The head of the Oklahoma Department of Tourism and Recreation has stepped down and the state has filed a lawsuit against the operator of Swadley’s Foggy Bottom Kitchen restaurants amid a growing scandal over questionable spending. 

Gov. Kevin Stitt, flanked by Lt. Gov. and Secretary of Tourism Matt Pinnell, announced the resignation of Tourism Director Jerry Winchester and the lawsuit during a brief media appearance at the Oklahoma Capitol on Friday. 

The Frontier first reported on Foggy Bottom’s contract with the state that reimbursed the restaurant company for its losses. One state lawmaker later called the arrangement a “sweetheart deal.” The Frontier also first reported Foggy Bottom charged the Tourism Department additional fees and inflated prices for restaurant equipment. 

The Tourism Department’s two-page lawsuit filed Friday afternoon in Oklahoma County District Court does not accuse Foggy Bottom of any financial wrongdoing, but claims the company did not honor a “duty and obligation” to let the state inspect its financial statements annually. 

“As a result of (Foggy Bottom) knowing, reckless and willful refusal to comply with its obligations and to provide an accounting, (the state) has been damaged,” the lawsuit claims. 

In a statement, the restaurant company said it was “proud of the work” it has done at state parks and is “heartbroken for the hundreds of employees whose livelihoods are directly impacted” by the abrupt closure of restaurants earlier this week. 

Stitt and Pinnell did not take questions following the announcement citing the ongoing investigations and litigation.

Stitt said Pinnell would be taking “an even more involved role in the Department of Tourism.”

“It’s important that we get to the bottom of this situation,” Stitt said. “(Pinnell) will make sure the agency is properly managed and is taking all the necessary steps to address immediate issues with vendors and staff.”

Winchester said in his resignation letter he felt it was “necessary to resign as executive director” of the Tourism Department immediately. 

“I am confident that the current audits will reveal that the department has been acting in the best interests of the state and we will fully cooperate to ensure a swift resolution,” he wrote.

Winchester did not return numerous requests for comment following the announcement.