Associated Press Writer

OKLAHOMA CITY (AP) — A lucrative deal that allowed an Oklahoma barbecue restaurateur to have the state subsidize more than $2 million in operational losses at new state park restaurants is being terminated due to “suspected fraudulent activity," the state's tourism department said Monday.

“We are continuing to cooperate with investigators and auditors to determine the extent to which unlawful behavior has been perpetuated against the state," the agency said in a press release.

“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."

The multimillion-dollar contract between the Oklahoma Tourism and Recreation Department and Swadley's Bar-B-Q to renovate and rebrand restaurants at state parks has come under increased scrutiny from lawmakers and investigators in recent weeks. Oklahoma County District Attorney David Prater, who already requested a state investigation into the deal, asked earlier this month for a forensic audit of “allegations of potential criminal conduct."

Prater declined to discuss the matter Monday, citing the ongoing probe, but in an April 14 letter to Auditor & Inspector Cindy Byrd obtained by TV station KFOR, he wrote: “The alleged conduct has resulted in at least $4.5 million in excessive payments to Swadley's by the State of Oklahoma. I have reviewed the complaint and have concluded that a criminal investigation should be conducted."

Messages left Monday for Brent Swadley, the owner of Swadley’s Bar-B-Q, seeking comment on the termination of the contract were not immediately returned, but the company posted a statement on Facebook, saying, in part:

"From the beginning, 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."

Swadley's Foggy Bottom Kitchen restaurants had been opened at six state parks, including Lake Murray near Ardmore and Beavers Bend near Broken Bow.

The executive director of the Oklahoma Tourism and Recreation Department, Jerry Winchester, defended the exclusive deal with Swadley's during a legislative hearing last month, The Oklahoman reported.

“We have seen an immense number of improvements," Winchester told lawmakers at the time.

Winchester also told lawmakers that Swadley's was the only restaurant to submit a bid for the project.

Winchester, a longtime oil and gas industry executive, was appointed to head the agency by Gov. Kevin Stitt in 2019.

A review of invoices by the nonprofit journalism outlet The Frontier showed Swadley's charged extra fees on top of some expenses, including $546,890 in additional management and consulting fees on invoices for equipment and renovation costs between May and August.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.