By Tony Thornton Modified: June 11, 2008 at 8:33 am •  Published: June 10, 2008
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/> Jeff McMahan also gave conflicting accounts about two pieces of expensive jewelry Phipps bought for the auditor's wife, Kaitcer said.

During the second FBI interview, in June 2007, the auditor said Phipps had given his wife some earrings, but he figured they were costume jewelry worth maybe $50, Kaitcer testified. He said Jeff McMahan told him he wasn't aware of a ring Phipps bought for Lori McMahan. Lori McMahan later would tell the FBI her husband was present when the ring was given, Kaitcer testified.

Kaitcer said the auditor also denied that Phipps paid the McMahans' way for the Boston trip.

"Mr. Phipps is not a sugar daddy,” the FBI agent recalled Jeff McMahan telling him.

By the third interview two months later, the FBI had photos of the ring and earrings Lori McMahan had accepted from Phipps.

Phipps testified he paid a total of $2,140 for the two pieces.

The auditor acknowledged the ring, Kaitcer said. He said his wife told him she tried several times to give it back, but Phipps wouldn't take it.

Auditor ‘didn't want to know' source of campaign cash, agent says
Kaitcer said Jeff McMahan also saw his wife with cash, perhaps $5,000, to be used for signs during the 2002 campaign.

"He said he didn't know where the money came from and didn't ask, because he didn't want to know,” Kaitcer said.

By the third interview, the auditor also admitted knowing that someone helped pay their way to the 2004 Democratic National Convention, but he didn't know who it was.

Kaitcer said he interviewed Lori McMahan during the search of her home, and she admitted accepting cash from Phipps at least twice during the 2002 campaign. She also admitted knowing it was wrong, he testified.

Kaitcer said the auditor's wife also told him she twice tried to give Phipps $1,200 to cover their expenses for a 2003 trip to New Orleans, but Phipps wouldn't take it.

When pressed by Kaitcer, she told him she couldn't recall whether she really left the money on a coffee table for Phipps, "or whether I just told my husband that to satisfy him,” Katicer said, quoting Lori McMahan.

Kaitcer said the auditor's wife told him that she handled the family's financial affairs.

As for the $3,500 she received from Phipps through an intermediary for the Boston trip, Lori McMahan told the FBI she didn't disclose it as income, "because she'd have to disclose it to Mr. McMahan,” Kaitcer said.

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