McMahan convicted of conspiracy, taking bribes

Saturday, June 14th 2008, 3:38 pm
By: News 9

Staff and Wire Reports

MUSKOGEE, Okla. -- A jury convicted state Auditor and Inspector Jeff McMahan and his wife Saturday on felony counts of conspiracy and accepting bribes.

Federal jurors deliberated about 13 hours over the course of two days before convicting McMahan and his wife, Lori, on one count of conspiracy and two counts of accepting bribes apiece. Jurors acquitted each of them on five counts of mail fraud.

"The conspiracy is the primary charge," U.S. Attorney Sheldon J. Sperling said in a statement. "The defendants conspired to commit dishonest public service mail fraud. They also conspired to commit racketeering in the form of illicit interstate travel."

The McMahans will remain free on bond pending a pre-sentencing investigation. U.S. District Judge James H. Payne will determine a sentence for the couple.

The McMahans originally faced nine felony counts relating to their dealings with southeast Oklahoma businessman Steve Phipps, but Payne dismissed one of the counts at the end of the 10-day trial and before the case went to the jury.

"The evidence we presented was the product of what the defendants did. The witnesses were the defendants' trusted associates and friends -- until the investigation became known," Sperling said. "The defendants tried to keep their actions under the radar. They took thousands of dollars in illegal campaign contributions, gifts, jewelry, and trips. They concocted cover stories.

"Public corruption is simply a disgrace."

Sperling said the McMahans took "cash, other items of value, supplies and straw contributions which far exceeded the legal limits of allowed contributions" during his successful campaign for state Auditor and Inspector.

It wasn't immediately clear what the future held for McMahan, who is in his second term as state auditor.

Jeff McMahan's attorney, Rand C. Eddy, told reporters he was "extremely disappointed" by the verdicts. He said it's unclear whether his client will resign.

Deputy State Auditor Michelle Day has been serving in McMahan's role since he stepped aside on the day of his arraignment in January. The Oklahoma House started an investigation into McMahan, the first step toward impeachment proceedings, during the legislative session that ended last month.

Rep. David Braddock, D-Altus, co-chairman of the special investigative committee, said by  the committee had an observer in the courtroom monitoring the trial and he anticipated meeting with committee members and the group's general counsel to consider their next move.

"We'll have to see, maybe have some discussions about what Mr. McMahan is thinking about doing. Is he contemplating resigning, since he's been found guilty, or is he contemplating appealing it? I have no idea."

Gov. Brad Henry issued a statement Saturday calling for McMahan's resignation.

"Auditor McMahan has had his day in court and a jury of his peers has spoken," the statement read. "In light of the guilty verdict, I believe he should resign his office immediately so the State of Oklahoma can move forward under the leadership of a new state auditor and inspector.  It is critical to restore public trust in that position.

"As governor, it will be my duty to appoint a successor.  I will begin that process as quickly as possible." 

Any elected official who is convicted of a felony is automatically suspended without pay, according to the state's constitution. If the conviction is overturned on appeal, the suspended official will be reinstated and paid all withheld wages.

If McMahan refuses to resign, lawmakers said a committee will begin the process of an impeachment trial.

The McMahans declined to comment.

Lori McMahan's attorney, Kevin Krahl, said his next step is to "just go figure out the sentencing possibilities ... evaluate our options and go from there."