Business partner files counterclaim against Gene Stipe

Saturday, August 27th 2005, 12:00 pm

By: News On 6

McALESTER, Okla. (AP) _ A former business partner has filed a lawsuit alleging former state Sen. Gene Stipe broke federal law by running title insurance companies despite having two felony campaign fraud convictions.

In a counterclaim to a lawsuit filed earlier by Stipe, Steve Phipps alleges Stipe should have known that anyone convicted of a felony crime involving dishonesty cannot own or operate an insurance business because he had been an attorney for more than 50 years. Upon conviction, the crime would be punishable by up to five years in prison.

Court documents don't identify the abstracting and title insurance companies the men own.

The state Insurance Department sent Stipe a letter Aug. 10 to notify him the agency had learned of his ownership in the title insurance company and instructing him to fill out an application if he wanted to participate in the insurance business in Oklahoma.

The department's general counsel, Michael Ridgeway, reminded Stipe of the prohibition of certain felons operating an insurance business and told Stipe to contact the agency ``if you believe these statutes do not apply to your situation.''

Stipe hadn't responded as of Friday, Ridgeway said.

Stipe, who served 53 years in the Oklahoma Legislature and was the state's longest serving lawmaker when he resigned in 2003, sued Phipps last month in Pittsburg County District Court and sought to dissolve their partnership.

Stipe, who sought repayment of a $750,000 loan plus damages, claimed he and Phipps formed two corporations _ Phipps Enterprises and Corporate Financing _ with Stipe's money and Phipps failed to perform as promised.

Stipe's attorney, John Carwile of Tulsa, said he hadn't seen the countersuit and had no comment.

After resigning from the Legislature, Stipe pleaded guilty to federal conspiracy and perjury charges in a scheme to illegally funnel money to a Walt Roberts' failed 1998 congressional campaign. He was ordered to pay a $735,567 fine, perform 1,000 hours of community service and serve six months in home detention and five years of probation.