ARAPAHO — The former manager of an association of 11 western Oklahoma counties that built an asphalt emulsion plant in Clinton pleaded guilty last week to two misdemeanor charges reduced from felonies.
Monte Wade Goucher, of Yukon, was one of four men indicted last year by a state multicounty grand jury on charges of embezzlement and conspiracy in connection with the operation of the emulsion plant, which was built in Clinton by Circuit Engineering District #7. Goucher was executive director of CED7 at that time.
The charges were filed in Custer County District Court at Arapaho.
Goucher pleaded guilty Sept. 25 after the felony counts were reduced to two misdemeanors: public official neglecting duty and Open Meeting Act violation. The charges allege, “I failed to maintain separate and distinct records for CED7, Trust Authority and 7 Oil. I also failed to conduct certain business in open meetings.”
In accepting the plea, District Judge Donna L. Dirickson, sentenced Goucher to:
• 45 consecutive days in the Custer County Jail, starting Oct. 2 and ending Nov. 16.
• Pay $10,000 restitution.
• Pay $400 in fines plus $400 in victims compensation assessments; and
• Pay a District Attorney Supervision Fee of $720.
In addition, Goucher, 59, is barred from ever again serving in government.
However, the judge did authorize Goucher to work with his personal computer “for at least two hours per day, at the discretion” of Sheriff Dan Day. Goucher is a certified engineer who works for a bridge construction company, according to his attorney, John “Billy” Coyle IV of Oklahoma City.
Dirickson also approved a three-year deferment on Goucher’s sentence. If he successfully completes his probationary period, his criminal record could be expunged after Sept. 25, 2026.
CED7 was created in 1998 by 11 counties
Circuit Engineering District #7 (one of eight in Oklahoma) was created in 1998 by 11 western Oklahoma counties: Tillman, Jackson, Kiowa, Harmon, Greer, Washita, Blaine, Custer, Dewey, Beckham and Roger Mills. The organization is based in Clinton.
The asphalt emulsion plant was constructed, equipped and operated by CED7 and its creation, the CED County Energy District Authority. Their primary purpose was to “engage in the business of manufacturing and marketing of a proprietary formula road repair and maintenance product,” State Auditor and Inspector Cindy Byrd wrote.
The plant was built at Clinton, financed with a $2,350,000 commercial loan that was repaid between July 2013 and December 2019 at a total cost of $2,677,902, the audit relates.
“It was determined that the authorization … to engage in a business for this purpose is not in compliance with the law,” Byrd wrote. State statutes do not authorize circuit engineering districts or county energy district authorities to manufacture, market and sell asphalt road emulsion, she wrote.
But a former president of CED7, Tillman County Commissioner Joe Don Dickey, said their legal adviser, the late Larry Derryberry, a former Oklahoma attorney general, and Goucher, then the CEO of CED7, “guided us through the proper processes and procedures known to them.” Also, the CED7 Title 60 trust was approved by then-Attorney General Scott Pruitt. “We were told all of this was legal,” Dickey said.
The auditors also alleged that CED7 committed nepotism when it paid nearly $17,000 to members of Goucher’s family between 2010 and 2013.
His son received 16 checks from CED7 that totaled $13,204, ledgers show. He was paid for contract labor, per diem, trailer usage, pay period bonus, and labor, the checks indicate.
And Goucher’s then-wife received five $750 checks totaling $3,750 from CED7 for “a fifth-wheel rental.” Moreover, minutes of CED7 meetings “do not appear to reflect board approval for any of these payments,” auditors reported.
Title 21 of the State Statutes “prohibits executive officers from appointing family members to any positions or duties in the officers’ government entity when the pay or compensation for the positions or duties is to be paid out of the public funds of the government entity.”
Commissioners ‘just wanted to stretch rural road dollars’
The county commissioners in CED7 “just wanted to stretch their rural road dollars,” Coyle told Southwest Ledger.
“We were trying to stretch our money,” especially after the state Legislature siphoned $230 million from the County Improvements for Roads and Bridges fund, Dickey told the Ledger earlier this year.
“One of the core services counties perform is county road maintenance,” Dickey said. “And the primary material we use is road oil.
According to the state audit, CED7 and the CED #7 County Energy District Authority entered into a joint-venture agreement, with the primary purpose “to engage in the business of manufacturing and marketing of a proprietary formula road repair and maintenance product,” an emulsion called 7 Oil.
The emulsion product was patented in 1993, but the ingredients and preparation instructions became public upon expiration of the patent in 2011.
The Authority contracted in April 2012 to buy the formula from its inventor for $575,000; that debt was retired in October 2019, records reflect.
According to Goucher, although the patent had expired, it was necessary to purchase the formula “because a number of details and nuances, along with the intellectual knowledge and notes of the inventor, were needed to properly produce” the emulsion.
“You have to have the components to make this particular product,” Dickey said. “It is unique from the others. It has more latex in it and some polymers, and it didn’t bleed. It was superior to other oils in use out there.”
Auditors contended that the 7 Oil road emulsion “is not unique enough to be considered a sole-source product.” Although the formula was patented, “it was not exclusive,” according to engineers from the Materials Division of the Oklahoma Department of Transportation.
7 Oil was started in 2010; the bank loan was approved in 2012; the state audit report was issued in 2020; and that was followed by the grand jury. “This has been going on for 13 years,” Coyle noted.
“No money was misappropriated in this case,” Coyle said. Nevertheless, “Some private companies didn’t want the government to get into their line of business; that’s probably where this began.”
With the government “pressing down” on Goucher, “65 witnesses lined up to testify, including several county commissioners and district attorneys – although Monte still contends he didn’t do anything wrong, once the charges were reduced to misdemeanors he felt the risk was too great to continue fighting,” Coyle told the Ledger.
‘We didn’t plead guilty’
Besides Goucher, the other defendants were Tim Binghom, 61, of Hobart; Jerry Lynn Dean, 76, of Elk City; and Dickey, 66, of Frederick.
Felony charges of embezzlement and conspiracy arising from the grand jury investigation were filed against all four men in Custer County on March 8, 2022.
Binghom, too, is a former president of CED7 and resigned from the organization’s board of directors in the wake of the indictments. He did not file for reelection last year as Kiowa County District 1 Commissioner.
Dean is a former county commissioner identified as a consultant to CED7.
Dickey, besides being a former president of CED 7, also was a member of the association’s board of directors until he, too, resigned in March 2022.
The indictments alleged the four men embezzled in excess of $2 million by diverting CED funds to “another entity for purposes not intended or authorized.”
The “other entity” was not identified in the indictment, but the conspiracy charge alleged the four men “willfully” and “feloniously” conspired to “orchestrate the management, construction, and operation of 7 Oil joint venture with Circuit Engineering District 7...”
However, the felony counts were dismissed and Dickey, Dean and Binghom pleaded “no contest” March 6, 2023, to the reduced misdemeanor charges of public official neglecting duty and Open Meeting Act violation.
“We pleaded ‘no contest’ to lesser, misdemeanor charges that had nothing to do with embezzlement,” Dickey emphasized. “They brought the plea deal to us. We didn’t plead guilty” to the two felony counts nor to the reduced, misdemeanor charges. In doing so, “I protected my retirement and my job.”
Under the plea agreement, Dickey was not required to resign from his commissioner’s post. He is in his 23rd year as a county commissioner and told the Ledger he’s considering one more reelection campaign next year.
Court records show that each of the three defendants:
• Was ordered to pay $1,000 in restitution.
• Was assessed $600 in fines.
• Must pay a $720 District Attorney Supervision Fee.
• Is required to pay Victims Compensation Assessments totaling $300.
• Received a four-year deferred sentence, which means that if they complete their probationary period without incident their criminal record probably will be expunged on or after March 6, 2027.
“It’s been a living hell for me and for Tim Binghom,” Dickey said. “It infuriates me that we had to go through this rigamarole.” Binghom retired and is “just farming” on his property at Hobart.
“This has been expensive for us,” Dickey said. “I spent $57,000” fighting the embezzlement and conspiracy charges. “We were prepared to go to the mat.” But ultimately “I followed the advice of my attorney [John Zelbst of Lawton] and chose to put this to bed and live to fight another day.”
‘Maybe a few mistakes but no wrongdoing’
By statute, CED7 has an independent audit that is performed every year, “is submitted to the State Auditor’s office and is posted on their website,” Dickey said.
“Maybe we made a few mistakes but there was no wrongdoing,” Binghom told the Ledger in April 2020.
“You can make mistakes but they’re not intentional mistakes,” Dickey told the Ledger last March. “We never did anything willfully or with criminal intent. We felt like we had good guidance, good counsel.”
Goucher claimed Byrd sought media attention and was on a “political witch hunt.” He subsequently resigned and “took another job for a lot more money,” Binghom said.
Goucher “saved the counties a lot of money” when he managed CED7, Binghom added.
An official at the Association of County Commissioners of Oklahoma and a spokesperson at CED7 both confirmed on March 9 that the district no longer operates the asphalt emulsion plant, but neither knew how long ago the plant was shut down.
However, the agenda for the June 16, 2020, CED7 board of directors meeting included, “Discussion and possible action on dissolving the ‘7 Oil Joint Venture’ between the 7 Oil County Energy District Authority and CED7.” It also included a discussion about appointing one or more liquidators of the 7 Oil joint venture.
“We made no money off of that plant, and we damned sure saved the taxpayers some money,” Dickey asserted. “We were spending less per mile than other county commissioners who were using other emulsions” on their roads.
The emulsion plant now sits idle in Clinton. “We turned it over to liquidators,” Dickey said.