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EPA chief’s ethics woes have echoes in his past

Scott Pruitt
Scott PruittJ. Scott Applewhite/Associated Press/File 2017

OKLAHOMA CITY — Early in Scott Pruitt’s political career, as a state senator from Tulsa, Okla., he attended a gathering at the Oklahoma City home of an influential telecommunications lobbyist who was nearing retirement and about to move away.

The lobbyist said that after the 2003 gathering, Pruitt — who had a modest legal practice and a state salary of $38,400 — reached out to her. He wanted to buy her showplace home as a second residence for when he was in the state capital.

“For those ego-minded politicians, it would be pretty cool to have this house close to the capitol,” said the lobbyist, Marsha Lindsey. “It was stunning.”

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Soon Pruitt was staying there, and so was at least one other lawmaker, according to interviews. Pruitt even bought Lindsey’s antique rugs, artwork, and dining room set as furnishings, she said.

A review of real estate and other public records shows that Pruitt was not the sole owner: The property was held by a shell company registered to a business partner and law school friend, Kenneth Wagner.

Wagner now holds a top political job at the Environmental Protection Agency, where Pruitt, 49, is the administrator.

The mortgage on the Oklahoma City home, the records show, was issued by a local bank that was led by another business associate of Pruitt’s, Albert Kelly.

Recently barred from working in the finance industry because of banking violations, Kelly is now one of Pruitt’s top aides at the EPA and runs the agency’s Superfund program.

At the EPA, Pruitt is under investigation for allegations of unchecked spending, ethics lapses, and other issues, including his interactions with lobbyists. An examination of Pruitt’s political career in Oklahoma reveals that many of the pitfalls he has encountered in Washington have echoes in his past.

According to real estate records, the 2003 purchase of the house for $375,000 came at a steep discount of about $100,000 from what Lindsey had paid a year earlier — a shortfall picked up by her employer, the telecom giant SBC Oklahoma.

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SBC had been lobbying lawmakers in the early 2000s on a range of matters, including a deregulation bill that would allow it to raise rates and a separate regulatory effort to reopen a case involving allegations that it had bribed local officials a decade earlier. Pruitt sided with the company on both matters, state records show.

In 2005, the shell company — Capitol House LLC — sold the property for $95,000 more than it had paid. While shell companies are legal, they often obscure the people who have an interest in them, and none of Pruitt’s financial disclosure filings in Oklahoma mentioned the company or the proceeds — a potential violation of the state’s ethics rules.

The Oklahoma City deal was one of several instances in which Pruitt appeared to have benefited from his relationships with Kelly and Wagner while in state politics.

During his eight years as a Republican state senator, Pruitt also upgraded his family residence in suburban Tulsa from a small ranch-style home to a lakefront property in a gated community.

In addition, he bought a sizable stake in a minor league baseball team and took a second job at Wagner’s corporate law firm. Kelly’s bank, SpiritBank, would be there for much of it — providing financing for Pruitt’s Tulsa home and his stake in the baseball team, as well as the mortgage for the Oklahoma City house.

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Pruitt’s interactions with SBC also show that his blurring of lines with lobbyists has roots in his Oklahoma years.

One of the issues at the EPA that has gotten Pruitt in trouble with government watchdogs involved his renting a room in Washington for $50 a night from the wife of an energy lobbyist who has had business in front of the agency.

Lobbyists and others in Oklahoma state politics who encountered Pruitt recalled him as a tough competitor who always had his eye on a higher office. Some called him a “Boy Scout” who was stingy with his money, while others said privately that he had exuded a sense of entitlement — that rules did not apply to him.

Former Oklahoma governor David Walters, a Democrat, described Pruitt as someone who looked out for himself over the needs of constituents, especially during his years as attorney general.

“I was disappointed to find him operating in a hyperpartisan manner and seemingly representing corporate interests over Oklahoma citizens,” Walters said.

In response to questions submitted by The New York Times about Pruitt’s finances in Oklahoma, an EPA spokeswoman said Pruitt’s business dealings with Kelly and Wagner “were ethical” and his stake in the shell company “was a simple real estate investment.”

During his six years as Oklahoma’s attorney general, Pruitt blazed a path of spending that holds new meaning now that his EPA expenditures are the subject of investigations and growing political outrage.

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Pruitt moved the attorney general’s outpost in Tulsa to a prime suite in the Bank of America tower, an almost $12,000-a-month space that quadrupled the annual rent.

He required his staff to regularly drive him between Tulsa and Oklahoma City, according to several people familiar with his time as attorney general. And he channeled state contracts to Wagner’s law firm, which was already doing business with the state.