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Papers cite more in illegal election funds

By Tony Thornton and Michael McNutt Modified: January 26, 2008 at 1:10 am •  Published: January 26, 2008
; a
nd Union-Creek Abstract Co., which has a certificate of authority in Creek County.

Sund said Dittmann underwent and passed an Oklahoma State Bureau of Investigation background check before his appointment.

“The governor's staff went a step further, asking each appointee if they had any involvement or relationship with Steve Phipps or Gene Stipe. Mr. Dittmann told our staff that his only involvement was the purchase of abstracts from Phipps-owned companies,” Sund said.

“Given that response, the recommendations on his behalf and the fact that Mr. Dittmann passed an OSBI background check, we were very surprised by today's allegation,” Sund said. “Certainly, we had no knowledge of the allegation at the time of the appointment.”

Records show Dittmann gave just $1,000 — all to McMahan — for the 2002 elections. He gave McMahan an additional $1,200 in 2003.

In 2006, he spread donations among four Democratic statewide office candidates: the legal maximum of $5,000 to both McMahan and Henry, $3,500 to Lt. Gov. Jari Askins and $2,000 to Insurance Commissioner Kim Holland, records show.

In addition to Dittmann, the affidavit also accuses abstract company owner Larry Witt of organizing illegal contributions for McMahan.

Until a few months ago, Witt was partners with Phipps and former state Sen. Gene Stipe in abstract and title insurance offices in Stillwater, Oklahoma City and Pawnee. The current ownership is now in litigation.

Witt's lawyer has insisted his client did no wrong, but was simply partners with the wrong people.

Conversations taped
The affidavit provides partial transcripts of conversations between Phipps, Arbaugh and Lori McMahan concerning alleged cash payments totaling $27,000 from Phipps. In return, according to the indictment, the auditor gave special treatment to Phipps' companies.

The alleged payments took place in 2002. The conversations took place in February 2007.

Concerning Phipps' alleged payments totaling $17,000 for campaign signs, the affidavit quotes Lori McMahan as saying, “I can go down for that if you, you know, if you have to tell about it, it'll be me that goes down with it. I took it and I did it.”

According to the affidavit, she instructed Phipps that if the FBI asks whose cash paid for the signs, “It wasn't yours.”

Trips, jewelry at issue
Three of the felony counts involved trips the auditor took at Phipps' expense.

According to the affidavit, McMahan had Arbaugh contact Phipps and request $3,500 to cover expenses for both McMahans to attend the 2004 Democratic National Convention in Boston.

Another trip involves $3,287 in expenses allegedly paid for by Phipps for a New Orleans trip, including a $1,640 ring Phipps bought for Lori McMahan. McMahan told the FBI he left $1,200 on Phipps' coffee table to reimburse him, the document states.

The affidavit quotes an informant as saying Phipps bought the sapphire, ruby and topaz ring after seeing Lori McMahan admire it.

Contributing: Staff Writer Jay F. Marks

© Copyright 2008, The Oklahoman

Indictment: McMahan Statement from Jeff McMahan's attorney McMahan statement of Jan. 25, 2008

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