Oklahoma Attorney General Gentner Drummond refused to approve a contract for an investment advisor in the Invest in Oklahoma program, citing collusion and undisclosed conflicts of interest that tainted the bidding process.
Drummond sent a five-page letter to Treasurer Todd Russ on Wednesday outlining his concerns about the bidding process and the Invest in Oklahoma board vote to award a contract to 311 Capital Management LLC, a firm owned by Gov. Kevin Stitt’s former chief of staff. Stitt and the rest of the five-member board voted Feb. 17 to approve the bid.
“The award is invalid as a matter of law, the procurement that produced it was tainted by collusion and undisclosed conflicts of interest, and a contract executing the award would be void by operation of statute,” the letter to Russ said.
The attorney general’s letter comes after Oklahoma Watch published stories in April outlining the bidding process and the previously undisclosed business links between Stitt and Bond Payne, whose Citizen Capital LLC owns 311 Capital Management. Oklahoma Watch obtained a copy of the letter Wednesday morning.
Russ, who is also on the Invest in Oklahoma board, ran the bidding process to find an investment advisor to recommend potential deals for state pension and trust funds to invest in.
In a written statement, Stitt said he had severed business ties to Payne before the Invest in Oklahoma board voted on the request for proposal.
“As available in the governor’s transparent annual financial disclosures, Gov. Kevin Stitt held no financial interest in entities related to 311 Capitol nor in any entity owned by Bond Payne when he voted as a member of the Invest in Oklahoma board,” said the statement from Tevis Hillis, the governor’s spokesperson.
Russ’ office said Wednesday the attorney general’s claims were without merit and said the timing of the letter was suspicious.
“There has not been a contract provided from the Attorney General’s office with 311 Capital and the state, nor have we drafted one,” said the written statement from Deputy Treasurer and Chief of Staff Jordan Harvey. “No funds have been transferred to 311 Capitol and there are zero dollars in the fund for any type of investments to be made. Therefore, the details of this letter are factually incorrect.”
Payne had not responded to an interview request at the time this story was published.
Lawmakers passed the Invest in Oklahoma Act in 2021. It encourages state pensions and endowment trusts to invest up to 5% of their assets in Oklahoma-based private equity, venture capital and growth funds. The RFP documents stated that the possible universe of investment funds available under the Invest in Oklahoma program could exceed $2.37 billion.
The winning bid by 311 Capital Management said it wouldn’t charge any upfront fees to the Invest in Oklahoma board. That was a key part of Russ’ recommendation of the board to hire the firm. Instead, 311 Capital would get paid by the entities it brought before the board and after any investments approved by the separate pension boards or boards for the Tobacco Settlement Endowment Trust or the Commissioners of the Land Office.
Two other bidders, GCM Grosvenor and MEMCO, also responded to a second request for proposal in January after the first RFP in November only attracted one response – from 311 Capital Management.
MEMCO’s bid had a minimum fee of $875,000 per year, Russ said at the Feb. 17 meeting. GCM Grosvenor’s response on fees charged a quarterly fee of $75,000, or $300,000 per year.
Nobody at the Feb. 17 meeting mentioned the links between Stitt and Payne, who formed 311 Capital in September. Stitt was an early investor in The Citizen building, a downtown Oklahoma City development backed by one of Payne’s companies.
After questions from Oklahoma Watch in early April, Stitt filed updated personal financial disclosure documents with the Ethics Commission. He divested from The Citizen investment in June 2024, the governor’s office said.
Russ’ office and Payne’s Citizen Capital also employed the same lobbying firm, according to records filed with the state Ethics Commission.
“During the active procurement period, the same registered lobbyist, Jason Dunnington, simultaneously represented 311 Capital’s parent (Citizen Capital) and the procuring office (the State Treasurer),” Drummond’s letter said. “Governor Stitt – a member of the Invest in Oklahoma Board who serves as its chair and who voted on the award – was, at the time of the vote, identified in his 2024 personal financial disclosures as an investor in JRB Citizen LLC, an entity connected to Stephen Bond Payne and to Citizen Capital.”
As part of the budget deal between Stitt and Republican leaders in the Legislature, House Bill 4072 takes $200 million from an existing savings fund and creates the Taxpayer Endowment Trust Fund. The sovereign wealth fund was added to the list of pension funds and trust funds that may invest up to 5% of their assets in Oklahoma-based private equity, venture capital, or growth funds. Stitt signed the bill on April 22.
Drummond’s letter said a section of HB 4072 attempted to retroactively exempt the Invest in Oklahoma program and the new Taxpayer Endowment Trust Fund from any provisions of the Central Purchasing Act.
“The negative inference cuts the other way: had the Legislature understood the Invest in Oklahoma program to be already exempt, there would have been no reason to enact a separate, fund-specific exemption for the Taxpayer Endowment Trust Fund,” the letter said.
Drummond’s letter said he wants Russ and the board to rescind the Feb. 17 contract award to 311 Capital Management and to conduct a new request-for-proposal process for investment advisors to the Invest in Oklahoma program.
“This office stands ready to confer with you on a lawful path forward,” the letter concludes. “We are not prepared to provide legal cover for the path you have chosen.”
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