The race for state auditor has turned ugly.
With the election a little over a week away, incumbent state Auditor Steve Burrage has been blanketing television airwaves with political ads accusing Republican challenger Gary Jones of "repeated failure to pay taxes."
"State tax warrants and penalties for thousands in unpaid state taxes," the narrator declares in the ads.
Jones bristles at the claims.
"It's a misrepresentation of the facts," he said. "The allegation that I haven't paid my taxes is totally false. Every tax has been paid."
The catch is Jones' business, OTT Business Systems Inc., paid some taxes late about two decades ago.
A Burrage campaign official said the basis for the ad's claims are two federal business tax liens totaling more than $17,000 for tax years 1988 and 1992 and three state tax warrants and liens totaling more than $15,000 for business taxes that were not paid on time in 1990 and 1991.
Jones acknowledges some taxes were paid late, but said he resolved the matter years ago by paying all taxes that were due.
"Basically, we had some people who made some clerical errors and we got behind," Jones said.
He said the biggest federal tax lien stemmed from an employee paying the IRS using the wrong business identification number after his company changed from a partnership to a corporation.
Clearing up debt
Jones said it took two years, 18 telephone calls and intervention by a U.S. senator to get the matter straightened out and the money credited to the right account. In the meantime, a federal tax lien was filed, he said.
"There were a couple other errors that we made," he said. "Granted we should pay our taxes on time, but we were late ... and we corrected those. That was back in the early '90s."
"I've figured up that since my wife and I have been married, we've paid personally and in business probably about $1 million in taxes," said Jones, a former state Republican Party chairman.
Jones said he also wanted to respond to statements in the Burrage ad that Jones was "tossed out of office after making criminal charges against innocent hospital trustees," and had sued a campaign opponent for "mental anguish" after losing elections for state auditor.
Jones said he still believes the allegations he made against Comanche County Memorial Hospital trustees were correct, and it was his duty as a then-Comanche County commissioner to expose wrongdoing when he found it.
"I was not thrown out of office," Jones said. "I was narrowly defeated in my bid to be re-elected."
The lawsuit Jones filed was against former state Auditor Jeff McMahan and a number of his associates, including former state Sen. Gene Stipe.
McMahan twice defeated Jones in races for state auditor — in 2002 and again in 2006. However, McMahan subsequently was convicted of accepting bribes and conspiracy to deprive Oklahomans of their right to honest public service after a trial in which a co-conspirator testified he funneled more than $100,000 into McMahan's 2002 campaign.
Gov. Brad Henry appointed Burrage, an Antlers banker, as state auditor and inspector in 2008 to fill McMahan's unexpired term.
Jones filed a lawsuit against McMahan and his alleged accomplices in November, accusing them of conspiring to steal the elections. The lawsuit is pending in Logan County District Court.
Jones said the lawsuit alleges fraud and racketeering. The "mental anguish" allegation in the lawsuit is just standard language that attorneys commonly include in civil lawsuits, he said.
Burrage campaign officials issued this statement when asked if they wanted to respond to Jones' comments about their ad: "We stand behind every statement in our campaign's ads. Each point is based in fact, can be backed up with solid evidence and research and would not be included in an ad if it couldn't be."
Liening on his opponent's record
What the ad says: Gary Jones wants to be state auditor? Maybe we should audit him. IRS tax liens against Jones' business for repeated failure to pay. State warrants and penalties for thousands in unpaid state taxes. Tossed out of office after making criminal charges against innocent hospital trustees. And when he lost an election, Jones actually sued his opponent for the mental anguish of losing. There must be a job somewhere for Gary Jones, but it's sure not state auditor. What the ad shows: The ad was paid for by The Committee to Elect Steve Burrage for Auditor 2010. The video shows pictures of opponent Gary Jones, IRS tax liens and news stories about Jones. Overlaying the images is a series of phrases, including, â€œAudit Gary Jones,â€ â€œIRS Tax Liens,â€ â€œRepeated Failure to Pay Taxes,â€ â€œState Warrants and Penalties,â€ and â€œThousands in Unpaid State Taxes.â€ Analysis: The tax allegations in the ad are based on state and federal business tax liens filed nearly two decades ago. Jones said all taxes that were owed were paid long ago. Documents provided to The Oklahoman by the Burrage campaign to support the ad's claims included federal tax liens and state tax warrants filed against Jones' company, OTT Business Services Inc. The federal tax liens were for tax years that ended in December 1988 and 1992, and the state tax warrants were for taxes owed for time periods in 1990 and 1991. Jones blamed late payments on clerical errors, including an employee paying taxes under the wrong business identification number after his company changed from a partnership to a corporation. He said it took 18 phone calls, two years and intervention by a U.S. senator to get the IRS to eventually shift the payment from one account to another. In the meantime, a federal tax lien was issued, he said. Jones, a former Comanche County commissioner, contends accusations he made about Comanche County Memorial Hospital trustees behaving improperly were correct. Jones denies being â€œtossed out of office.â€ â€œI was not thrown out of office. I was narrowly defeated in my bid to be re-elected,â€ he said. Jones twice ran unsuccessfully for state auditor against Jeff McMahan, in 2002 and again in 2006. He subsequently sued McMahan and several of his associates for racketeering and fraud after McMahan was convicted of corruption for accepting bribes and illegal campaign contributions. â€œMental anguishâ€ was one of the grounds for seeking damages cited in the lawsuit. Burrage campaign officials said they stand by the ad. â€œWe stand behind every statement in our campaign's ads. Each point is based in fact, can be backed up with solid evidence and research and would not be included in an ad if it couldn't be,â€ campaign officials said in a prepared statement. Randy Ellis, Staff Writer