Is this just the tip? OU Foundation may face possible ethics probe for unreported gifts

From Today OU Daily 

OU Foundation may face possible ethics 

probe for unreported gifts

Nicholas Harrison/The Daily

Wednesday, January 19, 2011

The OU Foundation may be under investigation by the Oklahoma State Ethics Commission for failing to report gifts to university officers and employees.

The Daily submitted a complaint to the commission Dec. 13 stemming from the OU Foundation’s denial of an open records request first reported Dec. 7.

Although the foundation invoked a statute that allows them to keep donor information confidential, the state attorney general’s office had issued an opinion in 2002 that indicated it must still comply with all applicable state ethics laws.

In his 2002 opinion, Attorney General Drew Edmondson wrote, “The authority of a public body to keep donors’ identities confidential is tempered by the rules of the commission.”

Edmondson noted state officials and employees are required to be independent and impartial and to exercise their powers and prerogatives without prejudice or favoritism.

Anyone who does business with a state entity is required to report any gift to a state officer or employee with a cost of more than $50, according to state statutes.

 

On its official website, the foundation’s audit report indicates it has several contracts with the university and provided $21,644,682 in salary supplements in 2010 and $28,824,589 in 2009. However, when The Daily contacted the commission, no reports were filed by the foundation.

At its regular meeting Dec. 21, the commission acted on two complaints, voting unanimously “there was a reasonable basis to believe that a violation of constitutional ethics rules had occurred.”

Immediately after the meeting, Marilyn Hughes, executive director for the commission, confirmed an investigation had been opened on the OU Foundation. 

 However, when contacted by The Daily on Tuesday, Hughes said she could neither confirm nor deny the investigation.

All information regarding ongoing investigations is kept confidential in accordance with state law. After a complaint is submitted it is presented to the commission by the executive director during a closed executive session, said Rebecca Adams, general counsel to the commission.

If the commission determines rules have been violated, there is no guarantee the findings will be available to the public.

At its discretion, the commission may resolve a possible rules violation by issuing a private reprimand which remains confidential. They may also issue a public reprimand, reach a settlement or bring a lawsuit to court, Adams said.

A the time this story was written, OU Foundation President Guy Patton and OU Press Secretary Chris Shilling said they had not been contacted by the commission. They were not aware the foundation was the subject of an investigation and could provide no comments.

Ethics agency will remain independent

Ethics agency will remain independent

By Michael McNutt
Capitol Bureau

Wording in legislation will be deleted that would have taken away the independence of the state's Ethics Commission, the bill's author said Friday.

"The Ethics Commission will be taken out of the bill as soon as I can physically get it out,” said Rep. Ken Miller, an Edmond Republican.

The House of Representatives late Wednesday passed House Joint Resolution 1099, which aims to give the governor authority to appoint the directors of such agencies as the Department of Human Services and the Wildlife and Conservation Commission.

A section also states the governor or his Cabinet secretary would be able to appoint a director of the Ethics Commission. The director's duties would be defined by the Legislature.

Why the change?
In 1990, Oklahoma voters passed a constitutional amendment creating a constitutional Ethics Commission to handle campaign finance reports as well as ethical conduct of state officers and employees. It is to be an independent commission, with the commissioners now in charge of hiring its executive director.

Approval of the measure would put the Ethics Commission under the supervision of the state's executive and legislative branches. Legislators now appropriate money for the commission, but the commission is to be an independent body so it can objectively look into complaints and make rules.

If approved by the Senate, HJR 1099 would be submitted to voters in November.

Gov. Brad Henry has not reviewed the legislation, spokesman Paul Sund said Friday.

"In general, Governor Henry is very protective of the Ethics Commission and opposes any effort to weaken its authority or autonomy,” Sund said.

"This is alarming,” Commissioner John Raley said of the joint resolution.

If the measure would become law as originally written, it would take away the "total and absolute independence of this body,” he said.

Commission Chairman Don Bingham said the proposal is a "direct threat to the day-to-day function of this commission.”

Where did idea originate?
Miller said the idea for the measure came from the "100 Ideas” initiative led by former House Speaker Lance Cargill, R-Harrah. Idea No. 51 proposes changing the constitution to establish a Cabinet system of government in which the governor appoints the heads of the major departments.

Miller said House staff wrote the legislation, and the measure sailed through a House committee without a negative vote. Rep Mike Reynolds, R-Oklahoma City, pointed out the problem with language involving the Ethics Commission when the bill was discussed on the House floor Wednesday night.

Miller said he told Reynolds he would delete the reference to the Ethics Commission.

It was Reynolds who brought the measure to the commission's attention during its monthly meeting Friday at the state Capitol.

"You need to be very vigilant,” Reynolds said to the commission members.

State workers fired over late income tax filings

State workers fired over
late income tax filings
Fri February 8, 2008

OKLAHOMA CITY - Failing to file state income taxes has caused political headaches for some lawmakers, but for many state employees, the consequence has been especially dire: They've been fired.

A 2003 law directs agency heads to fire state workers who do not resolve their income tax problems. The law requires the Oklahoma Tax Commission to notify agencies that have employees who have not filed their state returns.

"We don't keep track of terminations, but there have been numerous people fired due to this law," said Paula Ross, an Oklahoma Tax Commission spokeswoman.

Ross said she was aware of the firings because agency officials have called the Tax Commission to report the employee terminations.

Oklahomans who face an April 15 tax-filing deadline should be aware that failure to file is a criminal offense under state law, a misdemeanor punishable by up to a year in jail and a $5,000 fine.

Offenders rarely have been prosecuted, however.

"I know people have been prosecuted, but the cases have been handled by the district attorneys and I don't have numbers on that," Ross said.

In recent years, she said the Tax Commission has exclusively used a civil procedure to compel reluctant taxpayers to resolve their tax problems.

The Associated Press asked the Tax Commission to outline its procedures after four state House members got letters for failing to file their returns.

One of them is Rep. Lance Cargill, R-Harrah, who stepped down as House speaker soon after published reports said he did not file income tax returns for 2005 and 2006.

Cargill, who voted for the law to require the firing of state workers who did not file their returns, also was late paying property taxes on his law firm for six years.

He and the other lawmakers have apologized for the tax-filing lapses and say they have taken care of the problem.

Ross said people who fail to file income tax returns and do not respond to collection efforts could still be charged with a crime as "a last resort."

She said over the last couple of years, the Tax Commission has changed its focus from criminal prosecution to sending out "Notice to File Return" letters to taxpayers and seeking district court orders directing taxpayers to comply.

"In cases where the defendant fails to produce the returns after being ordered to do so, the OTC pursues citations of contempt for failure to comply with the court order. This procedure has resulted in the filing of returns in all but a few instances," Ross said.

"Our main goal is to have compliance with the tax laws and to make it fair and equitable for those who properly file. This measure has worked better and is more cost effective for the Tax Commission and the taxpayer."

She said the "vast majority of people file their taxes on time."

How many state employees have been fired over tax problems is not known.

Ross said her agency does not keep tabs on that; neither does the Office of Personnel Management.

Patti Omerod, the human resources program manager at the Oklahoma Merit Protection Commission, said no employees have filed appeals of their dismissals because of the tax issue in the two years she has been on the job.

For Cargill, disclosure of his tax problems was the latest in a series of episodes that led to discord in the Republican House caucus.

The former speaker has been the subject of an ethics inquiry into his fundraising activities. One of the issues was how checks made out to the state Republican Party wound up in an Oklahoma County fund.

Soon after taking office early in 2007, Cargill drew criticism after he summoned lobbyists to one-on-one meetings at a political consultant's office to seek contributions to Republican political action committees and for the speaker's "100 Ideas Initiative."

Questions have been raised about other issues, including the expenditure of more than $1.6 million during the past two years for furniture and related equipment for House members.

The Norman Transcript Editorial: No one is above the law

The Muskogee Phoenix Editorial: Wise move to resign

Speaker’s tax woes continue

Speaker Paid Property Taxs late again

Muskogee Phoenix Editorial: Speaker’s leadership in question

Oklahoma House Speaker Not Fill Income Tax Returns for Two Years !

Gifts to lawmakers exceed $200,000

Gifts to lawmakers exceed $200,000
By Michael McNutt
Capitol Bureau

Lobbyists spent more than $200,000, mostly on meals, gifts and tickets for legislators in 2007, a 28 percent increase over the previous year, state Ethics Commission records show.

Most of the money, or about 66 percent, was spent during the first half of last year when legislators were in session and before a new law took effect that limited the amount companies that hire lobbyists can spend.

A big chunk of the money during the last six months of 2007 was spent on season football tickets at the state's two largest universities, commission records also show.

A law that took effect July 1 states lobbyists can spend only $300 a year on an elected state official or legislator from each client they represent and limits companies that hire lobbyists to spending $300 a year on an elected state official or legislator, regardless of the number of lobbyists they have. Ethics concerning lobbying will again be an issue this legislative session, which starts today.

More than half the money spent in 2007 on legislators went to Republicans.

Republicans control the House of Representatives, 54 members to 47 members. More than $92,000 was spent in 2007 on House Republicans compared with more than $38,000 spent on House Democrats, according to lobbyist reports filed with the state Ethics Commission.

Republicans and Democrats are evenly split in the Senate. More than $33,000 in gifts was given by lobbyists to Senate Republicans compared with more than $27,000 given to Senate Democrats, according to lobbyist reports filed with the state Ethics Commission.

New rules proposed

The Ethics Commission has proposed a rule that would drastically cut the maximum amount of money lobbyists could spend on each legislator.
The proposal would reduce from $300 to $100 the amount spent on elected officials during a calendar year by companies or associations that hire lobbyists. Those companies also provide the money to buy meals and other gifts for legislators.

The proposal also would require lobbyists to disclose gifts after spending more than $10 on a state official or aide during each six-month period. Lobbyists now are required to report gifts costing $50 or more.

Both proposals will take effect July 1 if legislators take no action on them by the time the session ends in late May. The House and Senate both have to pass a resolution to kill the proposals; the governor can veto the resolution.

How much was spent?

The money spent by lobbyists on legislators in 2007 is an increase of more than $40,000 over 2006, when lobbyists spent $161,552, records show. Lobbyists gave legislators $175,780 in gifts in 2005 and $125,000 in gifts in 2004, records show.

Rose State College professor John Wood submitted a report to the Ethics Commission that said companies employing lobbyists have an advantage over most Oklahomans, mainly because the average Oklahoman cannot afford to hire a lobbyist.

The typical annual income from lobbying in Oklahoma is $86,525, Wood said. Nearly 40 percent of Oklahoma lobbyists make more than $100,000.

Term limits in the state Legislature have increased lobbyists' relative power to legislators who are overall less experienced and have less institutional memory compared with legislators who have been in office longer, Wood said.

How funds are spent

Most of the money spent on legislators in 2007 was for meals, ranging from $6 breakfasts to $210-a-plate dinners.
Lobbyists also bought gifts and tickets, such as to concerts or to sporting events.

Season tickets to Oklahoma State University and University of Oklahoma football games made up 24 percent of the $207,784 spent on legislators last year.

OU gave 92 legislators season football tickets at a cost of $27,600, records show.

Legislators have the option to receive one OU discounted season football ticket, said Catherine Bishop, vice president of public affairs at the university.

The season ticket costs $379, with OU paying $300 and each legislator paying $79, Bishop said. The most OU or any group that hires lobbyists legally can spend on each legislator each calendar year is $300.

Legislators also have the option of buying up to one additional season football ticket at the public rate, which for 2007 was $370, Bishop said.

"Their visits give us the chance to make them aware of our academic and research programs, which are of great benefit to our state,” OU President David Boren said. "These tickets are paid for through athletic department funds, which come from ticket revenues.

"We do not use appropriated funds or funds designated for academic programs,” Boren said. "We remain one of the very few universities in the nation where the athletic department makes subsidies to academic budgets each year instead of the academic budget subsidizing athletics, which is true for most universities.”

About $1 million comes from the athletic department each year to support OU's library, Boren said.

OSU gave 80 legislators season tickets valued at $288 each for a total of $23,040.

"Football games are a great opportunity to have Oklahoma leaders visit our campus and get an update on what OSU is doing to fulfill its land-grant mission of teaching, research and outreach,” said Gary Shutt, OSU's director of communications.

Each legislator has the option to receive one season ticket at no cost because it is under the $300 limit and the option to buy as many season tickets as they want, Shutt said.

Next year, however, a season ticket will cost more than $300 because OSU is playing an extra game, he said. Legislators receiving a free season ticket would pay the amount over $300, he said.

The $50,640 in OU and OSU season football tickets to legislators made up about 72 percent of the $70,414 in gifts given to legislators by lobbyists from July 1 through Dec. 31, records show.

Who got the most gifts?

Rep. Dennis Adkins, R-Tulsa, received the most in gifts during the last six months, according to available Ethics Commission reports. He received $1,733.

Five others received more than $1,000 in gifts during that time period: Reps. Mike Thompson, R-Oklahoma City, received $1,175 and Tad Jones, R-Claremore, received $1,070; Sens. Bill Brown, R-Broken Arrow, received $1,040, Owen Laughlin, R-Woodward, received $1,032 and Mike Mazzei, R-Tulsa, received $1,028 in the last six months of 2007.

Fourteen of the state's 101 representatives and two of the state's 48 senators received no gifts during the last six months of 2007, reports show.

During the last six months of 2007, Republicans received 61 percent of the money given to House members. House Republicans received $26,761 in gifts from lobbyists while House Democrats received $17,295, reports show.

In the Senate, Republicans received 58 percent of the gifts given, with GOP members getting $15,369 and Democrats receiving $10,991, reports show.

The exact amount given to legislators is unknown. Lobbyists only have to disclose gifts after spending more than $50 on a state official or aide during each six-month period.

Some miss report deadlines

About 100 of the state's 389 registered lobbyists had failed to file spending activity reports by the Jan. 22 deadline, according to the Ethics Commission. Fifty-six had failed to file reports through Jan. 31.
The $207,784 figure was obtained by checking paper spending activity reports filed by lobbyists through Jan. 31 with the Ethics Commission. About a dozen lobbyists filed online, a new option this year.

However, those reports were difficult to track because a new format for the commission's Web site showing lobbyist gifts is still being developed. One option showing lobbyists' expenditures for the year doesn't list specifically how the money was spent and another reporting option does not list the expenditures by lobbyists.

The state's Web site provider is designing the reporting site. Marilyn Hughes, executive director of the Ethics Commission, said she hopes the information can be displayed correctly in the next month or so.

Wood, the Rose State College professor, said Oklahoma compares poorly with other states in terms of lobbyist disclosure.

In 2003, Oklahoma ranked as the 42nd best state and in 2006 lobbyists themselves felt "there are as many shady deals and underhanded tactics in Oklahoma as there ever were,” according to a study, Wood said.

However, the Ethics Commission "has gained great strides” in putting lobbyist expenditures, names and employers online since 2005, he said.

"Interest groups are strong in the state, but face some limitations with the strength of the governor and Legislature,” Wood said. "However the business and oil interest groups in the state are very powerful coupled with a weak two-party system and term limits.”

Headless Oklahoma House to convene

Headless House to convene

By MICK HINTON World Capitol Bureau
2/3/2008

The former speaker and a member who wanted to replace him both bowed out with tax problems

OKLAHOMA CITY -- In a history-making session, the body of the House of Representatives will convene Monday without a head.

"It's the craziest thing I ever heard in my life," said Larry Ferguson, a former lawmaker who served for 20 legislative sessions, including eight as the leader of Republicans who were in the House minority.

By Monday's end, however, a new speaker will emerge as the fractured House strives to convince the Senate, the governor and the public that it is ready to do business.

After two top leaders bowed out last week because of embarrassing tax problems, the public is watching, said University of Oklahoma political science professor Keith Gaddie. Residents are alarmed that their leaders have not been paying taxes on time, like they have to, he said.

Speaker Lance Cargill, R-Harrah, resigned Monday; speaker pro tem Gus Blackwell, R-Goodwell, exited the race for speaker three days later. Both acknowledged they had been repeatedly late in paying taxes.

Cargill's resignation occurs at a time when the State Ethics Commission apparently is investigating campaign practices among Republicans under Cargill's leadership in the past two election cycles.

"This better be wake-up time" for whoever ends up leading the House, Ferguson said. "The people out there are tired of reading about this kind of stuff and hearing it on TV."

This follows numerous recent stories about Democrats, including former longtime Sen. Gene Stipe and his excessive campaign donation problems.

Now, Auditor and Inspector Jeff McMahan, a Democrat, has been indicted on multiple counts over campaign irregularities. Former Democratic insurance commissioner Carroll Fisher is in prison after being convicted of embezzling from his campaign funds and of lying on a campaign report.

"Then they hear about the speaker and the wanna-be speaker," Ferguson said.

Four House Republicans have filed to lead the lower chamber for the session. They include Rep. Chris Benge, R-Tulsa, who is the old leadership's choice. He is viewed as a more moderate Republican who can work with both the GOP and Democrats, which he has done as head of the powerful House Budget and Appropriations Committee.

Cargill had the unquestioning allegiance of the freshman lawmakers whom he helped get elected, and they are expected to rally behind Benge when the GOP caucus meets in closed session Monday morning. The next speaker will be elected in open session Monday afternoon, following Gov. Brad Henry's State of the State address.

Benge has said he will keep the current GOP committee chairmen in place so the House can quickly get about its business. It has only three months to deal with a dwindling surplus in the state's $7 billion budget.











Another speaker candidate is Rep. Susan Winchester, R-Chickasha, who was denied a leadership role under Cargill but has supporters among some of the more experienced members.







Candidate Rep. Dale DeWitt, R-Braman, leads the rural caucus of Democrats and Republicans who meet during session to discuss mutual interests.







Another candidate, Rep. John Wright, R-Broken Arrow, leads the Republican Caucus. Last fall, he ran unsuccessfully against Cargill for the position of speaker designate.

All four of these candidates have solid records of paying their taxes on time, county records checks by the Tulsa World show.

This controversy over taxes probably would not have occurred 20 years ago, before tax records were computerized, Ferguson said.

"I've never known a person resigning because of tax problems and an interim leader withdrawing because of the same thing," he said. "This has all left the people confused."

The longtime Republican said several GOP seats are being held by freshmen whose constituents are mostly Democratic, so the party needs to recognize that these seats could be vulnerable.

Ferguson does not expect Democrats to take over of the House, but he is afraid Republicans could lose ground in the fall elections.

The House leadership should look to the Senate, where Republicans and Democrats are evenly split, he said. Surprisingly, "the two parties made progress last session in a bipartisan fashion and both sides got things they wanted," he said.

Ferguson said he has been tempted to talk with University of Oklahoma President David Boren and ask him to call together former seasoned state leaders from both parties. Recently, Boren summoned numerous old Senate colleagues from across the country who gathered at OU. They urged the presidential candidates to quit listening to their entrenched bases and strive for common ground, reaching across party lines.

"Both Republicans and Democrats need to come to the Capitol with the idea of working with the people and being good servants instead of worrying about running for some other office and see how much money they can accumulate," Ferguson said.

"It's gotten pretty much out of control."