OKLAHOMA CITY, Okla. — UPDATE, 4/28/2022: While Gov. Stitt doesn’t explicitly discuss the deal between Swadley’s Foggy Bottom Kitchen and the Oklahoma Tourism and Recreation Department, he has released this statement:
“I have called for more audits than any other governor in state history and welcome the Legislature joining me to protect the taxpayers and shine a light on any kind of corruption or bad actors involved in state government.
“The state does business with more than 4,600 companies and I welcome a review of each one to provide maximum transparency for Oklahomans.”
The Oklahoma Tourism & Recreation Department has canceled the lease agreement with Swadley’s Foggy Bottom Kitchen because of suspected fraudulent activity and questionable business practices, department officials announced Monday.
The decision comes after lawmakers sounded off about a legislative report into a deal between the tourism department and Swadley’s Foggy Bottom Kitchen restaurants. The project stems from a 2020 contract to upgrade dining at state parks.
Documents showed that invoices often include a 15% management fee, and many included a 15% consulting fee. Swadley’s also was paid $77,000 a month to manage the restaurants.
At first, the state agreed to pay for losses up to $1 million. A year and a half later, it ballooned to $2.1 million and included an increase in management fees.
Tourism was also on the hook for more than $10 million in repairs and upgrades to restaurants at state parks, including a waterfall at Sequoyah State Park and a cave at Robbers Cave State Park.
In a news release Monday, the tourism department said it initiated an internal investigation in the early fall of 2021 after reports of financial irregularities were brought to its attention. The department stopped payments for construction costs in September and for management fees in December, according to the news release.
“After extensive review, it has become clear the continuation of the agreement with Foggy Bottom Kitchen is not in the best interest of Oklahoma taxpayers,” tourism department officials said in the news release. “While the transition won’t be easy, our first duty is to safeguard taxpayer funds.”
The news release says Oklahoma State Parks staff are reaching out to all existing reservations to make sure catering needs are fulfilled. Staff also are working with local small businesses to find solutions to meet park guest demands until new restaurant options can start in facilities.
“Terminating the agreement is the department’s first step,” officials said in the news release. “We are continuing to cooperate with investigators and auditors to determine the extent to which unlawful behavior has been perpetuated against the state.”
Tourism department officials said in the release that they are exploring options to recover taxpayer dollars paid to the operator for services or items the department was invoiced but not provided.
Last week, Gov. Kevin Stitt addressed the ongoing controversy and promised to protect taxpayers.
“If there’s a vendor out there or there’s a contract that this contractor isn’t performing correctly or overcharging the state, we will find that out,” Stitt said. “We will find that out. We will terminate that contract. We will sue that vendor.”
Swadley’s Foggy Bottom Kitchen released a statement Monday:
“Swadley’s Foggy Bottom Kitchen is alarmed and dismayed that the Oklahoma Tourism and Recreation Department, in a letter delivered by Executive Director Jerry Winchester, has today unilaterally terminated our contract and accused us of ‘fraudulent activity’ without offering any evidence to reinforce that accusation or a chance to defend ourselves. As a result of Tourism’s decision, we will be forced to eliminate the positions of close to 300 employees who have worked hard to make these new restaurants successful. We are heartbroken for these employees, and we will continue to defend the quality of our work against these unfair attacks on our business.”
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