Editor: Kevin Calvey State House Tax Committee Chairman but running for U.S. Congress in 2006, received $21,900 in donations from an Altus group that was heavily involved in a tax credit (fraud) program that Calvey was involved.

Calvey, R-Del City, as chairman of the House Revenue and Taxation Committee, has been a key player in shaping legislation that officials hope will prevent abuse of the program through investors buying tax credits for a big tax write-off without necessarily creating jobs to benefit the state.

A bill now on the House calendar proposes a moratorium on selling further tax credits until lawmakers can fix a loophole that leaders say threatens to drain the state treasury.

Sen. Ted Fisher, D-Sapulpa, introduced the bill and is the prime mover behind closing the loophole.

The program allows for 30 percent tax credits for small businesses in rural areas and 20 percent tax credits for small businesses in urban areas.

Through a loophole in the program, however, officials say borrowed money is being used in complicated transactions to allow investors to make instant profits of 100 percent to 500 percent.

Officials say the two programs cost the state an average of $2 million during their first three years, but that zoomed to an estimated $66 million for the 2005 calendar year. They say they do not know how many tax credits are now in the pipeline and what the eventual cost to the state will be.

Quartz Mountain Aerospace Inc. of Altus has been held up as a good project that is being helped through the rural tax credit program. Officials say it should create 300 jobs by the end of 2007.

Paul Doughty, president of Altus Venture LLC, said investors in that project are getting a 2-to-1 return on their money and he wants the program to continue so Quartz Mountain, which plans to make flight training planes, can continue on track.

Doughty and his wife, Jane, are listed as each giving $6,300 each to Calvey's campaign - $2,100 each for the primary, runoff and general election.

F. Don Anderson, vice presidents of Altus Venture, is donating $6,300, and Larry McLaughlin, an associate with the First State Bank of Altus, is donating $1,500.

Although Altus is located in the 3rd District, comprised mostly of western Oklahoma, Doughty said it is not unusual for him and his associates to give to "pro-business" conservative candidates in other areas of the state.

He said he had contributed to US Sen. Jim Inhofe, US Rep. Tom Cole and former US Rep. J.C. Watts, among others.

"We think Calvey is a good man," Doughty said. "He is extremely knowledgeable. He is a lawyer and very conservative and very pro-business."

Most of the donations from the Altus group came in March ahead of a meeting during which a Senate bill to fix the loophole in the tax incentive programs was sent to the House floor.

Doughty said the donations to Calvey had no connection to that action.

Calvey said he has met Doughty and was aware he and some of his associates had donated to his campaign.

He said he was appreciative of that support but the contributions would not affect how he deals with the tax incentive program.

"What I've told everybody since I've been elected (to the House) is that if they want to contribute to my campaign, that's great," Calvey said. "I operate ethically at all times."

He said "there will definitely be a bill" that will fix "any loopholes without killing the program."