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McClatchy-Tribune  07/24/2014 6:05 AM ET
Oklahoma Supreme Court referee hears arguments to reopen 1989 telephone case [The Oklahoman, Oklahoma City :: ]

July 24--A referee at the Oklahoma Supreme Court heard arguments Wednesday on whether justices should allow a review of a 1989 Corporation Commission case involving Southwestern Bell Telephone Co. that passed with the vote of a bribed commissioner.

An attorney for two telephone company customers, Nichols Hills Mayor Sody Clements and retired Air Force Lt. Gen. Richard Burpee, said justices should reverse the court's 1991 decision that forbids review of the Oklahoma Corporation Commission case.

"Southwestern Bell and the Oklahoma Corporation Commission made this utter mess, and as such, the court should require they correct it," attorney Andrew Waldron said.

Waldron said the high court's 1991 ruling was made before bribery allegations were made public. Former Corporation Commissioner Bob Hopkins and William Anderson, an attorney hired by Southwestern Bell, were convicted in 1995 and served time in federal prison.

The commission case -- started in 1986 but not decided until 1989 -- involved what Southwestern Bell should do with a $30 million windfall created a by a change in federal tax law. At issue was whether the surplus should be reinvested in company operations or refunded to consumers.

The commission voted 2-1 to adopt a settlement proposed by Southwestern Bell and the commission's public utility division to reinvest the money in company operations. Corporation Commissioner Bob Anthony, who took office in 1989, cast the dissenting vote.

Excluding Hopkins' bribed vote, the commission's 1989 order didn't get a majority of the three-person commission, Waldron said.

"Fraudulently obtained judgments should never be final," Waldron said.

Sody and Clements want the court to grant them class-action status to review the 1989 case on behalf of customers for possible refunds and interest of up to $14.3 billion.

Anthony, who worked with the FBI on the criminal cases against Hopkins and Anderson, told court referee Greg Albert the bribery scheme also included Southwestern Bell employees.

"Multiple executives and multiple attorneys for Southwestern Bell Telephone were involved in bribery or attempted bribery or other forms of criminal conduct," Anthony said.

Anthony said the 1989 case should be sent back to the Corporation Commission for further review and possible refunds.

Clyde Muchmore, an attorney for AT&T Inc., the holding company for Southwestern Bell, said no telephone company employee was ever charged or convicted of a crime. Muchmore said reopening the case wasn't in the public interest and wasn't practical more than two decades later.

Muchmore pointed to the 1991 court decision that said the commission acted in its legislative capacity when deciding what Southwestern Bell should do with the $30 million surplus in 1989. Those legislative decisions by the commission were based on policy and cannot be set aside by the court, he said.

Previous actions by the court and the commission regarding the 1989 case should make it final, Muchmore said.

"Let's see what position this puts the court in if you say if a commissioner was improperly influenced, that you can come to this court and have it looked at," Muchmore said. "Today it's bribery. Tomorrow, it's influence by campaign contributions, or it's prior history, or it's influence by ex parte contacts. That would invite endless pursuits, all brought in this court."

Attorneys for the state attorney general's office, which represents consumers in utility matters before the commission, opposed reopening the case. Attorney Tess Hager said the commission decided in 2003 that it wasn't in the best interests of utility consumers to reopen the case.

"It properly had all facts before it regarding bribery and viewed, in light of all those facts, to not reopen the cause," Hager said.

Albert will issue a report to justices summarizing case arguments. Based on the court's summer schedule, he said they may make a decision by September.

 

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