OKLAHOMA CITY (KFOR) — Controversy continues to swirl around a popular barbecue chain and the state Department of Tourism.
Early last week, KFOR gathered details of a criminal investigation that was requested to look into $13 million the state paid Swadley’s Bar-BQ to run restaurants in some state parks.
Now the state is completely canceling its contract with the channel.
A special review of the Department of Tourism by the Legislative Office of Fiscal Transparency has raised serious questions about contracts between Swadley’s and the state.
An investigation and audit have been requested by the Oklahoma County District Attorney.
Lawmakers are awaiting answers from Swadley and tourism officials.
“I want to know how the state continues to cut checks for bills without going through the proper safeguards to make sure the state gets what it pays for,” said Rep. Ryan Martinez, R-Edmond.
On Monday, the state Department of Tourism canceled its contract to operate Foggy Bottom Kitchens in Oklahoma state parks, “due to alleged fraudulent activity discovered through billing practices, billing and highly questionable record keeping that the department has been investigating for several months.”
The Department of Tourism says its effect is immediate, even covering signs at a location from Foggy Bottom to Lake Murray.
Tourism officials declined our interview requests, but released a statement saying:
“The Oklahoma Department of Tourism and Recreation today canceled the lease agreement with Swadley’s Foggy Bottom Kitchen due to alleged fraudulent activity and questionable business practices.
In early fall 2021, the ministry launched an internal investigation after reports of financial irregularities came to our attention. Financial payments for construction costs were immediately halted in September, while management fees were suspended in December. After careful consideration, it has become clear that pursuing the deal with Foggy Bottom Kitchen is not in the best interests of Oklahoma taxpayers.
Although the transition will not be easy, our first duty is to protect taxpayers’ money. Oklahoma State Parks staff contacts all existing reservations to ensure all catering needs are met. Department staff are also working with local small businesses to find creative solutions to meet park guest demands until new restoration operations can begin at the newly renovated facilities. Under the agreement, all improvements made to restaurants in the state park by Swadley’s remain the property of the State of Oklahoma.
Termination of the agreement is the first step of the ministry. We continue to cooperate with investigators and auditors to determine the extent to which illegal behavior has been perpetuated against the state.
The ministry is also exploring options to recover taxpayer money paid to the operator for services or items for which the ministry was charged but ultimately not provided. “
Oklahoma Department of Tourism and Recreation
KFOR traveled to headquarters in Swadley, northwest of Oklahoma City, for answers.
They said, “Yeah, we don’t know. We really don’t know why this is happening. We are here trying to figure it all out ourselves. We are stunned by this. We are shocked.
Swadley’s officially declined our official interview requests, but released a statement late Monday afternoon saying:
“Swadley’s Foggy Bottom Kitchen is alarmed and dismayed that the Oklahoma Department of Tourism and Recreation, 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 support this accusation or a chance to defend ourselves. Following the decision of Tourism, we will be forced to eliminate the positions of nearly 300 employees who have worked hard to make the success of these new restaurants. We We are heartbroken for these employees and will continue to defend the quality of our work against these unjust attacks on our company.
OBSI confirms that its investigation has begun into alleged criminal activity in this case.
Oklahoma Attorney General John O’Connor also released a statement about it.
“My office stands ready to assist District Attorney David Prater, the Oklahoma State Bureau of Investigation, and State Auditor Cindy Byrd as they investigate and audit Foggy Bottom’s contract with the Oklahoma State.”
Some state lawmakers say it’s up to Oklahoma officials to be better at the contracts they make.
“We are not a private restaurant. We are a public entity, so for every dollar spent, we must answer to taxpayers. There was a lot of money spent directly at the Swadley entity, I want to know what’s going to happen to that money,” said Sen. Julia Kirt, D-Oklahoma City.
Tourism said in its letter to Swadley’s that no further money will be released until the department has “real accounting”.
The state tourism department says it expects the audit to find that “unearned funds were improperly paid to FBK.”
They also go on to say that they are “exploring options to recover taxpayers’ money.”
Some lawmakers are demanding answers from tourism officials themselves.
“Who thought it was a good idea for the state to enter into a contract like this to begin with?” said Martinez.
Last weekend, Swadley’s Bar-BQ posted a statement on Facebook, saying, “Every aspect of the Foggy Bottom Kitchen project was directed and approved by state officials. We stand behind our team and all that we have done for the benefit of the people of our beautiful state.
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