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Oklahoma attorney general drops governor's refiling of 'meritless' ClassWallet lawsuit

Kevin Stitt (center) makes his way past an applauding Attorney General Gentner Drummond (right) at the 2023 State of the State Address.
Legislative Service Bureau
Kevin Stitt (center) makes his way past an applauding Attorney General Gentner Drummond (right) at the 2023 State of the State Address.

Oklahoma Attorney General Gentner Drummond dismissed a lawsuit Monday filed last month by Gov. Kevin Stitt against a Florida vendor involved in a pandemic relief program that resulted in the sizable misspending of federal funds.

An investigation in May 2022 by nonprofit news outlets Oklahoma Watch and The Frontier initially revealed hundreds of thousands of dollars misspent on items like Christmas trees and power washers through the GEER-funded Bridge the Gap Digital Wallet program, which was supposed to get virtual learning resources to low-income families. A state audit later found $1.8 million in questionable expenditures.

Those expenditures were given the go-ahead with written “blanket approval” from Ryan Walters, who served as the CEO of Every Kid Counts Oklahoma — the nonprofit that oversaw the program. Walters went on to serve as the Secretary of Education and now serves as the State Superintendent.

Former Oklahoma Attorney General John O’Connor filed suit against the Florida company that disbursed the funds, ClassWallet. But Drummond dismissed it when he took over, saying it was “almost wholly without merit,” and the fault of “state actors” — not the company.

The Tulsa World reported this weekend Stitt requested Drummond refile the suit last month, which he declined to do and instead pointed blame at Walters and the Stitt administration.

“While factual reasons are detailed below to further evidence why your notion is poorly conceived, I can summarize it by quoting two words from your former Secretary of Education [Walters], whose faulty judgment resulted in millions of misspent funds: ‘blanket approval,’” Drummond wrote in the Jan. 23 response to Stitt’s request.

In the response, Drummond lists audit findings from the U.S. Department of Education’s Office of Inspector General and from State Auditor Cindy Byrd that detail a lack of internal controls or oversight by the state.

“Somehow, after hundreds of pages of audits detailing your administration’s mishandling of federal funds … you now assert that it is a ‘legitimate case’ and should be refiled,” Drummond wrote in the response. “You summarily assert that ClassWallet is culpable because it guaranteed the funds would not be fraudulently expended, and it breached several terms of the contract. Crucially, you entirely omit any of the litany of errors committed by your administration.”

Drummond warned Stitt in the response that if Stitt refiled the suit, Drummond’s office would take control of the case, which it did and announced in a Monday press release. Drummond dismissed the refiling and reiterated points from his previous response letter.

“The overwhelming evidence shows no oversight and no control measures and suggests that no one in your administration tried to shut off the spigot of these improper expenditures,” Drummond said in the response letter and repeated in the release.

Refiling the lawsuit, Drummond said in his entry of appearance, would have left the state open to “paying hundreds of thousands in defendant’s attorney fees.”

“As the guardian of the State’s interests,” Drummond said in the filing and repeated in the release, “I will not sit idly by while taxpayer funds are threatened by frivolous suits for political cover.”

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Beth Wallis is StateImpact Oklahoma's education reporter.
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