The Oklahoma Tourism and Recreation Department this week canceled a state parks contract with Swadley’s Bar-B-Q — a regional chain with Route 66 roots — “due to suspected fraudulent activity and questionable business practices.”
The Oklahoma State Bureau of Investigation has been investigating the contract for several weeks. The local district attorney and state auditor have been involved in the probe, as well.
Oklahoma City-based Swadley’s launched its first restaurant along Route 66 in nearby Bethany, Oklahoma, and has another location along Route 66 in El Reno, Oklahoma.
Investigative reports indicate Swadley’s inflated reimbursement invoices to the tourism department. The overcharges are estimated to be north of $4 million. In all, the state has paid Swadley’s more than $16 million to renovate and operate six state-park properties.
A whistleblower who once worked for Swadley’s provided details and documentation to The Oklahoman newspaper about the alleged overcharges and excessive fees.
Questions also linger over how the tourism department chose Swadley’s for the state-parks concessions contract that guarantees coverage of operating losses — an unusual arrangement.
Oklahoma Tourism issued a statement Monday with the announcement it was canceling the contract:
In early fall 2021, the department initiated an internal investigation after reports of financial irregularities were brought to our attention. Financial payments for construction costs were immediately halted in September, while management fees were suspended in December. 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.
While the transition won’t be easy, our first duty is to safeguard taxpayer funds. Oklahoma State Parks staff are reaching out to all existing reservations to ensure any catering needs are fulfilled. Department staff are also working with local small businesses to find creative solutions to meet park guest demands until new restaurant operations can begin in the newly remodeled facilities. Per the agreement, all improvements made to state park restaurants by Swadley’s remain property of the State of Oklahoma.
Terminating the agreement is the department’s first step. We are continuing to cooperate with investigators and auditors to determine the extent to which unlawful behavior has been perpetuated against the state.
The department is also exploring options to recover any taxpayer dollars paid to the operator for services or items for which the department was invoiced but ultimately not provided.
Oklahoma Lt. Gov. Matt Pinnell, who also is Secretary of Tourism and a big proponent of Route 66 tourism since taking office, issued this statement on Facebook on Monday:
I agree with the Department of Tourism’s decision to end the contract. I fully support the continued audits of this contract and decision-making processes that proceeded it. Taxpayers deserve transparency, and I join them in demanding it.
Swadley’s Bar-B-Q issued a statement through a public relations firm after its contract was canceled:
“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.”
Having read several stories about the tourism department and Swadley’s, it’s apparent Tourism Department director Jerry Winchester and restaurant owner Brent Swadley might be in big trouble. The Oklahoman reports in today’s edition that numerous state lawmakers have called for Winchester’s resignation.
The Oklahoman recorded a couple of good podcasts about its series of stories about Swadley’s and the tourism department:
Oklahoman reporters promise more stories about Swadley’s in the coming days.
(Image of a Swadley’s Bar-B-Q restaurant via its Facebook page)
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