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Home / US / Scott Pruitt before E.P.A .: Fancy Homes, a Shell Company and friends with money

Scott Pruitt before E.P.A .: Fancy Homes, a Shell Company and friends with money



According to data from real estate owners, the purchase of the house in 2003 cost $ 375,000 at a steep price reduction of about $ 100,000 of what Mrs. Lindsey had paid a year earlier – a shortfall paid by her employer, telecoms giants SBC Oklahoma, was caught.

SBC, formerly known as Southwestern Bell and later as AT & T, had lobbyists on a number of matters in the early 2000s, including a deregulation bill that would allow prices and a separate regulatory effort to recur a case to open claims that it had bribed local officials a decade earlier. Mr. Pruitt sided with the company on both issues, as the government records show

In 2005, the Shell Company ̵

1; Capitol House L.L.C. – sold the property for $ 95,000 more than she had paid. While shell companies are legal, they often obscure the people who have an interest in them, and none of Mr. Pruit's disclosure of financial disclosure in Oklahoma mentioned the company or its proceeds – a possible violation of state ethics.

The Oklahoma City Business, which was not previously reported, was one of several instances in which Mr. Pruitt had benefited from his relations with Mr. Kelly and Mr. Wagner during state policy.

During his eight years as a Republican As state senator, Mr. Pruitt has also upgraded his family home in the suburb of Tulsa from a small ranch house to a lakeshore estate in a gated community. In addition, he acquired a significant stake in a minor league baseball team and took a second job at the law firm of Mr. Wagner. Mr. Kelly's bank, SpiritBank, would be there for a large part of it – the funding of Mr. Pruitt's Tulsa home and his share of the baseball team, as well as the house mortgage in Oklahoma City.

Mr. Pruit's interactions with SBC also show that his blurred lines with lobbyists have roots in his years in Oklahoma. One of the problems with the E.P.A. This has put Mr. Pruitt in trouble with government guards by renting a room in Washington for $ 50 a night from the wife of an energy lobbyist who had done business outside the agency.

Lobbyists and others in Oklahoma's politics who encountered Mr. Pruitt reminded him as a tough competitor, who always kept an eye on a higher office. Some called him a "boy scout" who was stingy with his money, while others privately said that he had a sense of entitlement – these rules were not for him.

David Walters, a former Oklahoma governor and Democrat, described Mr. Pruitt as someone who overruled the needs of voters, especially in his years as Attorney General.

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"For these selfish politicians, it would be pretty cool to have this house near the capital," said Marsha Lindsey, the lobbyist who previously owned the house. Credit
Brandon Thibodeaux for the New York Times

"I was disappointed that he was hyper-partisan and seemed to represent the interests of companies to Oklahoma citizens," Walters said.

The New York Times Questions About Mr. Pruitts Finances in Oklahoma, an EPA The spokeswoman said Mr. Pruitt 's business relationship with Mr Kelly and Mr. Wagner are "ethical" and his involvement in the shell company "is a simple real estate investment".

"Mr. Wagner and Kelly have dropped prominent positions in law and banking in Oklahoma to serve in the administration," the spokeswoman said in an email. "They are dedicated to EPA employees who have earned the respect and admiration of EPA, career workers across the country, who serve the country professionally and transparently – and are committed to ensuring that the programs they work on are successful." 19659016] Rubbing Shoulders in Oklahoma City

The house on Northeast 17th Street in the historic Lincoln Terrace neighborhood was built here in 1928 and has a grand staircase and a vaulted door. "Mrs. Lindsey said one of the attractions of the house is that she Pruitt stayed in the house for parts of 2004 and 2005, said neighbors, and the residence took him within walking distance of his job – lawmakers only worked part of the year, mostly from February to May – and in near SBC Bricktown Ballpark, where his baseball team, the RedHawks, was now known as the Dodgers. 19659019] Continue reading the main story e

Jim Dunlap, then Republican leader in the State Senate, said he had rented a room from Mr. Pruitt over the garage. He had the impression that Mr. Pruitt had bought the house as an investment by a group of lawyers, he said.

"This was a place where you slept and had dinner," Mr. Dunlap said. "It was all overboard."

Oklahoma Campaign Disclosures filed by Mr. Pruitt at this time do not mention the house purchase or lease with Mr. Dunlap. The records of the real estate show that the transfer of the property of Mrs. Lindsey, the lobbyist, was rather complicated and involved several steps – none of them with a public reference to Mr. Pruitt, although the E.P.A. Spokeswoman confirmed that he was one of five co-owners of the shell company.

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The Shell Company was designed by Kenneth Wagner, an E.P.A. Advisor and law student of Mr. Pruitt. Credit
Maryland's Department of Natural Resources

When asked whether such disclosure is required, the executive director of the Oklahoma Ethics Commission, Ashley Kemp, referred The Times to an Ethics Handbook for 2005. The rules stipulated "any business or organization." to disclose any entity in which an official held securities worth $ 5,000 or more. Securities were defined as "documents representing a stake in a company".

E.P.A. The speaker did not respond to questions about Mr. Pruitt's disclosure notices in Oklahoma.

In November 2003, Ms. Lindsey signed the homeowner's title deed to a moving company that had shut down SBC for her move and severance pay. She got back nearly $ 475,000, the amount she paid for the house in 2002, as her contract demanded, she said.

The following day, the removal company signed the estate to Jon Jiles, a health manager who has a number of business interests and contributed to Mr Pruitt's political campaigns. Records show that no mortgage was involved, and Mr. Jiles paid $ 375,000 in cash.

In December, Mr. Wagner officially registered the Shell company Capitol House with the Oklahoma authorities, and Mr. Jiles transferred the document to the newly formed company. Mr. Jiles was listed as manager of the Capitol House and Mr. Wagner as a registered agent.

The following month, SpiritBank, where Mr. Kelly was general manager, approved a $ 420,000 mortgage on behalf of Capital House L.L.C., another spelling of the entity.

Ms. Lindsey, the former lobbyist, said she had focused on her upcoming move to Dallas and postponed the sale and other arrangements to the company's relocation agent. She said that she did not know about the involvement of the Shell Company and did not remember the final sale price. "The bottom line is – it's unusual to take a $ 100,000 loss to the house," after she was only on the market for a few weeks, she said.

When asked about the price reduction, AT & T said in a statement that two independent companies rated the house and its average value was $ 390,000. The valuation and sale were handled by the relocation business, the company added.

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The State Capitol in Oklahoma City. Lobbyists and others in state politics reminded Mr. Pruitt as a tough competitor who always had a higher office in mind. Credit
Brett Deering for the New York Times

Mr. Jiles said in an email exchange that he was involved because Mr. Wagner described the house as "a good deal" and comfortable accommodation. He said he has no other business interactions with Mr. Pruitt.

"A cash transaction was most likely used because sellers often sell less if it's a bardeal and not a finance contract," Mr. Jiles said. "And I was probably the one who was best able to make a bardeal."

In a statement, the CEO and President of SpiritBank, Rick Harper, said that the bank was forbidden by law to comment on certain loans, adding, "SpiritBank is confident that these loans will be in compliance with applicable laws and regulations Regulations have been made. "

The deal came at a time when SBC was a major state and lobbyist in Oklahoma City.

As president of SBC Oklahoma and a registered lobbyist, Ms. Lindsey, said she was entertaining lawmakers in her home. In addition, SBC was known to play lawmakers with gifts, including tickets for Mr. Pruitt and other Oklahoma State University in the Men's Basketball Final Four in 2004, the Oklahoman reported at that time.

"It gives us a chance to try to build a relationship with a lawmaker or an official," said a spokesman, Andy Morgan, of the newspaper. "Such events provide a much more relaxed atmosphere." He added, "We are one of the largest employers in the country and it is important that lawmakers be informed of problems that affect our business."

The prospect of another investigation into a long-standing bribery case had particularly shaken SBC. In the early 1990s, an SBC lobbyist had been found guilty in federal court of paying bribes to a WCC envoy to vote for a company that could retain federal tax savings rather than pay it out to its taxpayers , But the vote itself was never overturned, and in 2003, another commissioner suggested resuming the investigation, claiming that SBC still owed billions of dollars in reimbursements. The Commissioner dropped his plans for a law-enforcement investigation, and then Attorney General Drew Edmondson stood back against the effort.

Later, when Mr. Pruitt became Attorney General, he helped stop another attempt at SBC bribery. In a March 2011 letter, Mr Pruitt's office warned that any commissioner reopening the investigation could be prosecuted for misusing public funds.

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Mr. Pruitt with Albert Kelly, a top adviser at E.P.A. Mr. Kelly, previously Chief Executive of SpiritBank, has recently been excluded from work in the financial industry. Credit
M. Scott Mahaskey / Politico

A Lucky Run

Around the same time that Mr. Pruitt invested in the Oklahoma City house, he had completed a large business involving Mr. Kelly, Mr. Wagner, and a campaign campaigner who had one Great HR Company Conducted

A baseball player at school, Mr. Pruitt bought about a 25 percent stake in the RedHawks of Oklahoma City and became the executive partner of the team, which made him a highly visible spokesperson for the local team. Mr. Wagner also acquired a small stake, and Mr. Kelly's bank provided funding for the deal, as was first reported by The Intercept, who also announced the bank's loans for one of Pruit's suburban Tulsa homes.

Pruit's principal partner was Robert Funk, the business magnate who led the recruitment firm Express Services. The selling price was not disclosed, but news reports indicated that they paid more than $ 11.5 million, with Mr. Funk carrying the largest charge.

Two months after signing the deal in November 2003, Mr. Funk attended a press conference where Mr. Pruitt announced a proposed legislation that would make it harder for Oklahoma workers to claim certain types of damages, the company said how Mr. Funks would benefit.

The relationship continued, with Mr. Funk acting as Deputy Governor during Mr. Pruitts failed bid as campaign chairperson in 2006. Mr. Pruitt announced his candidacy outside the ballpark and cited his efforts to make workers compensation among his accomplishments.

After losing the election, Mr. Pruitt took a break from public office, but his business relationship with Mr. Funk suggests a $ 200-million city center in a parking lot next to the ballpark. The city council shied away from the project, but Pruit's ambitions and fame grew.

At home in Tulsa, Mr. Pruitt worked with Mr. Wagner's firm, which had offices in SpiritBank's building. As a corporate lawyer, Mr. Wagner often represented the bank, but also represented a used by Ford's family used car dealers.

In 2004, Mr. Pruitt upgraded from a humble one-story home in which his family had lived to a mile to a $ 605,000 lakefront home over a decade. SpiritBank financed the house. The E.P.A. The spokeswoman said that Mr Pruitt could afford the house "on account of his private asset sales".



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Mr. Pruitt with Robert Funk in 2003. They invested together in the minor league baseball team of the Oklahoma City RedHawks. Credit
The Oklahoman

When Mr. Pruitt was on his way to successfully win his Attorney General race in September 2010, he and Mr. Funk announced that they had sold the RedHawks. They did not announce the price, but Forbes estimated its value a few years later at $ 21 million. SpiritBank, where Mr. Kelly was still managing director, "played a key role in facilitating the transaction by providing acquisition finance," states a press release.

As a candidate for Attorney General, Mr. Pruitt was not committed to the scale of his assets and how much money he made, but there was evidence that his finances had improved since his early days as a state senator. At the beginning of his tenure, he and his wife paid $ 1.18 million for a 5,518-square-foot Cotswold-style stone residence, which is featured in a book about Tulsa Homes. It has five fireplaces, a library and a guest apartment.

The Prosecutor General's Office

During his six years as Attorney General, Mr. Pruitt has paved the way for his now E.P.A. Expenditure is under investigation and growing political indignation.

Pruitt moved the Tulsa Justice Department's outpost into a top-notch suite in the Tower of the Bank of America, an area of ​​nearly $ 12,000 a month, quadrupling the annual rent. He called on his staff to drive him regularly between Tulsa and Oklahoma City, as several of his time known as Attorney General.

And he led treaties with the law firm of Wagner, which already did business with the state.

From 2011 to 2017, state records show the Attorney General's Office awarded more than $ 600,000 contracts to Mr. Wagner's Tulsa-based law firm, Latham, Steele & Lehman, Wagner-a rapidly growing work with the firm, which had received a total of over 100,000 $ in the four years before. These contracts are not offered in competition. The additional spending reflected an approach that was controversial even among some Republicans to hire private lawyers for state affairs, often in cases where federal legislation was out of the question.

"He said these people had special expertise that his agency did not have," said Paul Wesselhoft, a Republican former state representative. "He has an army of knowledgeable lawyers, so he did not have to spend the extra tax money on another law firm, it did not seem economical."

Mr. Pruitt used the Bank of America building as a base for his growing political ambitions. Oklahoma Strong Leadership, a political action committee he founded in 2015 to fund the Republican campaign, ran the building. The group shared a suite with another PAC tied to Mr. Pruitt, Liberty 2.0, as well as its election office.

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