Gene Stipe linked to train sale<br/><span class='hl2'>Ex-lawmaker received $300,000 of taxpayers' money for restoration.</span>

©Copyright 2007, The Oklahoman

GUTHRIE — Former state Sen. Gene Stipe and a business partner collected $300,000 in state taxpayer money off the sale of seven railroad cars after Stipe arranged for the funding for an excursion train project, The Oklahoman has learned.

Six years later, the train cars sit abandoned on a track near the Guthrie train depot, having never been used for their stated purpose.

Two people confirmed they provided information last fall to the FBI about the train sale to the Guthrie Arts and Humanities Council. That indicates the sale may be part of an ongoing federal grand jury investigation involving Stipe.

A central figure said Stipe obtained $150,000 in 2000 through the Oklahoma Historical Society and the remaining $150,000 in 2001 through the Association of Central Oklahoma Governments, a quasi-state agency.

Records confirm the money went through those entities.

At the time, Stipe was head of the Senate Transportation Committee and generally considered one of the most powerful men in Oklahoma.

Upon promising money for the train, Stipe "said he'd found a train for us to buy,” said Tim Arbaugh, one of two Guthrie residents who led efforts to secure money for the train. Stipe didn't indicate that he owned the train until after his company received the entire $300,000 in state money, Arbaugh said.

"That's when he said, ‘Thanks for buying my train,'” Arbaugh said.

Documents obtained by The Oklahoman, including a letter written by Stipe, identify the seller of the train cars as Phipps Enterprises.

That company was owned by Stipe and Steve Phipps, a Pittsburg County businessman. Phipps recently assigned his ownership in the company to his wife.

Phipps Enterprises is at the center of the grand jury investigation, which initially targeted state money that went to a McAlester dog food plant, but now encompasses allegations of widespread political corruption based in southeast Oklahoma.

Former state Rep. Mike Mass recently pleaded guilty to a conspiracy charge and agreed to cooperate with federal prosecutors. Court documents identify Stipe and former state Reps. Randall Erwin and Jerry Hefner as other targets. All are Democrats.

Stipe resigned from the Senate in 2003. He later pleaded guilty to overseeing a scheme to pump more than $245,000 into Walt Roberts' 1998 congressional campaign. Federal prosecutors now are trying to revoke his probation in that case.

Project now an eyesore

Guthrie city leaders have floated the excursion train idea for at least 15 years as part of a larger plan to restore passenger rail service to an old, unused line running 43 miles, nearly to Enid. Stipe's help in obtaining the money rejuvenated hopes of that idea coming to fruition.

The train bought from Stipe's company included one box car and six passenger cars. They have become such an eyesore that a railroad company plans to destroy them if they aren't moved away from the depot downtown.

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