By Paul Monies, Oklahoma Watch
Former oil and gas executive Elliot Chambers was in government service for just two years but left behind a string of lawsuits and audits that continue at the Oklahoma Commissioners of the Land Office.
The Land Office has racked up more than $295,000 in legal expenses paid on Chambers’ behalf in an ongoing employment lawsuit. An outside investigative audit into the agency looking into investments under Chambers’ direction has cost $100,000, with more bills coming due. And a wrongful termination lawsuit cost the agency almost $40,000.
Central to those expenditures was the agency’s first foray into direct investments. Both lawmakers and Republican Gov. Kevin Stitt, who sits on the commission overseeing the agency, were bullish about that type of investment. It was a departure from the more staid, predictable returns usually seen in state investment and pension funds.
In 2022, the Land Office put $8 million into an Oklahoma City-based company called Berry-Rock Homes. The company manages almost 700 homes in Oklahoma and Missouri. The mortgage alternative allows prospective homeowners to rent until they can build up enough credits to buy the homeafter several years. The partnership agreement with the Land Office stipulated the state would earn an 11% return each year, higher than most other typical investments.
The Land Office manages a $2.7 billion fund in state land, oil and gas leases and commercial properties to benefit public education. The five-person commission overseeing the agency comprises some of the state’s top elected officials, including the governor, lieutenant governor, auditor and superintendent of public instruction. It distributed $145.1 million to schools, colleges and universities in fiscal year 2024.
Chambers, a former executive with Chesapeake Energy Corp. and White Star Petroleum LLC, resigned from the Land Office under a cloud in August 2022.
A former internal auditor accused Chambers of benefiting personally from a prior investment in Berry-Rock through a related company of one of the agency’s former investment managers, Victorum Consulting. The internal auditor was fired and later settled with the Land Office. Records show she received four months of back pay, a lump sum of almost $25,000 and attorney fees of $15,000. The settlement, obtained through an open records request, included a mutual non-disparagement provision.
Victorum representatives declined to comment. In 2021, the company signed a $90,000-per-year contract to manage the Berry-Rock investment on behalf of the Land Office. Victorum also advised the agency on an earlier direct investment into a company called Bye Aerospace that never came to fruition.
The Victorum Consulting contract fell outside the normal channels for competitive bidding. The Land Office has a statutory exemption from going through the competitive bidding process for investment consultants.
Emails between the Land Office and Victorum show agency officials questioned an invoice from Victorum. But contracts below $100,000 did not have to be approved by the five-member Commissioners of the Land Office that oversees the agency.
“Evidently, Elliot signed the contract without having a PO (purchase order) in place and they have submitted their first invoice,” said the internal email from April 15, 2021.
Because of the lack of a purchase order, the Land Office and Victorum signed an agreement so Victorum could get paid retroactively for its first month of fees.
Depositions Probe Outside Work, Investments
In depositions in a related employment lawsuit stemming from his time at the Land Office, Chambers was asked about his outside investments before and during his time at the agency. He was also asked about spending time on work and emails for a personal business, Aurelian Investments, during business hours for the Land Office.
Chambers asserted his Fifth Amendment right against self-incrimination more than 180 times in a June 2023 deposition, according to court documents in the civil case. Records provided in discovery showed thousands of emails sent and received regarding Aurelian matters by Chambers and his personal assistant, who also worked at the Land Office, during agency business hours.
Land Office officials said Chambers told them of his outside work with Aurelian and it didn’t violate state employment prohibitions on outside employment. Depositions detail that scenario, with the caveat that Chambers, as an agency secretary, had no supervisor other than the governor. It’s unclear if he told them about his prior investments in Berry-Rock before the Land Office made its own investment in the company.
“In his first days at work, Mr. Chambers explained to a number of commission staff, particularly the leadership of commission staff, including myself as general counsel, that a condition of his appointment was that he had a private entity that he ran and that he would be doing work for that entity on the side,” Land Office General Counsel Bennett Abbott said in a May 2024 deposition in the employment case. “We also explained that steps were taken to make sure that there’s no interference between that entity and if they worked at the CLO, for example, they didn’t buy or sell any oil and gas leases in Oklahoma; they were all outside of Oklahoma.”
Chambers did not respond to emails requesting comment, and his attorneys did not return calls for comment on his behalf.
Secretary Had Berry-Rock Investments
Nick Berry, one of the founders at Berry-Rock, said Chambers invested in Berry-Rock before he was named secretary of the Land Office in July 2020. Chambers’ investment came through a capital club set up by Victorum Capital. That capital club allows members to pay annual fees to examine investment opportunities.
“As he became CLO (secretary), he called us and said that an initiative of the CLO was to do direct investments and that he had invested in our fund prior to him becoming (secretary),” Berry said. “Because of his investment experience with us, he thought this would be a very great investment for the state and asked if we would consider taking state money.”
After that conversation, Berry said the details of the CLO’s investment in Berry-Rock were worked out by their attorneys. The agency’s investment in Berry-Rock came under a limited partnership agreement.
The five-member Commissioners of the Land Office never directly voted on the agency’s Berry-Rock investment. Instead, it was approved by the agency’s three-member investment committee along with an investment plan update. State Auditor and Inspector Cindy Byrd, who is one of the land commissioners, questioned the changes and the powers the secretary was given under the new investment policy. In a December 2021 email, Chambers tried to placate the auditor.
“From a practical point of view, these investments can be time-sensitive,” Chambers wrote in the Dec. 13, 2021, email. “The ability to obtain a quorum of the Investment Committee is not as difficult as obtaining a quorum for a Commissioners meeting. We all feel it is important to the Commissioners to have a say in these investments. The proposed Investment Plan allows for the oversight from agents of the Commissioners.”
Chambers sent that email just weeks before the investment policy changes came before the commission. It approved the changes in a 2-1 vote in December 2021. Stitt and Lt. Gov. Matt Pinnell voted for the investment plan update, with Byrd voting against it. Two of the five commission members were absent from that meeting. Byrd questioned whether a vote by just two members of the five-member commission was valid.
Byrd also was the lone no vote when the commission voted to contract with Victorum as an investment manager for direct investments. Stitt and Pinnell voted for that contract.
Berry-Rock Investment Scrutinized
Since then, Berry-Rock has been under scrutiny from the Legislature, whose spending watchdog detailed its concerns with the investment last year. In an interview, Berry said his company would unlikely be willing to renew the CLO partnership, which expires in 2026.
“We’ve been very disappointed in the political arena we found this investment in,” Berry said. “We’re excited because we’re doing a great thing in the community with our business model. And we’re doing a great thing for educators in the state of Oklahoma by being able to provide returns back to the CLO to go toward education.
“Now, because of a lot of the undue negative press that we’ve gotten based on politics, we really don’t have a huge desire to continue to take money from state entities, which is unfortunate for everybody,” he said.
Last year, the state auditor and the attorney general’s office contracted with a Tulsa-based forensic accounting firm, Workman Forensics LLC, for an investigative audit of the Land Office.
The auditor’s office would typically undertake such an audit, but Byrd recused herself because she is one of the five land commissioners overseeing the agency. The initial contract had the state spending up to $100,000 for the investigative audit. Contract documents show the cap was raised in August for another $50,000.
A heavily redacted case plan and scope of work for the audit shows snippets of what auditors are looking for, including “Determine the source of funds” and “Determine the type of investment made by the CLO.” Neither the attorney general’s office nor the auditor had an estimate on when the investigative audit might be finished.
At an Oct. 30 meeting, the Commissioners of the Land Office voted 4-0 not to reimburse the auditor’s office for the outside auditor costs. Gov. Kevin Stitt’s legal team argued the law was ambiguous on which agency should pay for the audit, going against the advice of the Land Office’s general counsel. Byrd was not at the meeting.
But the commissioners voted to keep paying Chambers’ legal bills in the pending employment case. So far, the Land Office has paid more than $295,000 to an outside law firm representing the former secretary. The Land Office said it had a duty to defend Chambers in the lawsuit because the incident happened when he was still secretary. The agency has contracted with another outside law firm to defend itself in the lawsuit.
“Typically, the attorney general will represent individual state officials named in civil lawsuits,” the agency said in a written statement. “In the instant matter, the Oklahoma attorney general declined to represent Mr. Chambers. Thus, the CLO retained private counsel to defend Mr. Chambers individually as the legal duty to defend Mr. Chambers remained.”
Oklahoma Watch, at oklahomawatch.org, is a nonprofit, nonpartisan news organization that covers public-policy issues facing the state.
