FBI visits auditor
FBI visits auditor

By Tony Thornton Comments 0
Published: August 24, 2007

State Auditor and Inspector Jeff McMahan said FBI agents who met with him Thursday in his state Capitol office have not told him whether he is the target of an investigation.

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Jeff McMahan State auditor and inspector regulates abstract industry.

The agents spent about 90 minutes in the auditor's office before leaving at 10:30 a.m. At least one was carrying a briefcase and a manila envelope.

It couldn't be determined whether the agents served a search warrant. McMahan's spokeswoman, Terri Watkins, repeatedly declined to answer whether a search warrant was delivered either to the office or McMahan's home.

"There's nothing I can provide you with on that. Call the FBI,” Watkins said.

"No records have been seized from this office,” she said. "They did not seize anything, period.”

An FBI spokesman said it is agency policy to neither confirm nor deny active investigations.

Watkins would not say whether McMahan or anyone else in the office provided records voluntarily. She declined to make McMahan available for comment after the FBI agents left.

Watkins initially said no one in the auditor's office received a subpoena. She later declined to say whether anyone received a subpoena.

Thursday is believed to be the third time the FBI has interviewed McMahan.

McMahan previously said an agent talked to him more than a year ago. Watkins said the FBI visited a second time, but didn't take any records, on June 25.

As for Thursday's visit, she said an agent called McMahan on Wednesday and said "they wanted to come by and say hi.”

She said no one in the office but McMahan was interviewed by the agents Thursday.

Auditor took trips with conspirator

McMahan has been mentioned in the investigation because of his relationship with Steve Phipps, a Pittsburg County businessman.

Phipps and several associates and employees contributed heavily to McMahan's first campaign for the auditor's job in 2002.

The auditor confirmed in March that he had taken three trips with Phipps:

• A guided striper bass fishing excursion at Lake Texoma in 2002 with Phipps and then-state Auditor Clifton Scott. Phipps paid for the one-day trip.

• A trip to New Orleans, possibly in the spring of 2003, involving Phipps and McMahan and their wives. Watkins said each couple paid their own expenses.

• A bus trip by McMahan and his wife with Phipps and some of his employees to a casino hotel in Biloxi, Miss., in 2002 or 2003. Phipps' attorney said that trip actually occurred in 2004. McMahan said the trip was to provide a private educational course for Phipps and his employees in several abstract offices. Phipps paid the McMahans' meal and lodging expenses.

The auditor's office regulates the abstract industry.

State Ethics Commission rules prohibit McMahan from receiving anything of value from people he regulates.

Phipps pleaded guilty in June to a conspiracy charge alleging he paid kickbacks to three former legislators for their help in earmarking state taxpayer money to his businesses.

Court records identify the legislators as Mike Mass, Randall Erwin and Jerry Hefner. All are Democrats, as is McMahan.

FBI agents' affidavits allege Phipps' gambling machine company, dog food plant and a nonprofit foundation received about $2.8 million in state money between 2002 and 2005. Mass recently admitted in federal court to receiving kickbacks from Phipps. He awaits sentencing on a conspiracy charge.

Phipps gave the maximum $5,000 contribution to McMahan's 2002 campaign. Numerous people connected to Phipps and his estranged business partner, former state Sen. Gene Stipe, contributed amounts ranging from $200 to $5,000.

The FBI alleges Phipps and Stipe had a longstanding practice of violating campaign contribution limits by using "straw donors” — people who gave under their own names but were reimbursed by Phipps and Stipe.

Court records allege the men gave $34,600 to Dan Boren's 2004 congressional campaign through 21 straw donors.

Fifteen of those people also gave $35,863.89 in cash and in-kind contributions to McMahan's 2002 campaign, according to records at the Oklahoma Ethics Commission.

Stipe is on federal probation for a previous straw donor scheme involving Walt Roberts' unsuccessful congressional bid in 1998. Federal prosecutors are seeking to revoke his probation, claiming in part that Stipe organized the Boren contribution scheme a month after his sentencing.

Boren and the FBI have indicated Boren had no knowledge of the alleged scheme.

Contributing: Michael McNutt and

Ann Weaver, Staff Writers