Posted on 06/28/2007 12:20:13 PM PDT by Osage Orange
Wed June 27, 2007
Attorney: Ex-Stipe business partner pleads guilty
MUSKOGEE (AP) - Steven Phipps, a former longtime business partner of ex-state Sen. Gene Stipe, pleaded guilty Wednesday to a mail fraud charge and admitted paying kickbacks to three state legislators.
Phipps, 52, admitted paying the lawmakers, who have since left office, for their help in funneling taxpayer money to private businesses. He has been cooperating with federal prosecutors. The charge carries a maximum penalty of five years in prison.
Phipps, who was released on $20,000 bond by U.S. Magistrate Kimberly West, became the second person to plead guilty to a felony charge linked to alleged kickbacks to legislators.
Former Rep. Mike Mass pleaded guilty to a similar charge in April and also is cooperating with federal authorities.
"I agreed with Mike Mass and others on a plan to have state funds appropriated by the legislature and steered to an entity known as the Rural Development Foundation," Phipps said.
"The RDF then provided funds to National Pet Products and Indian Nation Entertainment, businesses then largely owned and operated by me.
"In order to secure state funding for RDF, that would then be provided to INE, I agreed to periodically pay Rep. Mike Mass and two other influential state legislators each a percentage of the gross income from the gaming machines that were manufactured as the result of the state funding."
He did not reveal the names of the other two legislators who got the kickbacks.
His attorney, Dan Webber, said the state money did go to economic development.
"This is not a case where taxpayer money ended up in some offshore bank account," he said. "Though obtained improperly, the state funds for National Pet Products and Indian Nation Entertainment were put to use by those companies and did help create manufacturing jobs in eastern Oklahoma."
Phipps' plea came one day before Stipe, 80, was set to appear before a judge at a probation revocation hearing. Webber said the two men were partners in business enterprises, including abstract companies, for more than 20 years.
FBI court documents allege Phipps and Stipe used state money for private business ventures to give money to political campaigns through so-called straw donors as a way of getting around campaign contribution limits.
Stipe is on probation for a straw donor scheme involving the 1998 congressional campaign of Walt Roberts. The FBI alleges Stipe continued that practice after pleading guilty in Roberts' case.
An affidavit used to obtain a search warrant for Stipe's office alleges he and Phipps contributed $34,600 to U.S. Rep. Dan Boren's 2004 congressional campaign through straw donors. The legal limit is $5,000. The FBI said there is no evidence that Boren, D-Okla., knew about the irregular donations. The congressman has given the money to charity.
Mass is accused of directing taxpayer funds to the Rural Development Foundation controlled by Phipps and to a quasi-private entity called the McAlester Foundation, which then gave money to Phipps to build a dog food plant.
Two other former legislators - Randall Erwin and Jerry Hefner - have been implicated in the federal investigation in FBI affidavits, but have not been charged.
Hefner, a Wagoner County commissioner, has not responded to reporters' requests for comment. Erwin, executive director of the Little Dixie Community Action Agency in Hugo, has acknowledged getting about $7,800 in consulting fees from Phipps' gambling machine company, Indian Nation Entertainment, but he said the money was for legitimate work.
Funny thing is....this is just the tip of the iceberg.
Gene Stipe has been a DIRTY politician for nearly his entire political career....and most knew it too.
Now he's trying to avoid jail by playing to the public sympathies.....for his "illnesses".
No telling how deep his corruption goes.....some say Gov. Henry owes his election to Stipes...Same with the younger Boren...
Lot's of questions.....that won't be answered...I'm sure.
Ha!
He’s not kin to Michael Stipe is he?
I don’t know......
Ah, you’re being too generous. I read it a few times and they never ONCE stated Stipe is a Democrat. Yes, he gave $34,000 to a Democrat who has since donated it to charity, but they never actually mentioned that Stipe is a Democrat.
Can’t admit that the Ds are 10 times more corrupt than the Rs...
Even egg-toothed Okie's should know what party Stipe is with....but I'd bet you a Ben Franklin...I could ask 10 common Okies....who he was, and what he was..and they couldn't answer those questions.
Sigh......
The guy has sucked so much money off the citizens of the state...and they have no clue.
It's depressing....
People in SE Ok love Stipe, he made sure they got their welfare without any problems, the sorry SOB belongs in prison and has for a long time, I don’t care how sick or old he is, he needs to go
Can’t disagree...FRiend.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.