FBI Pays Visit To State Auditor

Friday, August 24th 2007, 9:01 am

By: News On 6

OKLAHOMA CITY (AP) -- Two FBI agents visited the office of state Auditor and Inspector Jeff McMahan as part of a political corruption investigation, according to a published report. The agents spent about 90 minutes in the auditor's office before leaving at 10:30 a.m. Thursday, The Oklahoman reported in a copyright story.

McMahan's spokeswoman, Terri Watkins, declined to answer whether a search warrant was delivered either to the office or McMahan's home. She said no records were seized from the office. The FBI does not confirm or deny active investigations.

McMahan has been mentioned in the investigation because of his relationship with Steve Phipps, a Pittsburg County businessman.

Phipps and several associates and employees contributed heavily to McMahan's first campaign for the auditor's job in 2002.

The auditor confirmed in March that he had taken three trips with Phipps:

-- A guided striper bass fishing excursion at Lake Texoma in 2002 with Phipps and then-state Auditor Clifton Scott. Phipps paid for the one-day trip.

-- A trip to New Orleans, possibly in the spring of 2003, involving Phipps and McMahan and their wives. Watkins said each couple paid their own expenses.

-- A bus trip by McMahan and his wife with Phipps and some of his employees to a casino hotel in Biloxi, Miss., in 2002 or 2003. Phipps' attorney said that trip actually occurred in 2004. McMahan said the trip was to provide a private educational course for Phipps and his employees in several abstract offices. Phipps paid the McMahans' meal and lodging expenses.

The auditor's office regulates the abstract industry.

State Ethics Commission rules prohibit McMahan from receiving anything of value from people he regulates.

Phipps pleaded guilty in June to a conspiracy charge alleging he paid kickbacks to three former legislators for their help in earmarking state taxpayer money to his businesses.