McAlester Mayor Don Lewis has resigned from the board of the McAlester Foundation, a private group devoted to economic development in the city.
“I’ve been concerned for a long time that there could be a perceived conflict of interest in serving both as the mayor and on the Foundation,” Lewis said Saturday. “I decided some time ago I was going to resign.
“I was going to bring it up at the last Foundation meeting, but we didn’t have a quorum. Then I was going to bring it up at the next meeting, but decided to go ahead and send (current Foundation president) Evans (McBride) a letter, telling him I was resigning.
“My concern is that it could be a conflict of interest.”
McBride, who took over as the Foundation’s president in January, confirmed the mayor’s statements.
“The mayor has expressed concern about a conflict of interest for some time before my taking over as president,” he said.
“He mentioned that serving as mayor and serving on the Foundation is a conflict of interest.
“He’s been talking for some time about the fact that the mayor’s position should not even be on the board.”
By position, Foundation bylaws establish its membership as consisting of the mayor of McAlester, representatives of First National Bank, The Bank NA and BancFirst, a representative of the McAlester Chamber of Commerce and four members at large.
Members at large are nominated by a committee of board members and elected to the board.
Up until a few years ago, the McAlester Economic Development Service and the Mid-South Industrial Authority also had representatives on the Foundation board, according to longtime board member Dick Dudley. Dudley said that changed when Mid-South extended beyond Pittsburg County and MEDS had some internal conflicts, although he said he couldn’t remember exactly what years those occurred.
Lewis’ resignation comes in the midst of a broad-ranging federal investigation that involves the Foundation, as well several other economic development entities. The investigation has allegedly uncovered a tangled web of straw donors to political campaigns, kickbacks to lawmakers and a variety of other illegal activities.
In 2002 the Foundation was instrumental in helping McAlester-based National Pet Products get started. Over the next few years, former state Reps. Mike Mass, Randall Erwin and Jerry Hefner are alleged to have funneled state money through an organization called the Rural Development Foundation to NPP and another company called Indian Nation Entertainment.
Both companies are owned by Kiowa businessman Steve Phipps, although an FBI affidavit alleges former state Sen. Gene Stipe is a silent partner in the companies.
The three former representatives are all alleged to have been on the payroll for at least one of Phipps’ companies and Mass is alleged to have directly received kickbacks for his part in getting the state money through to the RDF.
At the time the Foundation and the city of McAlester agreed to help fund NPP, to the tune of $250,000 from the city and an additional $100,000 from the Foundation, McAlester businessman Francis Stipe was on both MEDS and the Foundation board. Francis Stipe is the brother of the former senator who, along with his wife, Agnes, and former congressional candidate Walt Roberts, had purchased the old White Electric building in March 1997 for $75,000, according to records at the Pittsburg County Clerk’s office. The purchase price was also the assessed value at the time.
In 2002, Gene Stipe sold the property to the Foundation for $190,000.
In addition to the money from the Foundation and the city, NPP also had more than $400,000 from the Kiamichi Economic Development District of Oklahoma to use as startup funds.
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