ONEOK chief challenges Anthony

Wednesday, October 13th 1999, 12:00 am
By: News On 6

OKLAHOMA CITY (AP) -- The Oklahoma Corporation Commission voted
Wednesday to release technical details of a controversial 1993 gas
purchase contract after the head of Oklahoma Natural Gas' parent
company denounced a torrent of myths about his company.

Appearing before the commission, Larry Brummett, chairman and
chief operating officer of ONEOK, Inc., said rumors, false
allegations and innuendo about the contract may jeopardize a $1.8
billion merger between ONEOK and Las Vegas-based Southwest Gas.

Over the years, Brummett said, "an amazing body of mythology
about the Dynamic Energy Resources contract has evolved. These
stories have grown so outrageous and so ugly and so utterly
untruthful that they must be challenged.

"For the sake of the decent men and women who work for our
company, for those who believe in the future and invest in us, and
for the sake of the business climate in the state we're proud to
call home, the myth must die."

Brummett referred to a 3-year-old letter to Corporation
Commission Chairman Bob Anthony during which he urged Anthony to
publicly disavow telling Business Week magazine that ONG and two
other Oklahoma-based utility companies had engaged in "illegal
conduct that might have harmed ratepayers."

"Mr. chairman, you never answered that letter. And what has
happened since then? The trickle of malicious accusation has turned
into a torrent. It has gone beyond simple lies into the realm of
bizarre conspiracy. A gas contract that was in the ratepayers'
interest is now portrayed as a political payoff, or part of a

The ONEOK official said for some reason a commission staff
report finding the Dynamic contract was proper had been deleted
from material sent unsolicited to members of the new media around
the country.

"And why does this campaign to create the illusion of
wrongdoing continue? We don't believe it's coincidental. ONEOK is
poised to become this country's largest independent natural gas
distributor. The shareholders of Southwestern Gas, based in Las
Vegas, Nevada, have accepted our merger offer. That state's
regulators have approved the transaction. We await regulatory
approval in the states of California and Arizona.

"But Mr. chairman, it's no secret that this merger -- a $1.8
billion transaction -- may be jeopardized by the continuing campaign
to distort the Dynamic contract. This is particularly frustrating
in light of repeated studies by the staff of this commission
concluding that there was no impropriety on the part of ONG."

He said hearings before the Arizona Corporation Commission have
been delayed so regulators can "consider baseless allegations in a
lawsuit brought by an unsuccessful bidder for Southwest. And the
delay is also for the purpose of sifting through the claims about

Brummett said ONG had been in Oklahoma since 1906, through the
good and bad times, now serving 1.4 million utility customers in
Oklahoma and Kansas.

"But commissioners, we can't continue to grow if this campaign
of deceit continues to succeed," he said. "We can't guarantee
that this will always be an Oklahoma company that provides jobs and
millions of dollars for the economy of this state. This is not
intended in any way as a threat: it is simply the harsh reality."

After the meeting, Brummett said that perhaps the company has
been remiss in not making its case more forcefully in the past, but
he said challenging a sitting commissioner, in this case the
chairman, "is not something we relish."

The Open Records dispute had put the ONG case back in the
forefront, with Anthony pushing for release of the documents.

He contends the contract cost ratepayers $170 million in
pass-through charges on their monthly bills, based on an analysis
by the former head of the Corporation Commission's utility

But the commission staff report referred to by Brummett found
nothing unusual about the contract.

Anthony said to this day, however, the commission itself has not
ruled on the Dynamic contract and the issue of whether it cost
taxpayers money.

He said his Business Week quote referred to activities of Bill
Anderson, an attorney for ONG, who wound up going to jail for
bribing a former commissioner in a Southwestern Bell Telephone Co.

Also, Anthony asked Brummet how his company could have had
dealings with "corrupt political operatives from Hawaii and

He referred to Gene and Nora Lum, who pleaded guilty to a felony
charge that they arranged to pass $50,000 through "straw donors"
to congressional candidates in 1994. Nora Lum was chief executive
offer of Dynamic. Gene Lum was a director.

Officials contend excessive profits from the Dynamic contract
was the source of the political donations.

Brummett said ONG cannot control the activities of people they
are involved with in gas purchasing. ONG officials previously
denied any knowledge of the Lums' political activity.