Published: May 30, 2009 12:39 pm      

Federal prosecutor says cases have eased corruption

U.S. Attorney for the Eastern District of Oklahoma Sheldon Sperling hopes a corner has been turned with the sentencing of two men who were key players in a kickback scheme involving public money.

Sperling spoke in the wake of the sentencing of former Dist. 17 state Rep. Mike Mass, D- Higgins, and Kiowa businessman Steve Phipps.

“In this day and age, we don’t have the time to be distracted by public corruption. And in this time of financial duress, we don’t have the luxury of public monetary depravity,” Sperling said.

“Here, in this tiny corner of the Department of Justice universe, I’m – no, we, are honored to have helped turn an important corner.”

That corner includes changes in state law which Sperling believes will make it more difficult for state economic development funds to be plundered.

“Several unlawful ways of doing business are no more,” Sperling said. “No longer may so-called economic development money be sent to pad the pockets of friends.”

“Oversight of abstract companies is no longer a feature of the amount of money one contributes to a state auditor.

‘Important statutory reforms have been passed by Oklahoma’s legislators and signed into law by our governor.”

Mass and Phipps were convicted in a scheme in which Phipps paid kickbacks to Mass and others for funneling money appropriated by the state legislature to companies largely held by Phipps through an entity known as the Rural Development Foundation.

Those businesses included the McAlester dog food plant known as American Pet Products and Indian Nation Entertainment, a gaming machine business.

“The defendant Mass and others directed nearly $2.8 million in state money to certain businesses in Pittsburg County, for which the conspirators received kickbacks totaling some $279,258, which represents the restitution ordered in this case ordered to be repaid by both Mass and Phipps,” Sperling said.

Mass and Phipps were sentenced last Wednesday by U.S. District Judge Ronald White at the Eastern District of Oklahoma U.S. Courthouse in Muskogee.

They had both pleaded guilty in 2007 to separate counts of conspiracy to commit mail fraud to deprive another of the intangible right of honest services — the “another” in both cases being the people of Oklahoma. They also agreed to cooperate with investigators and prosecutors as part of a probe into political corruption in the state.

“I’m sure the defendants would have wished to receive more leniency,” Sperling said,

“Some would have wished a harsher penalty.”

“This is in the middle of those two circumstances.”

Both men had faced the possibility of up to five years in prison and a fine of up to $250,000.

White sentenced Mass to 24 months in prison,

The judge sentenced Phipps to 12 months and one day.

In addition to the $279,258 in restitution both men have been ordered to pay, they must also maintain 24 months of supervised probation upon their release from prison.

Also, Judge White assessed Phipps a $50,000 fine.

Sperling said the sentences in this case are consistent with those handed down in similar federal cases.

As an assistant U.S. attorney, Sperling prosecuted one of the last county commission fraud cases, a 1986 case in Carter County.

“In the county commission fraud prosecutions in the 1980s, most of the defendant commissioners got two-year prison terms,” Sperling said. Those who rendered significant assistance to prosecutors and investigators typically got less, he said.

“Phipps’ cooperation was very substantial,” Sperling said.

Sperling’s district covers 26 counties in Eastern Oklahoma, including Pittsburg County. He believes the cases resulting from the Department of Justice investigation, which included the FBI and federal prosecutors, will be beneficial not only to Southeastern Oklahoma, but the state as a whole.

FBI agents James Dawson and Gary Graff did much of the work on the investigations. Sperling’s courtroom prosecution team largely consisted of Assistant U.S. Attorneys Gay Guthrie and Ryan Roberts.

Sperling’s future career is uncertain. He will likely have to leave the office in the wake of President Barack Obama’s election.

He’s among three contenders nominated for a state district judgeship which covers Wagoner and Cherokee counties, and also includes Adair, Muskogee and Sequoyah counties.

Oklahoma Gov. Brad Henry is currently considering the three nominees and will make his choice later.

Sperling has also been touted as a possible candidate for the Oklahoma attorney general’s office, but he’s made no commitments.

Whatever happens, Sperling thinks there’s been a change for the better in regard to political corruption in Oklahoma — and it’s reflected in the guilty pleas and sentences handed down in the Mass and Phipps’ cases.

“These sentences highlight remarkable investigative tenacity and prosecutorial resolve,” Sperling said.

“Many skilled prosecutors, committed investigators, and brave citizens of this state joined in battle against a past we should relegate to the dustbin of history.”

Contact James Beaty at jbeaty@mcalesternews.com.