OKLAHOMA CITY – Three current or former city executives in Kay County are named in a collective total of nine felony charges arising from a state investigative audit.
Thomas J. Greenfield, 43, the incumbent mayor of Blackwell, faces three charges of embezzlement, one count of fraud and one of conspiracy. Kirk Eugene Henderson, 61, former fire chief and now city manager of Tonkawa, and Thomas Lynn “Chip” Outhier, Jr., 68, former city manager of Blackwell, are both charged with fraud and conspiracy.
The charges stem from transactions totaling almost $129,500 between the City of Blackwell and G&C Concrete Co., which was co-owned by Greenfield.
The staff of State Auditor and Inspector Cindy Byrd launched the examination of Blackwell’s city ledgers at the request of District Attorney Brian Hermanson. On July 8, 2021, the day on which Byrd submitted her investigative audit, Hermanson contacted the Oklahoma State Bureau of Investigation for its assistance, as well.
According to the state audit, Greenfield co-owned G&C Concrete from its inception until it closed in April 2018.
The City of Blackwell purchased materials from G&C prior to Greenfield becoming a member of the city council, and continued buying from the company even after his election and through December 2017, the audit showed.
Mayor Greenfield “directly profited from payments made to G&C Concrete” contrary to Article X, Section 11, of the Oklahoma Constitution, Byrd pointed out. That provision decrees: “The receiving, directly or indirectly, by any officer of … any county, city, or town … of any interest, profit, or perquisites, arising from the use or loan of public funds in his hands … shall be deemed a felony.”
In other words, for an elected city official to conduct business with the municipality he serves, and to profit directly or indirectly from that relationship, is a conflict of interest, Byrd noted.
City credit card use
was widespread
Furthermore, G&C Concrete purchases were paid for with a city credit card, Byrd noted. “The City Council did not receive copies of credit card statement for review or approval.”
Although there were “some indicators” that the council should have known about the purchases from G&C, council members “represented they had no knowledge the City was improperly doing business with G&C Concrete,” Byrd wrote.
A city ordinance mandates that all claims against the city must be accompanied by a purchase order and approved by the City Council. Between 2014 and 2017, state auditors discovered, more than 40 employees utilized city credit cards while incurring costs in excess of $1.9 million. None of those credit-card charges was accompanied by a purchase order or approved by the City Council, the state audit revealed.
G&C Concrete was paid with the city’s credit card. From June 2016 through April 2018 Greenfield co-signed the credit card payment checks “and was aware the credit card purchases were not being presented to the Council for approval,” Byrd wrote.
‘Straw purchase’
leads to charges
The conspiracy charge arose from an alleged going-out-of-business “straw purchase” nearly three years ago that involved Greenfield, Outhier and Henderson. (A straw purchase is one in which a second person agrees to acquire an item for someone else who legally is prohibited from buying that item.)
The charge alleges that between April 1 and May 3, 2018, the three men conspired to commit fraud by “liquidating and selling certain items” in a ‘straw purchase’ in which Greenfield “sold certain items to the City of Tonkawa” and in turn the City of Tonkawa sold those same items to the City of Blackwell.
The City of Tonkawa “purchased assets” from G&C Concrete “as part of a business liquidation auction” and sold them to the City of Blackwell “without first taking possession of the items,” OSBI agent Richard Brown wrote in an affidavit.
The alleged scheme worked like this:
Ÿ G&C Concrete sold equipment and materials in a business liquidation auction in April 2018.
Ÿ The City of Tonkawa purchased 116 concrete blocks and two snowplow blades at the auction on April 10.
Ÿ A week later, the Tonkawa City Council voted to dispose of all of the blocks and one of the snowplow blades as surplus.
Ÿ On April 23 the City of Blackwell issued a purchase order for $5,113 to take ownership of the blocks and the snowplow blade and received an invoice from the City of Tonkawa.
Ÿ The purchase of the concrete blocks and the snowplow blade from Tonkawa was approved in the Blackwell City Council meeting on May 3, 2018, as part of the “consent agenda.” Greenfield voted yes on that agenda item.
The state audit relates that according to Blackwell Street Department Supervisor Chuck Anderson, “Blackwell took possession of the concrete blocks and the snowplow blade directly from G&C Concrete’s location. The City of Tonkawa never took possession of these items after they were sold.”
Tonkawa City Manager Henderson told state auditors that he bought the items at auction and sold them to Blackwell because then-Blackwell City Manager Outhier “requested he make the purchase and because the items were for the [Kay County] fairgrounds which the City of Tonkawa also used.”
Henderson and Outhier “both acknowledged they discussed the purchase of these items prior to the auction,” Brown wrote in his affidavit. Outhier “knew the City could not buy directly from G&C Concrete so he utilized the City of Tonkawa to make a straw purchase on Blackwell’s behalf.”
Court appearances set
Greenfield was elected to the Blackwell City Council in April 2015, was appointed mayor in June 2016 and was elected mayor in February 2017; he occupied that post through June 2020, when he lost a bid for re-election. However, he was re-elected mayor in April 2021 by a margin of 61%-39% of the 1,065 ballots tabulated.
Greenfield was released from custody on $5,000 bond, and his preliminary hearing in Kay County District Court is set for March 28.
Henderson was released from custody on $1,000 bond with orders to be in Kay County District Court the afternoon of March 3. After the criminal charges were filed, the Tonkawa City Council voted unanimously in a special session to retain Henderson as city manager.
Outhier retired in November 2018, Blackwell city council minutes reflect; a court record indicates he now lives in Okeene. Outhier was released from custody on $5,000 bond with orders to appear in Kay County District Court on April 1.