Published: April 09, 2008 10:10 am      

Feds try to link Stipe

Prosecutors called 13 witnesses to testify in the trial of Francis Stipe on Tuesday, including Steve Phipps, of Kiowa — who tried to link Stipe to an alleged conspiracy to locate a dog food plant on his brother’s property.

Stipe’s defense responded with a blistering attack on Phipps’ credibility as the trial ended its second day at the Eastern District of Oklahoma U.S. Courthouse in Muskogee.

A federal grand jury indicted Francis Stipe in October on charges of conspiracy, mail fraud, witness tampering and illegal monetary transactions.

Phipps has already pleaded guilty to a charge of mail fraud in connection with a federal grand jury investigation into political corruption and related criminal activity in Oklahoma.

Witnesses expected to testify today include former District 17 state Rep. Mike Mass, D-Harsthorne, some of his family members, and Charlene Spears, the former longtime assistant to Stipe’s brother, former state Sen.,Gene Stipe.

Phipps, testifying on Tuesday afternoon, told Assistant U.S. Attorney Gay Guthrie that Gene Stipe had told him they would be able to get $100,000 for a dog food plant in McAlester from the McAlester Foundation because Francis Stipe was on the board.

Phipps testified earlier that he had not wanted Gene Stipe involved in the dog food plant, but he indicated that Gene Stipe — who was his business partner at the time — had cut himself in on the deal.

During cross examination, Francis Stipe’s defense attorney John Carwile launched his attack on Phipps’ credibility.

Asked by Carwile if he had lied to the FBI before he had been granted immunity from prosecution, Phipps maintained he had not lied — he said he just wasn’t forthcoming.

Phipps also testified about his partnership with Gene Stipe in a holding company called Phipps Enterprises, which mainly concerned title and abstract companies, and another entity Phipps operated called the Rural Development Foundation — which funneled money to another of his companies called Indian Nation Entertainment, which handles gaming machines.

Another witness, Roy Hatridge, identified himself as one of the owners of the National Pet Products. Hatridge said he had found other sites that were better properties for the dog food plant — but National Pet Products ended up obtaining the former Gene Stipe property from the McAlester Foundation.

Hatridge, who is testifying under immunity, said he had to work on making the property more presentable before some of the McAlester Foundation members came to view it.

Hatridge also testified that he was at Gene Stipe’s office when a closing was made on the property on Oct. 22, 2002 — the same day he said former District 17 state Rep. Mike Mass, D-Hartshorne, got a $48,000 check.

Prosecutors are alleging the check was a kickback to Mass for helping funnel state funds into the project.

Another witness testifying under immunity was Pat Payne of the Pushmataha County Abstract Co. — owned by Gene Stipe and Steve Phipps at the time through their Phipps Enterprises, Inc. holding company.

“I was there for a closing for the McAlester Foundation and Gene Stipe,” Payne said, referring to the 2002 closing sale of the land where the dog food plant would be located.

Payne said that Gene Stipe asked her to give Mass part of the money from the sale.

“I said ‘No,’” Payne said.

“In my opinion, he was asking me to give Mike Mass a kickback.”

Other witnesses Tuesday included Dick Dudley, chairman of the McAlester Foundation, who testified that Francis Stipe, as a board member, had voted on the foundation’s decision to purchase his brother’s land for the dog food plant and had been among the board members signing the check for the purchase.

On cross examination, Dudley said there was nothing in the foundation’s rules which would have prohibited Francis Stipe from voting to buy the land.

The Bank N.A. President Greg Brown, who was also a member of the McAlester Foundation, testified that he had abstained when the foundation voted to buy the property from Gene Stipe where National Pet Products would be located. Brown said he abstained because the bank had a mortgage on the property.

Also on Tuesday, Gene Stipe’s accountant Gregory Shores said he kept records that showed Gene Stipe had paid former congressional candidate Walt Roberts $125,000 from 2000 through 2002. That’s after Roberts lost the 1998 congressional race and had moved to California, according to previous testimony.

In other testimony, a McAlester man testified that Francis Stipe once wrote him a check for $10,000 to bid on an art auction. The auction had been held in McAlester in 1998 to raise money for Walt Roberts’ Third District Congressional campaign — and has been referred to as a “sham” auction by federal prosecutors.

Terry “Sonny” Nix testified that he didn’t know anything about art and had never attended an art auction prior to the event. He said that Francis Stipe asked him if he wanted to go to the auction because he didn’t want people to bid against him.

Nix said Francis Stipe told him to spend $10,000 at the auction. However, Nix said he later ended up spending $10,250 for a sculpture of an Indian dancer.

He said Francis Stipe later wrote him another check for $250 to cover the entire cost of the sculpture.

The trial is expect to last the rest of the week, with the possibility of extending into next week as well.

Contact James Beaty at jbeaty@mcalesternews.com.