McAlester may face $13M quandary
Council will address alleged misspending of excess tax revenues

BY RANDY ELLIS
Published: December 2, 2008


McAlester after an ice storm in January, 2007 - Photo by Jim Beckel

McALESTER — The McAlester City Council has scheduled a special meeting today to discuss a $13 million financial crisis created by 15 years of allegedly misappropriating excess sales tax revenues.

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The meeting is set for 6 p.m. at City Hall.

Beginning in 1992, McAlester voters approved a series of penny sales tax issues with proceeds designated for making debt service payments on capital improvement bonds. The bonds were used for things like street, sewer and water improvements.

The ballot language called for any excess sales tax revenues — amounts beyond what was needed to make debt service payments — to be collected by the city and used to pay the bonds off early, contends Steve Harrison, former chairman of McAlester’s Audit and Finance Committee.

The city received an audit last week showing McAlester has collected more than $14.4 million in excess sales tax revenues since 1992.

However, instead of setting the money aside to pay off bonds, city officials put the money in the general fund and spent it for a variety of purposes.

Taxpayer suit possible
The council in February halted the questionable practice, retroactive to July 2007, and began setting aside new excess sales tax money in a separate account to be used to pay the bonds off early. More than $1.35 million has accumulated in that account, said Sherry Alessi, McAlester’s assistant finance director.

That leaves more than $13 million that may have been spent inappropriately.

If city officials don’t correct the situation, they could be hit with an expensive taxpayer lawsuit, said Harrison, a retired certified public accountant.

"It depends on how you interpret it,” McAlester Mayor Kevin Priddle said.

Priddle said some bond attorneys have agreed with Harrison’s position, while others have contended excess sales tax revenues can be spent for other needs.

"I’m anxious to see what our city attorney recommends,” Priddle said.

City attorney William J. Ervin did not return phone calls seeking comment.

If the city has to come up with $13 million, it would be quite a blow, since the city’s entire budget is less than $34 million.

It would take several years to set aside that much money, Priddle said.

Priddle said the council also will hear Ervin’s legal opinion on another audit that indicated the city may have misspent $3.2 million in economic development bond proceeds. Other auditors have placed the amount of misspent economic development bond funds at less than $900,000, he said.


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c.Oklahoma City Re: your comments to bryan "why isn't it here in OKC or even Tulsa" "can't find a one person standing up straight who will tolerate this kind of behavior in western Oklahoma." I hate be the one to break the news to you, me and the rest of the state are standing for far more than McAlester. $66 million going to Altus, $18 million for Rocketplane in the Burns Flat area, $27 million for Greatplains Airline in Tulsa. Only part of that scammed prior to 2007 using loopholes in our tax credits for economic development program. We have records of another $330 million taken in 2006. A September 2007 DOK letter exposing another $300 million Foxborough fund promising $2 for every one invest. This comes to $600 million. Tax credit documents obtain showing another 230 million claimed to be invested in order to use the same $2 for $1 loophole. That makes another $460 million. The only difference between McAlester and us, some in McAlester have taken their heads out of the sand and started asking some questions. We are living in denial and disbelief. Call your state lawmakers and ask them how much is going to the tax credit incentive program and where the money is going. Officially they have no way of knowing. They passed a law that prevented them from knowing.
Nick, Norman - Dec 2, 2008 at 11:43 pm
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Find out who expects to profit from the outcome. Where the most funding is coming from and who exactly can get to it whenever necessary. If it is wish in one hand and air in the other then, it's no good...
Candace, Lakeland - Dec 2, 2008 at 11:08 pm
Baloney, bryan. McAlester is the arm pit of this Great State. If this kind of corruption was so prevalent, why isn't it here in OKC or even Tulsa ??? And you can't find a one person standing up straight who will tolerate this kind of behavior in western Oklahoma. Just who do you think you'r kidding, Mayor Priddle, with your "it depends on what the definition of is is" answer ???? Go to jail, go directly to jail, Priddle.
c, Oklahoma City - Dec 2, 2008 at 8:43 pm
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Sallie, I'm so glad you are obsessed with my postings. Maybe you'd like to have lunch sometime so you can worship me in person?
Cooter, Cooterville - Dec 2, 2008 at 1:00 pm
Gerald, the pole you are talking about should be used to run the officers out of town on for the mess they made.
Candace, Lakeland - Dec 2, 2008 at 12:28 pm
Cooter, you leave a zinger without explantion or thought. I have read your posts many times and am truly interested in your opinion on said subject manner.
Sallie, Del City - Dec 2, 2008 at 12:05 pm
Wow, bet being unemployed gives you two losers lots of time to come up with these zingers.
Cooter, Cooterville - Dec 2, 2008 at 11:48 am
Thank you D, thank you John. I do not live in the area, but I have no doubt this corruption is alive and well in Oklahoma County. Your insight has given me areas/thoughts to further investigate regarding my own county.
Sallie, Del City - Dec 2, 2008 at 11:40 am
All the criticism for McAlester, before this turned into a personal trashing, is justified. That is until we realize we live in a glass house. Paul's first comment "citizens who keep track of stuff like this". Did you know the state is being taken for $100s million a year through a tax credit scheme operating through our economic development initiative? The act creating the program requires the entire program be kept secret, from not only the public but lawmakers and all state officials, but one, the gate keeper.. See Senate Bill 1577 passed in 2006, that explains it all. You can download a copy from http://prowlingowl.com We have no clue how much is going and where the money is going. This program although stating new business investors can claim up to 30% in tax credits has another clause stating they can take 200% of the intended investment in tax credits. Another clause that says they only need to invest 50% of what they intended. Meaning these investors can take and sell, for cash, 4 times the amount they plan to invest. Keeping 75% of public funds to split among themselves. Tax credits are off the books and can be sold for hard cash. Oklahoma has no laws that prevent state officials from being involved in companies receiving these tax credits. That explains why lawmakers hide the info from themselves, i.e., a Sargent Schultz defense. The program operates in a totally automatic mode void of any oversight, monitoring or accountability. State officials response: this creates jobs for the state and we know of nothing illegal occurring. There is much more, but I will stop here and those who are interested can go to the prowlingowl.com. Hard to fathom? Just like the folks in McAlester who were hearing rumors but refuse to believe.
Nick, Norman - Dec 2, 2008 at 11:31 am
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The people responsible for this fiasco have left town without paying their bar tabs. Dale Covington (former mayor) lives in Edmond. He was at the helm when all these dark and seedy deals went down. He was a bank officer at FNB and had a prominent office to the right as you walked into the main branch on Choctaw. (By the way, the photo above is looking South on Main right at Choctaw. You see a sign for Humprhey's. Just next door is Lalli's plumbing. He's Dino Lalli's uncle. The reason all this happened is because for the past 15 years the citizens of McAlester allowed their leaders to play craps with the bond funds. I've been preaching the Stipe crime spree ever since this website allowed open comments and I submitted reader comments many years prior. I've met with Brad Edwards, Lance West, Terri Watkins, FBI agents , a couple OSBI agents, several Little Dixie mayors and legislators, sheriff deputies, and a plethora of McAlester residents. One thing stands true. During the time when bond money and city funds were embezzled, everybody turned a blind eye. At the same time Stipe and the Democratic Party of Oklahoma was perpetrating the largest voting fraud in this nation's history. Kayln Free was installed into office with an absolute decree. She was NOT elected and there's a mountain of proof in the absentee ballots. The Colonel Walt Roberts deal was a tip of the ice berg. Why he went to prison is a total surprise to me. What Stipe did for him and vice versa was status quo for the past 40 years in Little Dixie. Why all of the sudden someone took notice is just plain ludicrous. If Little Dixie citizens wanted political decisions and races to be decided by a hand full of leaders, then by all means that is the way is should be. The Democratic Party of Oklahoma can and should decide who leads this region. I am not sure why they even go to the trouble of having elections as it wastes money, and I am as serious as I can be. McAlester city manager, Randy Green, served his time for embezzling city funds, Stipe has an ankle beeper, his brother died mid sentencing, Mike Mass has served his time for his crimes, the former sheriff Don Hass is now a police captain, Kayln Free is no longer a DA after being laughed out of the office, Wanda and Clark Bass are both dead, and now a new crop of Little Dixie leaders get to pay the tabs of all those people. The next chapter is being written.
John, Stigler - Dec 2, 2008 at 11:30 am
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Gerald...you know...living large...the commercial for male enhancement that I'm sure cooter knows about. His personal "stimulus package" only known to goats around cooterville.
OK, Lahoma - Dec 2, 2008 at 11:28 am
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I guarantee if you go down to Krebs, sit down and wait til the "Dixie Mafia" comes in for their once a month feast, you will find out what is going on in the Big Mac town
Candace, Lakeland - Dec 2, 2008 at 11:27 am
Seems as though Stipe trained the others very well.
Sallie, Del City - Dec 2, 2008 at 11:22 am
Cooter...Living Large?....what decade did you escape from? Candace, go back to your pole dancing and leave the adult conversation to the grown-ups
Gerald, Duncan - Dec 2, 2008 at 11:19 am
Gerald, Duncan and Ok Lahoma = Societal rejects whose idea of living large is buying a bigger pant size because the old one split in the crack.
Cooter, Cooterville - Dec 2, 2008 at 11:14 am
Cooter can't leave because he has a flat on the passenger side of his house. Maybe next year when obamas stimulus starts flowing in.
OK, Lahoma - Dec 2, 2008 at 11:09 am
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Sounds like you've been there, done that.
Candace, Lakeland - Dec 2, 2008 at 11:04 am
If Oklahoma is so offensive to you guys, you are always free to hop into your used Yugos and drive west until you get to California....where you guys probably belong anyway
Gerald, Duncan - Dec 2, 2008 at 10:49 am
Sounds like there "city of cards" are falling apart... Who called the "special" meeting? Its suspicious since Gene Stipes just got out of the looney bin.
Candace, Lakeland - Dec 2, 2008 at 10:38 am
Is this a grate state or whut? At least we got them Sooners!! We can live in a cardboard box as long as our savior Bob Stoops wins the title!! YEEEHAW!!
Cooter, Cooterville - Dec 2, 2008 at 9:48 am
Mere peanuts compared to what happens in Okay See...
Kevin, Oklahoma City - Dec 2, 2008 at 9:33 am
Why do you guys live here?
AngelGirl, Ninnekah - Dec 2, 2008 at 9:30 am
A lawyer will say just about anything if you give him enough of the pot!
Candace, Lakeland - Dec 2, 2008 at 9:29 am
" He is a thief who steals time from his employer to vomit this blog. I sit next to him. I know who he is. Charles, Oklahoma City - Dec 2, 2008 9:07 AM" I guess then you are stealing from the same employer, right Charles???
paul, yukon - Dec 2, 2008 at 9:24 am
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Mister is a pesimistic socialist who spews negative propaganda for no personal reason except his own warped temperment. He is a thief who steals time from his employer to vomit this blog. I sit next to him. I know who he is.
Charles, Oklahoma City - Dec 2, 2008 at 9:07 am
Are you sure this is a picture of McAlester?
Bruce, Coweta - Dec 2, 2008 at 9:00 am
Another pathetic example of money corruption in this pathetic state. I wonder how many other towns face the same rap.
Cooter, Cooterville - Dec 2, 2008 at 8:57 am
OOOOOOOOOOOOOOklahoma where the thieves(democrats)come sweeping across our wallets!!!!!!!! So what's new? The democrocks have had they way with the tax payers since statehood. Dumb ass okies!They can't even put Gene Stipe away,permanently.
Jerry L., Guthrie - Dec 2, 2008 at 8:52 am
that should read political curruption! Sorry got distracted.
Bryan, Oklahoma City - Dec 2, 2008 at 8:27 am
oh what a tangled web we weave when we decieve. As mister eluded to in a previous post... This state has a great history. A history of lies, coruption and political. Where is the anarchy, the pitchforks, the torches ablaze with fire! Sadly "Okies" sit idlely by and watch there tax dollars go up in preverbial smoke. It must be either because they are uneducated, complicit or maybe worst of all they don't care! This article is a very sad reality in this state.
Bryan, Oklahoma City - Dec 2, 2008 at 8:26 am
I couldn't have summed it up any better myself, Mister... Your eloquence with words and verbage is to be commended, it's obvious you weren't schooled in Okie Land...
paul, yukon - Dec 2, 2008 at 7:43 am
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From what I can tell Paul, southeast Oklahoma is the veritable " cream of the corruption " crop. The part they call " Little Dixie " is where the rest of the politicians and good ol' boys from the other parts of Oklahoma go for " finishing school ". What can you say about a state founded by land swindlers though ? The seeds were laid well before we were born when the scum of the states and territories surrounding " Indian Territory" vomited its dregs on the " land of the red dirt " in various land runs.
mister, bogata - Dec 2, 2008 at 7:34 am
This wouldn't have happened if Gene Stipe was still in charge.... darn rank amatuers.
Jonbonjovy, Oklahoma City - Dec 2, 2008 at 7:15 am
So politicians lied to citizens of Okie land? Really? Imagine that. It took them all those years to realize that money was being appropriated? So much for citizens who keep track of stuff like this....Okie Land, your complacency shines through once again....
paul, yukon - Dec 2, 2008 at 7:14 am
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