MuskogeePhoenix.com, Muskogee, OK

Oklahoma News

June 5, 2014

Judge upholds takeover of state's American Legion

OKLAHOMA CITY (AP) — National leaders with the American Legion can retain control of Oklahoma’s operations amid an investigation into the state organization’s financial troubles, a federal judge has ruled.

National leaders took over the Oklahoma headquarters and fired state officials because of financial losses for which they blamed embezzlement. The state officials sued, and U.S. District Judge Timothy DeGiusti ruled Tuesday that the national leaders can remain in charge.

DeGiusti ruled that a reorganization overseen by national leaders is in the public interest, even though the American Legion’s “conduct here is not devoid of the appearance of heavy-handedness.”

“However, faced with an urgent situation in which the Oklahoma Department admittedly lacked basic financial operational controls, and administratively was in disarray, it cannot be said that the national organization acted unreasonably, arbitrarily, or hastily in protecting the interest of Oklahoma members and the image of the overall organization,” the judge wrote in his order.

According to The Oklahoman, the national leaders estimate the losses at $500,000 to $1 million. No one has been charged over the missing funds.

Tom Davis, a former Maryland Legion adjutant who was hired to oversee the reorganization effort in Oklahoma, testified that funds from national headquarters have been used to pay the Oklahoma Legion’s overdue bills and unpaid federal taxes.

“We had to stop the bleeding,” Davis said.

National officials intend to release their control of Oklahoma operations once new state leaders are chosen in July, Davis said.

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