Updated: 6:20 p.m. April 25, 2022

The Oklahoma Tourism and Recreation Department is ending a contract with Swadley’s Foggy Bottom Kitchen, a department spokesperson confirmed Monday. 

Earlier this month, The Frontier reported Foggy Bottom inflated prices for some equipment and charged the state thousands of dollars in unapproved fees. 

“In early fall 2021, the department initiated an internal investigation after reports of financial irregularities were brought to our attention,” the department said in a statement. “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.”

Brent Swadley. Courtesy

The department notified Foggy Bottom owner Brent Swadley of the cancellation in a letter on Monday from executive director Jerry Winchester. The letter states the agency is canceling the contract due to “suspected fraudulent activity found through highly questionable billing, invoicing and record-keeping practices which the Department has been investigating for months.”

Foggy Bottom claims the Tourism Department canceled the contract without offering evidence to support allegations of fraud “or a chance to defend ourselves,” the company said in a statement issued Monday.

“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,” the statement said. “We are heartbroken for these employees, and we will continue to defend the quality of our work against these unfair attacks on our business.” 

Gov. Kevin Stitt said in a statement that he supported canceling the contract and that he would “continue to always protect the taxpayers and shine a light on any corruption or bad actors in state government.”

The Tourism Department also said in its letter that it will “fully cooperate and aid the investigations being conducted by the Oklahoma State Bureau of Investigation and the State Auditor” and is exploring options to “recover any and all taxpayer funds that were improperly paid” to Foggy Bottom. The restaurant company will be responsible for all costs moving forward, including unemployment claims and taxes, the letter said.

The contract cancellation comes after the restaurant company released a statement on Saturday placing blame on state officials.

“From the beginning, every aspect of the Foggy Bottom Kitchen project has been directed and approved by state officials,” the statement said.

The Tourism Department paid Foggy Bottom nearly $17 million for financial losses, management fees and capital improvements, according to a report from the Oklahoma Legislative Office of Fiscal Transparency.

The Oklahoma County District Attorney David Prater has asked the Oklahoma State Bureau of Investigation to open a criminal investigation into the Foggy Bottom contract. Prater has also asked State Auditor and Inspector Cindy Byrd to conduct a forensic audit.

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