Money trail: Special projects process needs change
Oklahoman Editorial
June 29, 2007
NOW two men have acknowledged taking part in a shady business deal that involved taxpayer funds. Businessman Steve Phipps pleaded guilty Wednesday to mail fraud and admitted giving kickbacks to three state legislators. One of them, former Rep. Mike Mass, pleaded guilty to a similar charge a few months ago.
This case should stand as an example of why real changes are needed in the way so-called special projects money is disbursed by the Legislature.
As it stands now, the process by which this money multiple millions of dollars is divided remains shrouded in secrecy. Appropriations bills list only the amounts that will be given to 11 "councils of government" scattered across the state. These quasi-governmental entities then are given a secret list that shows how much money each legislator can earmark for particular projects of interest to them or their district.
Phipps said in court that he agreed with Mass and others on a scheme to have state money directed to a nonprofit called the Rural Development Foundation, which then channeled funds to two businesses that were largely owned by him. For their help, Phipps said, Mass and two other legislators whom he did not identify were given a piece of the profits from one of the businesses.
How Mass and other former lawmakers used their special project funding is the subject of an investigation by the FBI, which alleges the Rural Development Foundation was simply a front for businesses owned by Phipps and former state Sen. Gene Stipe.
Phipps' attorney took the notion of a vigorous defense to absurd heights in pointing out that although the funds were ill-gotten, they were used to create jobs in eastern Oklahoma. "This is not a case where taxpayer money ended up in some offshore bank account," he said. Guess we should be thankful for that.
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