NORMAN — Cleveland County officials are continuing to fight the release of documents they have received from the Internal Revenue Service that question construction costs for the new $52 million county jail.

Yet, the IRS says that a “tax entity” could release such documents if it so desired, although the IRS is prohibited from making those records public.

County officials confirmed that earlier this month, the IRS sent county commissioners two items called “Information Document Requests.”  

The IRS had questions about the bond issue for the jail approved by voters in 2008. Actual cost of construction was $24 million.

The IRS wanted to know whether the “amount of issuance was appropriate at $52 million,” said Carol Dillingham, assistant district attorney assigned to the case.

The IRS also has been concerned with how the bond proceeds were being spent, Dillingham said.

“They are privileged as defined in the act and will remain privileged until resolution of the continuing audit process, including appellate procedures, if necessary,” Dillingham wrote in an email message.

David Stell, IRS spokesman for Arkansas and Oklahoma, said he is prohibited from discussing a specific case, but a “taxpayer” that receives information from the IRS has the option of releasing that information to the public.

Based on federal law, “if a taxpayer wants to share information, that is entirely up to the taxpayer,” Stell said.

The IRS considers an individual taxpayer and a “tax entity” to be the same. Tax entities would include trusts and other entities of the state of Oklahoma and counties, like Cleveland County. The Cleveland County Justice Authority administers the business relating to the new jail.

Stell’s comments were made without his knowledge of the Cleveland County taxpayer’s case.

Dillingham cites a provision in an Oklahoma statute that says documents involved in an audit can be kept from the public “in anticipation of litigation or for trial by or for another another party.”

However, a provision in the Oklahoma Open Records Act states that “access to records … shall not be denied because a public body or public official is using or has taken possession of such records for investigatory purposes …”

Dillingham countered that the Open Records Act provision is superceded by the statutory law she cited.

Longtime state auditor Clifton Scott was diligent in making sure materials in audits were not kept private in the interim.

County Commissioner Rusty Sullivan, chairman of the Cleveland County Justice Authority, said all questions regarding the issue need to go to Dillingham and that he will not talk to The Transcript.

In 2008, Cleveland County voters approved a $52 million bond issue, to be paid from a quarter-cent sales tax during the next 20 years.

Residents voiced concerns when the bid for the new jail came in at $24 million. Trustees said that with other related expenses, such as site work, total cost of the project will be about $46 million, which still leaves $6 million in extra money.

The Transcript has requested, through the state Open Records Act, that the county release the IRS documents to the public.

“At this time, the county declines to produce the IDRs,” Dillingham said in an Oct. 19 letter to The Transcript.

Cleveland County commissioners act as trustees of the Cleveland County Justice Authority when they conduct business pertaining to the jail bond issue. Rusty Sullivan is chairman of the authority, and commissioner Rod Cleveland is a trustee member. The third member is George Skinner, who has not run for re-election.

Sullivan and Cleveland, both elected officials, have referred questions to Dillingham, who works for District Attorney Greg Mashburn, also an elected official.

After the IRS sent the documents to the justice authority, trustees hired Washington, D.C., lawyer Brad Waterman to prepare a response from the county. Waterman is an experienced tax attorney.

Dillingham said the response by Waterman would not be public record but would be considered attorney/client-privileged information.

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