OKLAHOMA CITY (KFOR) – Controversy continues to swirl around a popular BBQ chain and the State Department of Tourism.

Early last week, KFOR gathered details about a criminal investigation that has been requested to look at the $13 million the State had paid Swadley’s Bar-B-Q to manage restaurants at certain state park.

Now, the State is canceling their contract with the chain altogether.

A special look into the tourism department by the Legislative Office of Fiscal Transparency raised serious questions about contracts between Swadley’s and the State.

An investigation and audit has been called for by the Oklahoma County District Attorney.

Lawmakers are looking for answers from Swadley’s and Tourism officials.

“I want to know how does the State keep cutting checks for invoices without going through the proper safeguards to make sure the state is getting what it pays for,” said Rep. Ryan Martinez, R-Edmond.

On Monday, the State Department of Tourism cancelled their contract to run Foggy Bottom Kitchens within Oklahoma State Parks, “due to suspected fraudulent activity found through highly questionable billing, invoicing, and record keeping practices which the Department has been investigating for the past several months.”

The department of Tourism says its effective immediately, even covering up signs at a Foggy Bottom location at Lake Murray.

Tourism officials declined our requests for interviews, but issued a statement saying,

“The Oklahoma Tourism & Recreation Department today canceled the lease concession agreement with Swadley’s Foggy Bottom Kitchen due to suspected fraudulent activity and questionable business practices. 

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 Tourism & Recreation Department

KFOR went to Swadley’s northwest Oklahoma City headquarters for answers.

They told us, “Yeah we don’t know. We really don’t know why it’s happening. We are in here trying to figure everything out ourselves. We are dumbfounded by this. We are shocked.”

Swadley’s officially declined our requests for a formal interview, but put out a statement late Monday afternoon saying,

“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.”

Swadley’s Bar-B-Q

The OSBI confirms their investigation has begun into alleged criminal activity in this case.

Oklahoma Attorney General, John O’Connor also issued a statement on the matter.

“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 the Foggy Bottom contract with the State of Oklahoma.”

Some State Lawmakers say it’s on Oklahoma officials to be better about the contracts they enter into.

“We are not a private restaurant. We are a public entity, so every dollar spent, we have to answer to the taxpayers for. There was a lot of money spent directly to the Swadley’s entity, I want to know what’s going to happen to that money,” said Senator Julia Kirt, D-Oklahoma City.

Tourism said in their letter to Swadley’s that no further money will be released until the department has “true accounting.”

The State Department of Tourism says they expect the audit to find “unearned funds were improperly paid to FBK.”

They also go on to say that they are  “exploring options to recover any taxpayer dollars.”

Some lawmakers are calling for answers from tourism officials themselves.

“Who thought that it was a good idea on behalf of the state to get into a contract like that to start with?” said Martinez.

This past weekend, Swadley’s Bar-B-Q released a statement on Facebook, saying that, “Every aspect of the Foggy Bottom Kitchen project has been directed and approved by state officials. We stand by our team and all that we have done to benefit the people of our beautiful state.”