The Frontier: Swadley’s Foggy Bottom Kitchen sometimes charged extra fees as part of a costly restaurant overhaul at state parks | News

Swadley’s Foggy Bottom Kitchen spared no expense when it launched an ambitious plan to remodel restaurants at Oklahoma state parks in 2020.

The Oklahoma City-based restaurant company billed the Oklahoma Tourism and Recreation Department $12,433 for a vintage 1956 camper to display at the Sequoyah State Park restaurant near Hulbert. Another $119,440 went to build an elaborate fake mine shaft and cover other construction costs at Robbers Cave State Park near Wilburton. 

Foggy Bottom also charged the Tourism Department $48,000 to paint murals and build a faux cave entryway at the Robbers Cave restaurant and raised a 12-foot tall illuminated sign bearing the Swadley’s name. The restaurant company commissioned features like a waterfall and a lazy river at some of the restaurants. Decorative upside-down canoes hung from dining room rafters.  

Cost for the Foggy Bottom restaurants soon ballooned to $16.7 million, as the state paid the company management fees, covered its financial losses, and reimbursed for construction expenses and kitchen equipment, according to a report from the Oklahoma Legislative Office of Fiscal Transparency.

Foggy Bottom also charged extra fees on top of some expenses it billed to the state, according to invoices the Tourism Department provided to The Frontier. 

The Frontier found $546,890 in additional management and consulting fees that Swadley’s Foggy Bottom charged the Tourism Department on invoices for equipment and renovation costs between May and August 2021. 

Those fees were in addition to monthly restaurant management fees outlined in the Swadley’s Foggy Bottom Kitchen contract with the Tourism Department. The contract authorized the company to oversee restaurant renovations, purchase equipment and hire subcontractors at the state’s expense but make no mention of these additional fees. 

Beginning in mid-2021, many invoices show that Foggy Bottom charged the Tourism Department consulting and management fees ranging from 5% to 20% on top of some construction and equipment expenses. On some invoices, the restaurant company billed the state for both a management and a consulting fee for up to a 30% markup. 

Foggy Bottom restaurants owner Brent Swadley declined to answer written questions from The Frontier about fees and other expenses the company billed to the Tourism Department. Swadley directed all questions to his attorney, who did not return a phone call to his office on Thursday. 

On Wednesday, Swadley told the news outlet NonDoc “That’s just standard stuff. We charge for our services.”

David White, a spokesman for the Tourism Department, said the agency couldn’t answer The Frontier’s questions about Foggy Bottom’s billing practices or the terms of the company’s contract with the state because of “ongoing internal and external investigations.” 

The Tourism Department has invested in updating the state parks system over the past two years after “decades of deferred maintenance due to underfunding,” White said in an email. 

“We respect the Legislature’s important agency oversight role and look forward to working together to continue improving the state park system,” he wrote. 

Some of the invoices from Foggy Bottom submitted to the state also didn’t include detailed product descriptions or model numbers for kitchen equipment the company purchased for restaurants. For invoices that did include more detailed information, The Frontier was able to find some items priced for significantly less. 

In August 2021, Foggy Bottom billed the Tourism Department for two barbecue smoker pits from the Oklahoma City-based company Quality Food Equipment, priced at $51,346 each. The Frontier found the same model of smoker at another restaurant supply company priced at $29,570. The Frontier also reached out to the Missouri-based manufacturer of the smoker, Ole Hickory Pits. A representative said the same model of a smoker costs $22,700 ordered directly from the manufacturer, plus shipping costs. 

Quality Food Equipment owner Mike McWhorter declined to comment.

Foggy Bottom Kitchen billed the Department of Tourism $107,442 for the two smokers and other related equipment and installation, plus a 15% management fee of $16,116. 

The Tourism Department stopped paying Foggy Bottom’s invoices after August 2021 and is now conducting an internal audit of items the restaurant company billed to the agency. 

Tourism officials told a legislative oversight committee in March that teams are visiting each Foggy Bottom restaurant to audit all of the equipment the company purchased.

Lt. Gov. Matt Pinnell, who acts as the state’s Secretary of Tourism, declined to comment through a spokesperson.

Lawmakers have questioned some of the Foggy Bottom project costs, and a criminal investigation is also now underway. 

At the oversight hearing, Rep. Ryan Martinez, R-Edmond, asked how Foggy Bottom selected subcontractors and vendors and whether the Tourism Department verified costs before it paid invoices. He also questioned the terms of the restaurant company’s contract with the Tourism Department. The agency agreed to cover $2.1 million of Foggy Bottom’s financial losses for the 2021 fiscal year.

“​​This is a pretty sweetheart deal. if I can operate a business and be guaranteed that my losses would be covered, that’s pretty tempting,” Martinez said. 

Other lawmakers asked how such a contract ever got signed.

Jerry Winchester, executive director of the Tourism Department, told lawmakers at the hearing that he approved the Foggy Bottom contract and that he and agency staff reviewed the scope of renovations at state park restaurants. 

The Oklahoma Tourism and Recreation Commission once had the authority to approve contracts, but legislation that Rep. Mark Lepak, R-Claremore, sponsored in 2018 stripped the board’s powers.  

Lepak sponsored the legislation as part of an effort to take decision-making authority away from disparate state boards and consolidate power under agency leaders appointed by the governor. Then-Gov. Mary Fallin signed the bill near the end of her second term.

Sen. Julia Kirt, D-Oklahoma City, believes the shift in power has led to less transparency and oversight of government spending.

“We have to create an environment that leads to accountability and open information,” she said. “So if there is a fundamental problem with something not seeming appropriate for public funds, to me that is a problem with our systems.” 

But Lepak believes if any wrongdoing has occurred in the Foggy Bottom affair, the people in charge of the agency bear responsibility, he said in an interview with The Frontier. 

“If there really truly is some kind of misdeed that has occurred, that’s about people, not process,” he said. 

After the legislative oversight hearing, a spokeswoman for the Oklahoma State Bureau of Investigation said the agency was looking into “allegations of potential criminal conduct between the state of Oklahoma and Swadley’s.” That investigation is still open and ongoing, an OSBI official said this week. 

Rep. Jim Grego, R-Wilburton, vice chairman of the House Tourism Committee, said he hopes the criminal investigation won’t damage people’s faith in state government and hurt the image of state parks. Tourism is one of rural Oklahoma’s most vital emerging industries, he said. 

“As oil and gas leave and agriculture is moving to bigger operations in other parts of the country, we still have a lot to offer in the area of tourism,” Grego said. “I don’t think it will deter people from coming to see what we have.”