As troubling details about the Oklahoma Tourism and Recreation Department’s now-terminated restaurant contract with Swadley’s Foggy Bottom Kitchen continue to ooze out like rendered fat from a brisket, leaders of the House of Representatives today announced the formation of a special investigative committee to hold hearings on the topic.
“It’s been four or five years since this happened last in the House, so that tells you the gravity of the situation,” House Appropriations and Budget Vice Chairman Ryan Martinez (R-Edmond) said. “The speaker and the House very much realize that it is our job to track down every single taxpayer dollar and find out exactly what happened and make sure that it never happens again.”
Martinez served on a similar House investigative committee that held held hearings in 2017 about the finances of the Oklahoma State Department of Health. At the time, lawmakers had been told that up to $30 million was missing or misplaced by the health agency, but a grand jury investigation ultimately concluded that the money was not missing. The 2018 grand jury report recommended a series of legislative changes related to the handling of public money, but lawmakers did not pursue the proposals in subsequent sessions.
“I think a lot came out of that. I think, one, transparency, and having conversations with people who are in an agency and answer why things might appear the way they are,” Martinez said of the 2017 hearings. “There were some dollars that were being tracked down that might have been missing and nobody was keeping their eye on. So we needed to find out where those dollars were and how they were spent, and I think that was accomplished. I think a lot of those financial accounting practices were dealt with in that agency, so I think that is what was accomplished.”
‘More politics at play here’
On Wednesday, Wayne Stafford of Fox 25 revealed an August 2020 report from the State Fire Marshall’s Office that indicated a series of code violations at the Swadley’s Roman Nose State Park restaurant and said none of the Swadley’s restaurants had obtained required permits.
SFMO agent Darryl Beebe reported an encounter with Brent Swadley, the barbecue company’s founder, on Aug. 20, 2020. From the report:
Mr. Swadley then proceeded to explain to agent Beebe that “this is bigger than you and there are more politics at play here than you could ever understand. Let me tell you what happened here and what got this thing going. Gov. Stitt reached out to me to put my restaurants in his state parks.” Mr. Swadley also explained that any documents that I submit to him will be forwarded to Gov. Stitt and that I will have to answer to Gov. Stitt on the matter.
The report said OTRD deputy director Gino DeMarco contacted Beebe and questioned how the restaurants could receive approval.
“Mr. DeMarco hinted that he knows that the laws of Oklahoma don’t really apply to the state of Oklahoma itself, and that they don’t have to permit, or submit plans to the state fire marshal by order of their general legal counsel,” the report states. “Mr. DeMarco then stated several times, ‘What are we really after here, are we really after code compliance, what will it take for this to be taken care of, and satisfy all parties, can we just have an inspector verify that the violations you noticed are correct and not worry about the plans?'”
The SFMO report can be viewed here.
Reached shortly after the publication of this article, DeMarco emphasized a portion of the report’s fourth page where he told Beebe about an April conversation he had had with the state fire marshal.
“We were certainly asking him and telling him, ‘Here’s what the fire marshal told us.’ And his reply to that was, ‘Well that was the old fire marshal, and we have a new fire marshal,'” DeMarco recalled. “We had, in fact, talked to the (old) state fire marshal about whether we needed to have permits or plans submitted to them for review. And his answer at the time was, ‘No.'”
DeMarco said he first met Swadley when the restauranteur catered meals for frack crews when DeMarco worked in the petroleum industry. Asked who would have contacted Swadley to suggest he take a look at the state park restaurants — which were largely in disrepair — DeMarco said it was not him.
“It wouldn’t have been the governor,” DeMarco said. “That probably would have been [Tourism director Jerry Winchester].”
DeMarco said describing Swadley as “a mover and a shaker” was accurate.
“He did get things done. He focused on the task. There are allegations that have been made against him,” DeMarco said. “I believe that there are audits under way to determine whether those are true or not, and I think it would probably be best just to let those play out and see. If he defrauded the state or cheated the state, then certainly he needs to be held accountable for that.”
DeMarco, who no longer works in state government but was appointed by the governor to the Oklahoma Health Care Authority board, said he has not been contacted by law enforcement regarding the Swadley’s contract.
‘My God, they had a burger named after him’
The House’s announcement of its special investigative committee comes as the Oklahoma State Bureau of Investigation and Oklahoma County District Attorney David Prater are conducting a criminal inquiry into the Swadley’s contract.
Martinez, who will chair the new committee, said he had not spoken with either Prater or the OSBI about the House’s plans.
“Our goal is not to interfere with them and stay away from their investigation and let them do their work,” he said. “But the Legislature has a responsibility as well, and that’s to appropriate dollars and protect taxpayer money, so our goal is to do just that and create some transparency. And, honestly, the end goal is the people of Oklahoma deserve to have faith in this agency, and I don’t think people can have faith in the Tourism agency with this cloud hanging over it.”
Earlier this week, Rep. Collin Walke (D-OKC) called for Tourism and Recreation Department executive director Jerry Winchester to resign or be removed by Gov. Kevin Stitt.
“What every taxpayer should want to see is accountability. Right?” Walke said. “It really befuddles me that executive director Jerry Winchester is still sitting in that chair acting as though this didn’t happen on his watch, as though this didn’t happen under Stitt’s administration, as though he wasn’t the one who approved these types of contracts. I mean, my God, they had a burger named after him. If his name isn’t written all over this corruption, I don’t know what is.”
Martinez said he is also “pretty surprised” that Winchester, a former petroleum executive, remains employed by the state agency.
“It’s very concerning to me, because I think there are a lot of things that seem very questionable and a lot of questions that need to be asked and answered,” Martinez said. “Whether or not executive director Winchester is still employed by the Department of Tourism, this committee will ask him to come, and we want to hear his side of the story and exactly what happened.”
Martinez said the current legislative session’s deadlines will likely prevent lawmakers from making policy changes about OTRD oversight. In 2018, legislators passed HB 3603 to change the Oklahoma Tourism and Recreation Commission from a governing body to an advisory body. That change put Winchester — hired by Stitt in April 2019 — solely in charge of contractual decisions.
On April 7, House Speaker Charles McCall (R-Atoka) told media that “there is always a conversation in our caucus about reevaluating how things are structured in government as a whole.”
“There are decisions that we make based on information we have in that period of time, and then going forward we have the opportunity to reevaluate whether or not those decisions met the level of effectiveness that we had hoped,” McCall said. “Or maybe we overlooked something.”
Martinez, however, said ongoing budget negotiations could be influenced by the Swadley’s investigation.
“This may and probably should affect dollars that are going to that specific agency. That is very much part of the budget negotiation right now and is being talked about often,” he said. “I don’t think anybody’s goal is to be punitive or make assumptions, so I’m not going to use term.”
Stitt released a statement shortly after Martinez concluded his press conference regarding the new House committee’s planned investigation.
“I have called for more audits than any other governor in state history and welcome the Legislature joining me to protect the taxpayers and shine a light on any kind of corruption or bad actors involved in state government,” Stitt said. “The state does business with more than 4,600 companies and I welcome a review of each one to provide maximum transparency for Oklahomans.”
Previously, Stitt had questioned whether turmoil about the Swadley’s contract had a connection to the 2022 electoral cycle. Martinez said politics are not factoring into the House committee’s planned hearings.
“Any suggestion that this is politically motivate is just wrong,” Martinez said. “The politics of this I don’t really care about. I care about taxpayers and I care about their money.”
Asked if Stitt himself could be called before the House committee, Martinez said it was possible. Lt. Gov. Matt Pinnell could also be a witness of interest, as he serves as Stitt’s Cabinet secretary of tourism and has advisory authority over the agency.
“We’re going to start digging into this, and we’re going to go wherever the evidence leads us, and if the evidence leads us there then we’re more than happy to have those questions answered. If it leads us down that path, we are happy to have that conversation,” Martinez said. “We’re looking at this whole entire situation. It’s this agency, it’s how money is moving out of government, where contracts come from, who was involved and why. We’re going to get to the bottom of how this money moved, who signed contracts, why it happened, where the oversight was and not only find out who did it but hold them accountable and make sure it never happens again.”
The new committee will have subpoena power, and Martinez noted that when a few Department of Health officials balked at the idea of testifying in 2017, subpoenas were drafted and the officials agreed to participate prior to receiving the subpoenas.
(Update: This article was updated at 1:55 p.m. Thursday, April 28, to clarify statements about and include comments from Gino DeMarco.)