A campaign donation to Oklahoma Treasurer Todd Russ from the owner of an investment firm that won a state bid further complicated the state’s Invest in Oklahoma program and may have led to the firm pulling out of the process.
A letter from 311 Capital Management LLC sent Friday to the five-member Invest in Oklahoma board said the company could no longer pursue a potentially lucrative investment advisory role to invest a portion of the state’s $45 billion in pension, trust and endowment assets in Oklahoma-based private equity and venture capital funds.
The letter came just days after Oklahoma Watch asked about a $2,500 campaign donation in February 2025 to Russ from Bond Payne, the owner of Citizen Capital LLC and the parent company of 311 Capital.
Federal securities rules prohibit investment firms from seeking state pension advisory roles if an employee or other associate donated to an elected official with a role in approving a contract. The so-called pay-to-play rule has a two-year lockout period on receiving compensation under such investment advisory contracts.
The Invest in Oklahoma board voted Feb. 17 to award the investment advisory contract to 311 Capital over two other bidders, MEMCO and GCM Grosvenor. Russ’ office ran the bidding process, and he recommended 311 Capital be awarded the bid.
The campaign contribution is the latest twist in a bidding process that has been marred by undisclosed business relationships and shared lobbyists uncovered by an Oklahoma Watch investigation. Oklahoma Attorney General Gentner Drummond expressed his concerns about the bidding process in a letter to Russ sent this month after the Oklahoma Watch articles.
Drummond, a Republican who is running for governor, said the bidding process was tainted by collusion and undisclosed conflicts of interest. The attorney general said May 6 he’d sue over any contract based on the bid award to 311 Capital Management.
Neither Payne nor Russ responded to detailed questions about the connections among the campaign contribution, the federal pay-to-play rule and 311 Capital Management. Instead, their representatives provided general statements about the bidding process. Payne served as Stitt’s chief of staff from 2020 to 2022.
“311 Capital Management complied with the requirements of the Treasurer’s RFP and conducted ourselves appropriately as part of our efforts to help organize capital for investment in Oklahoma,” Payne said in a written statement. “We believe we did and have followed all applicable statutes, rules and bid procedures.”
Russ’ statement said his campaign receives hundreds of donations and he doesn’t check his donor list when considering state business. He said the proposal from 311 Capital was signed by its managing partner, Steve McDonnold.
“Any contract that would be entered into between the Invest in Oklahoma Program and 311 Capital Management would be signed by Steve McDonnold,” Russ said in his May 13 written statement. “Remember, there are (zero dollars) in the program, 311 Capital Management will receive no income directly from the program as bid in their proposal and my office would be working with Steve McDonnold.”
But Russ, in a 23-minute interview with KWTV about the Invest in Oklahoma program on May 12, said there was little difference between Citizen Capital and 311 Capital.
“They knew Oklahoma,” Russ said in the interview. “They met the criteria on trades in Oklahoma. I don't know a lot of background on these people. I dealt with their principal, Steve McDonnold. Great guy, highly professional, long history, probably 40 years in the industry, highly seasoned. 311 was umbrellaed under Citizen Capital, which has been around a long time.”
The 311 Capital response to the Invest in Oklahoma bid, obtained under the Open Records Act, listed Payne as founder of Citizen Capital and 311 Capital. The RFP required any successful bidders to have an investment track record, but records show that Citizen Capital founded 311 Capital in September, just months before the treasurer’s office issued an initial RFP.
“Based in Oklahoma City, Mr. Payne is responsible for the vision of the firm, establishing key
relationships for fundraising and for sourcing investments for the (fund of funds) and direct investments of the 311 Fund,” the RFP response said.
Payne was the sole name on a state form on Dec. 5, noting non-collusion as part of 311 Capital’s response packet to the RFP.
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 to the board to hire the firm. Instead, 311 Capital would get paid by the entities it brought to the board and after any investments approved by the separate pension or state investment boards.
The federal pay-to-play rule has been in place since 2010 and has survived several legal challenges. Its existence is well-known in the securities industry. The rule has been an issue in recent presidential campaigns, in which a candidate was a governor whose role included chairing state investment boards or appointing members to a pension board of directors.
Gov. Kevin Stitt chairs the Invest in Oklahoma board, whose members include Russ, Lt. Gov. Matt Pinnell and legislative appointees Brady Sidwell and Zack Hall.
State campaign filings show Payne also donated to the Stitt and Pinnell campaigns. But those donations came outside of the two-year lockout period for pursuing state investment advisory contracts.
In 2024, the Securities and Exchange Commission charged Minnesota investment advisory firm Wayzata Investment Partners LLC over a single campaign contribution. Without admitting wrongdoing, the firm settled the enforcement action and paid a $60,000 civil penalty.
“Advisers Act Rule 206(4)-5 does not require a showing of quid pro quo or actual intent to
influence an elected official or candidate,” the SEC said in its order.
SEC Commissioner Hester Peirce, an appointee of President Trump in 2018, has consistently dissented from enforcement actions involving the pay-to-play rule. She said the rule is a blunt instrument that chills political speech.
“To avoid questions from commission examiners, the easiest course is not to contribute to political campaigns,” Peirce said in a recent dissent. “So, the cost of working for an investment adviser is that you have to give up your right to contribute to certain political campaigns.”
This article first appeared on Oklahoma Watch and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.