Questionable Campaign Contributions

Monday, March 12th 2007, 7:02 pm

By: News On 6

OKLAHOMA CITY (AP) -- Democratic Auditor and Inspector Jeff McMahan said Monday he is checking into questionable contributions to his campaign, while dismissing as politics a call for his resignation.

"We are going to continue to operate in the best interest of the taxpayers like we always have," McMahan told reporters who asked about Republican state party chairman Tom Daxon's demand that he give up his state position.

He said a Daxon news release asking for his resignation for allegedly receiving donations from so-called straw donors was predictable since the party official is running for a full term as state GOP chairman and is in "the fight of his life."

Daxon is opposed by former party chief Gary Jones, McMahan's opponent in 2002 and 2006, and Jerry Buchanan, a Tulsa County GOP official.

According to published reports, former state Sen. Gene Stipe of McAlester was accused in an affidavit of illegally pumping money into U.S. Rep. Dan Boren's 2004 primary campaign. Boren allegedly received more than $34,000 from 21 straw donors in a scheme involving Stipe and business partner Steve Phipps.

Boren said he had no knowledge of receiving any improper Stipe money in March 2004, two months after a federal judge sentenced Stipe to house arrest and fined him $735,567 for a similar scheme linked to Walt Roberts unsuccessful 1998 congressional campaign.

A straw donor is a person who uses someone else's money to make a political contribution. Straw donations are used to disguise the real source of the contribution or to get around campaign spending limits.

Records show McMahan got nearly $36,000 from 15 of those listed by the FBI as straw donors to Boren, according to The Oklahoman. Democratic Gov. Brad Henry got $35,000 from nine of those donors.

In a statement Monday evening, Henry said he was not aware of any campaign problems tied to recent news accounts, "but even the perception that a problem might exist is unacceptable to me.

"For that reason, I am donating $35,000 in campaign funds to two good causes: The USS Oklahoma Memorial at Pearl Harbor, which will honor fallen and surviving soldiers who served on the ship; and the Oklahoma National Guard Relief Fund, which provides assistance to guard members who serve our country and their families."

One donor, Rita Benson, acknowledged to The Oklahoman giving a straw donation to McMahan. McMahan got a $3,200 contribution from Benson in 2002.

The auditor said he did not know the woman and did not knowingly accept any illegal contributions.

McMahan said he had kept campaign donation cards from his 2002 campaign and they are being checked to see if donors signed a pledge that the money came from them.

Tim Arbaugh, who heads the abstract division for McMahan, was named by the FBI as a $2,000 straw donor to Boren in 2004. Arbaugh gave $787 to McMahan in 2002.

McMahan said Arbaugh had denied doing anything improper. He said further discussions would be held with the employee, who is on sick leave.