal income tax evasion for allegedly failing to pay taxes on $110,000 in income, but was later acquitted of the charges. In 1975, he was paid $100,000 plus expenses to assist William Con Sutherland in a bankruptcy case involving Sutherland’s vending machine empire. Stipe was accused by bankruptcy trustees of taking his retainer fee from illegally-diverted funds. In an out-of-court settlement, Stipe repaid $60,000 in order to resolve the dispute.

Stipe was briefly a candidate for the U.S. Senate seat being vacated by Republican Dewey F. Bartlett in 1978, but dropped out of the race, which was later won by Governor David L. Boren. The following year, he was indicted by a federal grand jury for his alleged role in securing a fraudulent Small Business Administration loan for McAlester Frozen Foods, a food processing company based in Stipe’s district. He was acquitted on those charges in 1981. While awaiting trial in the SBA loan case, he was indicted by another federal jury on charges of fraud, extortion, and conspiracy relating to his intervention in an extradition case involving a Colorado man.

In April 2003, Stipe pleaded guilty to federal charges of perjury, conspiracy to obstruct a Federal Election Commission investigation, and conspiracy to violate the Federal Election Campaign Act, relating to his alleged role in funneling illegal contributions to the failed 1998 congressional campaign of Walt Roberts in Oklahoma’s 3rd Congressional District.

The following January, he was sentenced to five years probation, six months home detention, 1,000 hours of community service, and fined $735,567. Furthermore, he also agreed to forfeit his license to practice law.

In September, 2007, federal authorities filed a petition seeking to have Stipe’s probation revoked as a result of his alleged ongoing relationship with a convicted felon. On September 28, a federal judge ordered Stipe, who suffers from hydrocephalus, diabetes, and prostate cancer, to undergo a mental competency evaluation at the United States Medical Center for Federal Prisoners in Springfield, Missouri, following a parole revocation hearing in which Stipe required prompting from his attorneys to answer questions, and according to the judge, appeared to be drugged or hypnotized.

Shortly thereafter, Stipe and his brother, Francis were indicted by a federal grand jury on charges of mail fraud, witness tampering, money laundering, and conspiracy, relating to their alleged role in a real estate deal involving a pet food company owned by Gene Stipe’s former business partner, Steve Phipps. The witness tampering charge stems from allegations that the Stipe brothers engaged in a conspriacy to buy the mortgage on a home owned by former Oklahoma State Representative Mike Mass in an attempt to influence his testimony in the case.

By Rep. Jason Murphey

A key figure in the ongoing federal trial for former State Senator Gene Stipe pled guilty this week to crimes related to the abuse of your taxpayer dollars. Because of the ongoing criminal case, past abuses of Oklahoma’s old guard politicians are becoming less and less of a secret.

I believe one of the key reasons for the exposure of these past abuses has been the dramatic shift in power in Oklahoma politics brought on by term limits. Those of us who are fighting to put an end to the abuses of the past face an increased likelihood of success, due in part to the fact that there are many new elected officials who have taken office in the past few years. Many of these individuals have not been corrupted by the political process. Unlike some of their predecessors, they are not career politicians. Oklahoma’s term limit law allows all representatives and senators to serve only twelve years in the Legislature. After that, they are under a lifetime ban from holding office in the Legislature again. I believe this new generation of representatives and senators is fulfilling one of the important visions of our nation’s founding fathers - the vision in which an average citizen dedicates a few years of his or her life to representing the people as a citizen-statesman. At the end of the term of office, the legislator returns to the normal world to live under the very laws he or she helped to create. This helps to ensure that legislators will be more representative of the people instead of becoming a class of the political elite.

As a result of the term limits law, the Legislature is very different from just a few years ago. Gone are many of the old guard power bosses who tightly maintained the status quo. These politicians could have stayed in office almost indefinitely and they held powerful committee chairmanships where they would bottle up reform-minded legislation. They have been replaced by a group of energetic professionals, many of whom wish to enact pro-growth policies (i.e. cutting taxes) to change Oklahoma for the better. And, should some succumb to the temptation to become part of the status quo, they will inevitably be replaced because of term limits. Read more…

Message from Chairman Jones

This week, convicted felon and former Senator Gene Stipe will appear before a federal judge in Muskogee facing the possibility of having his payroll revoked and going to prison. After many decades of alleged wrong doing, Stipe was convicted and removed from office in 2003, was given a suspended sentence, and has been on probation since that conviction.

We are now reading daily reports about another ongoing scandal involving Stipe, Stipe’s partner, former Democrat lawmakers, and several current high ranking elected Oklahoma Democrats including Attorney General Drew Edmondson, State Auditor Jeff McMahan and even Governor Brad Henry. The FBI met with our very own State Auditor for the third time last Thursday.

You have to wonder how a scandal this widespread could go on right under the noses of those officials who Oklahoma voters elected to keep it from happening. And second, why our state officials aren’t investigating the matter.

It’s actually pretty simple. The officials that could look into this mess are too closely tied to those responsible, and therefore they can’t see the forest because of the trees.

Attorney General Drew Edmondson and State Auditor Jeff McMahan (along with others) have accepted tens of thousands of dollars in illegal contributions from Stipe and his associates. Yet they will not remove themselves from the investigation. When the governor was asked to name an independent agent to do the investigation, Edmondson responded that the request was political.

Absolutely, Mr. Edmondson…this is political. It involves large illegal political contributions to your campaign and that of the state auditor. It is political Mr. Edmondson, because the campaign consultant for both you and the auditor has been named as a recipient of state funds, which were illegally funneled through the Rural Development Foundation. It is political Mr. Edmondson, and that is exactly why you should remove yourself and demand the state auditor be removed as well

By James Beaty
Senior Editor

Immunity for straw donors who made illegal campaign contributions in 2004?

That’s one of things Steve Phipps testified to during a hearing at the Pittsburg County Courthouse on Thursday.

Phipps was called as a witness in connection with a motion filed by his wife, Brenda Phipps, to dissolve Phipps Enterprises Inc.

The company was owned by former District 7 state Sen. Gene Stipe and by Steve and Brenda Phipps, until last March, according to testimony from Brenda Phipps.

She said her husband, Steve Phipps, signed his interest over to her in March as part of “estate planning” as he prepared to plead guilty to a charge in federal court.

Federal agents have served search warrants on property owned by Stipe and Steve Phipps as part of an investigation into corruption and related criminal activity in Eastern Oklahoma.

Read more…

After the trials, maybe they can be cellmates or have adjoining cells!

By James Beaty

Lawyers for former District 7 state Sen. Gene Stipe, of McAlester, say he should be allowed to continue to associate with Steve Covington — a man referred to as the convicted felon’s “best friend.”

They also want claims that Stipe violated his probation by associating with Covington tossed out of court.

Stipe’s attorneys filed papers with the requests at the Eastern District of Oklahoma U.S. Courthouse in Muskogee, where Stipe faces an Aug. 28 court date.

Covington not only worked as Stipe’s personal pilot for 20 years, but he also managed some of Stipe’s properties and served as a caregiver for Stipe and for Stipe’s first wife, Agnes, according to Stipe’s lawyers. Read more…

By Gary Jones
OKGOP Chairman

1) Larry Witt and Steve Phipps conspired to funnel corporate contributions into the 2002 State Auditor campaign of Jeff McMahan. FBI affidavits and witnesses have testified that such money was paid to them for the purpose making said contributions. Estimated totals range from $75,000-$100,000. These funds made up a large portion of McMahan’s total contributions and had a significant impact on the election results.

2) Steve Phipps met on numerous occasions in the office of the State Auditor with legislators including Mike Mass to discuss and arrange for state funds to be funneled into a scam non-profit foundation, Rural Development Foundation, located in an abstract company owned by Phipps and Gene Stripe in Antlers, Oklahoma. Both Mass and Phipps have pleaded guilty to federal charges and are now waiting sentencing to connection to the scheme.

3) After denying for months McMahan admitted to going on fishing and gambling trips paid for by Phipps. Such trips would constitute something of value received by an individual regulated by McMahan and his office and may be grounds for removal from office.

4) Duane Smith from the Oklahoma Water Resources Board has reported that he was called into a meeting with the State Auditor Jeff McMahan, Mike Mass and Steve Phipps. During the meeting Smith said he was advised that Mass had put wording in the agency appropriation bill to funnel funds to a trust authority setup by Phipps to aid in selling water from Lake Eufaula. McMahan advised Smith to help get that done and he would make the audit look clean. In 2006 McMahan asked the governor to perform an audit on OFRW. The audit failed to reveal the connection between McMahan and Phipps the principle person being audited and also failed to disclose items which should have been reported and in effect provided the cover-up McMahan had promised.

5) Larry Witt (Ry-son Oil) is seeking to purchase shares in several abstract companies owned by Steve Phipps. The sale of Phipps’ shares can not take place without approval of Jeff McMahan, State Auditor.

6) Witt was named in the university housing bond scandal involving Senate president Pro-Temp Mike Morgan. Morgan is also said to responsible for funneling state funds to but Stipe and Phipps’ train that is sitting and rusting in Guthrie.

Jeff McMahan and his office should be removed from the approval process as there exist a clear conflict of interest by McMahan in this matter.

A cause of action should be filed against Phipps, Stipe and Witt to recover state funds illegally obtained. The corporate assets of Phipps Enterprises and Corporate Finance Group should be frozen until such action has been litigated.

Related:

ObserverBlog: “The Education of Jeff McMahan”

From the McAlester News-Capital:

By James Beaty
Senior Editor

A court-appointed receiver in the lawsuit between former District 7 state Sen. Gene Stipe and his estranged business partner, Steve Phipps, has demanded that National Pet Products pay $310,000 in delinquent accounts to Phipps Enterprises, Inc.

“The deadline for a response has passed and lawsuits are being prepared to recover such substantial funds,” receiver Kraettli Q. Epperson said in documents filed at the Pittsburg County Courthouse.

National Pet Products is the dog food plant on the north side of McAlester built on property sold by Stipe, according to court documents and other records.

In his report, Epperson said Phipps Enterprises Inc. also owes a substantial amount of taxes.

Phipps Enterprises, Inc., is identified in court documents as the company owned by Stipe, of McAlester, and Phipps, who is from the Kiowa area. Read more…