DALLAS -- Whatever the final plan on the proposed Oklahoma turnpike, the revenue bonds to finance the project will be sold competitively and probably in a multiple series, the executive director of the Oklahoma Turnpike Authority said this week.
Director Terry Young said the authority's finance committee recommended more than a month ago that the bonds be sold competitively and sent letters to the 12 bond underwriting teams that were already interviewed for the project.
Young said the turnpike board has accepted that recommendation, and he does not anticipate rethinking the decision.
The decision comes in the wake of a statement made by Gov. David Walters that the bonds should be competitively bid, partly because of a controversy surrounding the negotiated sale of New Jersey Turnpike bonds. Federal investigators are looking into the New Jersey sale and alleged influence peddling by firms in the syndicate.
The move to go competitive comes at a time when Walters has been indicted for violating campaign finance laws and some are questioning the 1990 campaign contributions made to the governor by bond firm employees and associates.
"The governor didn't feel he was in a strong enough position to move forward with the project without being squeaky clean, so he wanted to do a competitive sale," said a source close to the project.
Such a sale also eliminates conflicts that could come up because of past campaign contributions. At least 33 lobbyists, lawyers, company officers, members of families, associates, and employees of the state's two most prominent public bond underwriters -- Stifel, Nicolaus & Co. and Leo Oppenheim & Co. -- contributed $61,335 to Walters' 1990 gubernatorial campaign, according to a McCarville/Hill Report published in 1991.
The Oklahoma political newsletter is published by Mike McCarville, who is a Republican. He said that some legislators and others are concerned about the contributions.
Representatives from the two firms declined to comment, although they said the firms were participating in the voluntary moratorium on campaign contributions until a new Municipal Securities Rulemaking Board rule restricting such contributions is reviewed by the Securities and Exchange Commission and approved.
The governor's office also did not comment.
Although some see competitive bidding as a wise move for a governor under fire, several investment bankers and bond experts said the competitive bidding would not be viable unless the issue was done in a multiple series.
Vincent Matrone, managing director for municipal finance at Rauscher Pierce Refsnes in Dallas, said spreading the issues over a five-year period would make more sense than the initial plan to bring the whole issue to market at once.
"If they try to rush the whole thing to market, no one will bid on it," Matrone said.
At this point, Young said, the Turnpike Authority is strongly considering a series of bond issues.
Jim Joseph, the state's bond adviser, said the only feasible way to employ competitive bidding would be to reduce the size of each sale.
The dozen teams of bond underwriters interviewed for the project generally supported a negotiated sale, Joseph said, partially because they could premarket the issue and reduce their financial liability.
A representative of the authority's financial adviser, Evensen Dodge Inc., could not be reached for comment.
