I usually feel like readers aren’t that interested in the back story of a story we write. This is not one of those times.
Late Saturday, we posted a story by Kassie McClung updating readers on a new version of a lawsuit that had been filed Dec. 16 against City Councilor Blake Ewing.
I asked her to write it after learning that Ewing’s business partners in The Max Retropub had filed a new version of their civil suit against him, which alleges he committed fraud in transferring more than $300,000 out of The Max to an entity he controls. The money went to fund his other businesses and for various personal expenses, according to the investors’ lawsuit.
The suit was filed by attorney Mark Perkins, who ran for mayor of Tulsa as an independent candidate in 2009. Several other investors joined the suit after it was filed.
The suit accuses Ewing of “massive acts of malfeasance and misappropriation” by using funds generated by The Max to pay expenses at his other businesses — Joe Momma’s Pizza, The Fur Shop and The Phoenix — through a company called The Engine Room LLC. Some payments to Joe Momma’s Pizza occurred after the restaurant was closed due to a fire last year, the suit alleges.
The allegation that Ewing transferred money from one business to another isn’t new. A former business partner in a failed downtown grocery store alleged in an earlier lawsuit that Ewing shifted money intended for the grocery store to his other businesses to stay afloat.
Investors in another business (Joe Momma’s Pizza) repeatedly asked Ewing for financial accountability and questioned what happened to insurance proceeds after a fire there last year, according to emails obtained by The Frontier.
The Max lawsuit contains serious allegations about a sitting city official and without question was newsworthy in October after we and most other media outlets wrote about it. Kevin Canfield also wrote a story in which people including Mayor G.T. Bynum and City Councilor Anna America lauded Ewing’s vision and commitment to improving the city, especially its downtown.
What made the lawsuit newsworthy in the first place was the bigger picture.
An investigation by The Frontier and our media partner NewsOn6 in October found that Ewing borrowed heavily to open multiple businesses at the same time, clashed with investors seeking financial information and his businesses failed to pay state sales and beverage taxes already collected.
The state has cited Ewing and his businesses for failure to pay state sales and beverage taxes in at least 19 separate tax liens filed since 2010, records show. The liens sought payment of about $168,000 in taxes already collected by five of Ewing’s businesses but not paid to the state as required by law.
So what made the amended lawsuit newsworthy this week? Ewing’s own statements.
After our initial story, Ewing took to Facebook to protest, claiming that he had tried to work things out with his investors but they wouldn’t meet with him to examine the business’s books.
“They have refused to review the company’s books or to meet to discuss their concerns, instead basing their claims on conspiracy theories derived from incomplete financial information,” Ewing said in the Oct. 14 Facebook post.
But in the latest version of the lawsuit, his business partners in the 80s-themed bar directly contradict that claim. Their new petition says that as of Dec. 16, months later, Ewing is still refusing to give them access to financial records of the business as he agreed he would when they invested.
So either Ewing is making false statements in a public forum — by claiming the investors have “refused to review the company’s books” — or his investors (one of them an attorney who ran for mayor) filed a lawsuit with new allegations about him that are false.
In our estimation, this is news either way. It’s not a huge story but a relevant update to a story some of our readers have followed closely and urged us to continue reporting on.
Would it be news if Ewing were a private citizen? Probably not. When you hold public office, this kind of scrutiny comes with the territory and we won’t apologize for it.
As a Tulsa city councilor, Ewing is responsible for oversight of millions of dollars of your tax money. If his own partners in three businesses allege he isn’t honest with them, how can taxpayers be confident he’s being honest with them?
This is a fair question and it’s up to those who read the stories to determine whether the investors’ claims are relevant and if so, to what degree.
Before we posted the story, Kassie tried to reach Ewing’s attorney, who was out of town and not immediately available.
I searched court records for an answer to the lawsuit filed by Ewing’s attorney but found none. We did include his October Facebook post in the story, in which he vehemently denies the allegations and explains his position.
After the story was posted, Ewing reached out to us and asked us to remove the story from our website. The lawsuit, he claimed, had been settled. While Ewing may believe the dispute has been settled, nothing to that effect has been filed in court and the lawsuit remains pending to this day.
We added his claim that the suit has been settled to our story and refused to remove the story from our site. (When a lawsuit is settled and dismissed, that is reflected on the court’s docket which it isn’t in this case.)
We contacted Perkins to determine whether an agreement to settle the suit had been reached and here’s what he had to say: “We signed a settlement agreement that contained several conditions, which, when fulfilled, would result in a dismissal of the lawsuit. If and when they are fulfilled, the plaintiffs will dismiss the lawsuit without prejudice and the parties can issue a statement at that time.”
Signing a conditional agreement to settle a suit is not the same thing as dismissing the lawsuit following a successful settlement. In fact, a lawsuit by his business partners in a failed downtown grocery store alleges he reneged on an agreement to repay money the partners claim he funneled to his other businesses.
I informed Councilor Ewing that the plaintiff did not agree that the lawsuit had been settled. Nevertheless, I received numerous angry texts from Ewing Saturday night, including mocking The Frontier’s decision to move to a nonprofit model and calling me “pathetic” and “shameful.”
Since he said that I should share them with readers, feel free to read them here. (At his request, we removed his cell phone number.)
Did I handle the situation perfectly? Probably not. But I tried to be responsive while not accepting bullying language from a councilor who, according to numerous people I’ve spoken to in the past, has been known to engage in bullying behavior.
We sincerely wish Councilor Ewing the best as he continues the important business of making decisions and looking out for this city we all love.
Nobody questions his devotion to Tulsa and his advocacy for downtown has been an important contributor to its rebirth. He’s certainly not the first person to fail at starting a business or to have public disagreements with investors.
The businesses that he started were quite popular and Ewing clearly has a knack for entrepreneurship. We hope he continues starting and operating businesses in Tulsa.
We will certainly report the outcome of this lawsuit, whether it is dismissed or not. We’ve invited Ewing to sit down for an interview with us in the past and he has refused but we want to make it clear: That offer remains.