Kathy Taylor / Gene Stipe Questions

By David Arnett, Publisher    
Sunday, 02 April 2006
Tulsa Today has discovered that Tulsa mayoral candidate Kathy Taylor, in her first year as Oklahoma Secretary of Commerce, used taxpayer money to fund a questionable foundation with close ties to former Democrat state senator and convicted felon Gene Stipe in a purely speculative venture in direct competition with the City of Tulsa.

Using tax money for political purposes is the core of corruption and this case hurts the City of Tulsa directly.

Our search was sparked by candidate Taylor’s heavy advertising which touts her abilities as a business manager. So how good is she? Tulsa Today began our inquiry with a search of the public records of the Department of Commerce and specifically how they spend public money. One specific line item with little detail in the 2004 Commerce Department Appropriations Bill implemented under Taylor’s authority includes $350,000 to the Rural Development Foundation.

Rural Development Foundation is relatively new (est. 2002) and yet in 2003 gained permission from the Oklahoma Water Resources Board to siphon 25 billion gallons of water from Lake Eufaula each year.

According to an Oklahoma House of Representatives press release dated September 9, 2003, the Rural Development Foundation was “pondering” development of a system that would convey water to communities in Lincoln, Pottawatomie, Okfuskee, Creek, McIntosh, Okmulgee and Seminole counties. Does Oklahoma give money to just anyone for pondering? Could you make a career of pondering?

“We would either deliver raw water to their own treatment plants or reservoirs, or sell them filtered water, or maybe it would be a combination of the two,” said Steve Phipps of Kiowa in the press release. He described himself as a consultant to the tax-exempt foundation, which is based in Antlers.

The system envisioned by the foundation probably would include a water filtration plant constructed near a water intake valve that would be installed near the junction of U.S. 69 and Interstate 40, in McIntosh County, Phipps related. “That would enable us to provide potable water from McAlester to Glenpool and from Sallisaw to Seminole,” he said. Phipps admitted in the press release that the plan had not advanced beyond the conceptual stage.

The City of Tulsa serves water to the City of Glenpool in part with a 36-inch main line extending past 141st Street South. Thus, Taylor’s Commerce Department allocation to Rural Economic Development Foundation funds “potential” competition with and potential reduction of revenue to the City of Tulsa.

The address of Rural Development Foundation office is recorded as 111 Main Street, Antlers Oklahoma. Steve Phipps also owns an abstract business in Antlers, the Pushmataha County Abstract Co., at that same address.  According to an Oklahoman story Phipps’ business partner is Gene Stipe, 79, a former state legislator currently on probation after pleading guilty to one misdemeanor and two felony counts in a federal campaign corruption case. Stipe admitted he fraudulently put more than $245,000 of his own money into Walt Roberts’ failed 1998 congressional campaign and orchestrated a cover-up after coming under investigation. Several members of the Rual Development Foundation's Board are also employees of Phipps/Stipe abstract companies including Pat Payne and Jeanette Lambert.

As Commerce Secretary, Kathy Taylor was responsible for managing the entire Department appropriation, including the $350,000 to this foundation. The question most taxpayers should be interested in is how someone could set up a foundation, quickly secure a water rights agreement and then get that much money from the Commerce Dept with no track record of accomplishments on a purely speculative deal?

Checking further, Tulsa Today discovered that Rural Development Foundation also received $350,000 from the Oklahoma Department of Agriculture, Food, and Forestry in 2004.  Further, an agreement between the Department of Agriculture and the Department of Commerce transfers that $350,000 to the Commerce Department effective June 30, 2005. That agreement is signed by Kathryn L. Taylor and dated September 9, 2004. Thus, Rural Development Foundation apparently gathered a total of $700,000.00 in Oklahoma taxpayer funds.

Then-Commerce Secretary and now Tulsa mayoral candidate Kathy Taylor was providing public money to Rural Development Foundation. Taylor knew or should have known of the political and business relationships between Rural Development and admitted felon Gene Stipe. Did Taylor know the Foundation planned to compete with the City of Tulsa in the sale of water to the City of Glenpool? If Taylor did not know, then how good a manager was she as Secretary of Commerce for the State of Oklahoma? The intent was published. How good could she be as mayor of the City of Tulsa if her administrative authority is used to reduce Tulsa revenues by encouraging a competing water provider within Tulsa’s metropolitan area?

From the public record of her work experience, Kathy Taylor is a lawyer with limited business experience as a corporate counsel. Further business experience could be claimed from Vanguard Car Rental USA Inc., but such appointment would have been made by her husband, William Lobeck – or maybe by her, as it remains unclear how much ownership she maintains in the company.

Her appointment to the transition team and later as Secretary of Commerce for Governor Brad Henry followed significant campaign donations to his election effort.

Tulsa Today made several requests for comment on this story and others from Tulsa mayoral candidate Kathryn L. Taylor – and we continue to await a response.

State media can continue to build on this story as we all search for the money, but the story is first published on Tulsa Today, a local news service.

Last Updated ( Friday, 07 April 2006 )