Businessman claims illegal contributions to governor

Staff and Wire Reports

MUSKOGEE, Okla.  -- A businessman has testified that he provided $70,000 in illegal campaign contributions to Gov. Brad Henry in January 2003.

The testimony from southeast Oklahoma businessman Steve Phipps came Wednesday in the federal corruption trial of State Auditor and Inspector Jeff McMahan and his wife, Lori.

The couple face nine felony counts related to their relationship with Phipps, an abstract company owner whose businesses were regulated by the auditor's office.

Phipps is cooperating with prosecutors as part of a plea agreement.

The governor's office released a statement saying:

"Today's allegations were originally raised in March of 2007 and addressed by the governor at that time. Gov. Henry's campaigns have complied with all state laws and ethics rules and operated under the highest of ethical standards. Everyone who donated to the governor's campaigns was required to sign a sworn statement attesting that their contribution was their own and in compliance with state law. Because of those sworn statements, there was no reason to believe anything improper had occurred."

The governor became aware of the problems in March 2007 after federal authorities indicated that possible straw donors had contributed to Congressman Dan Boren's campaign and other campaigns in Oklahoma.

"To err on the side of caution and address even the appearance of any conflict, Gov. Henry immediately donated the funds associated with the so-called straw donors to charity: The Oklahoma National Guard Relief Fund and the USS Oklahoma Memorial at Pearl Harbor," the statement read.

The Jeff McMahan trial is expected to continue into next week.