Oklahoma Republican Party Chairman Gary Jones has filed a lawsuit against convicted former Auditor and Inspector Jeff McMahan and others alleging they used fraudulent campaign finance practices to cheat Jones out of being elected state auditor and inspector.
Jones' lawsuit, filed Monday in Logan County, alleges that McMahan and his wife, Lori, former state Auditor and Inspector Clifton Scott, former state Sen. Gene Stipe and businessman Steve Phipps conspired to violate state campaign finance laws to give Jeff McMahan "an illegal, unfair and unethical election advantage" in elections in 2002 and 2006.
The allegations mirror those by federal prosecutors during a public corruption trial in Muskogee last year in which McMahan, a Democrat, was accused of showing favoritism in his official actions as state auditor to Phipps in exchange for cash, jewelry, campaign contributions, fishing trips, and travel to places such as New Orleans and Boston.
Prosecutors alleged McMahan accepted the items in exchange for favorable treatment of Phipps' abstract companies, which were once regulated by the auditor and inspector's office.
Phipps, a key prosecution witness at McMahan's trial, admitted that he and two business partners, including Stipe, funneled $157,882 into McMahan's 2002 campaign. The legal limit is $5,000 per person.
McMahan was convicted on felony counts of conspiracy and accepting bribes on June 14, 2008, and resigned two days later, forestalling an impeachment effort in the state House. He was sentenced in January to eight years and one month in federal prison.
Lori McMahan was sentenced to six years and six months on related charges.
Jones' lawsuit alleges the defendants committed fraud, interfered with his opportunity to be elected auditor and inspector, violated federal racketeering statutes and caused emotional anguish.
"Politics is unfair enough without people violating the law," said Jones, a certified public accountant who estimated he spent $250,000 campaigning for the statewide position. "It's a tough game."
Jones' lawsuit alleges McMahan continued a practice in the auditor and inspector's office that had begun under Scott, who it says "aided and abetted" the defendants by denying permits and licenses to potential competitors during the years he served as auditor and inspector between 1982 and 2002.
Scott said he had not seen the lawsuit.
"This is the first I've heard about it," Scott said from his home in Shawnee. "Don't know anything about it."
Phipps, who pleaded guilty in 2007 to a federal conspiracy charge, was sentenced to one year and one day in prison. It was not immediately clear whether Phipps and the McMahans had legal representation in the lawsuit.
Stipe, 83, was forced out of the Legislature in 2003 after he admitted funneling $245,000 into the failed congressional campaign of Walt Roberts. Stipe, of McAlester, was fined $700,000 and placed on probation.
Last year, a federal judge dismissed a petition to revoke Stipe's probation after a series of mental health evaluations found that he was mentally incompetent to assist in his defense.
An attorney for Stipe, John Carwile of Tulsa, did not immediately return a telephone call to his office seeking comment on the lawsuit.