Attorney general faults Stitt, Walters for misspent COVID-19 education funds

Stitt wound up getting a private attorney to refile the suit.

In late January, Stitt announced that he had ordered the new lawsuit against Kleo Inc., the parent company of the Florida vendor ClassWallet, which the state had hired to disburse federal funds from the pandemic-era Governor’s Emergency Educational Relief program. The program allowed qualifying families to purchase items needed for at-home education during COVID-19-related school closures.

The lawsuit was filed by private attorney Cheryl Plaxico after Drummond declined Stitt’s Jan. 12 request for Drummond to refile litigation against ClassWallet in the interest of “zealous advocacy.”

In correspondence that the Tulsa World obtained through a public records request, Drummond on Jan. 23 blasted the plan to sue ClassWallet again as “meritless,” a “futile exercise in poor judgment,” and a “frivolous and an assured drain of taxpayer resources.”

Further, Drummond has warned Stitt’s office that he may use his authority to take control of the case.

Drummond did that before, taking over a previous ClassWallet lawsuit filed in 2022 and dismissing it shortly after he took office in January 2023. At that time, Drummond described the first suit as “almost wholly without merit. It is clear that a number of state actors and other individuals are ultimately responsible for millions in misspent federal relief dollars.”

The issue, Drummond contends in his recent correspondence with Stitt, is that the State of Oklahoma “allowed individuals employed by outside entities and special interest groups to administer the (GEER-funded) programs, largely without any oversight from the State. These individuals did not have the appropriate experience to administer these federal funds.”

Among those individuals, Drummond name-checked only Ryan Walters, who at the time was employed as CEO of the nonprofit Every Kid Counts Oklahoma. It oversaw a GEER program that offered families individual grants of up to $1,500 intended for the purchase of curriculum content, tutoring services and technology for educational purposes.

The Every Kid Counts Oklahoma organization has since rebranded itself as Oklahoma Parents for Student Achievement, and Walters became Stitt’s secretary of education and was later elected state superintendent.

Drummond cited emails that showed ClassWallet had asked Walters whether its platform should place restrictions on parents’ purchases and two words in particular in Walters’ response, directing ClassWallet to give parents “blanket approval” for all purchases.

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

Initial sampling of the program by federal auditors found more than 10% of $6.1 million of the expenditures were improper, including such non-educational items as video game consoles, home appliances and Christmas trees, and those auditors recommended that the state should repay the federal government for all questionable expenditures.

Subsequently, a more exhaustive audit report by State Auditor and Inspector Cindy Byrd identified more than $1.83 million in questioned expenditures in that program, as well as $6.5 million in questioned expenditures in a $10 million GEER-funded program intended for low-income families with students attending private schools, called Stay in School.

Stitt and Walters have repeatedly blamed ClassWallet. In his Jan. 12 letter requesting that Drummond pursue litigation on behalf of the state, Stitt accused the vendor of breach of contract and said ClassWallet’s system “was not supposed to allow purchases other than for educational resources.”

In a footnote, the letter from Stitt states: “ClassWallet contends it was advised to turn off controls, thereby allowing expenditures for purposes unrelated to education. Of course, for ClassWallet to have followed through on any such instruction, the contracting parties would have had to amend the contract according to its terms. That did not occur, and ClassWallet was never relieved of its contractual duties.”

Stitt’s letter to Drummond was stamped at the bottom “Privileged and Confidential Attorney-Client Communication.” But Drummond responded by disputing that any such relationship exists in this case because Stitt was seeking a new lawsuit filed on behalf of the State of Oklahoma, not the governor, and the governor was not a named plaintiff in the first lawsuit filed.

Additionally, he branded the correspondence as merely an “unsolicited letter” rather than private consultation between attorney and client, pointing out that Stitt has blocked Drummond’s attempt to represent Stitt’s office in a 2020 federal lawsuit filed by the Cherokee, Choctaw, Chickasaw and Citizen Potawatomi nations, seeking to invalidate gaming compacts Stitt signed with four other tribes. Stitt hired outside counsel to represent the state, and the matter remains unresolved.

“As you recently stated in a pleading in federal court, my office’s representation of your office results in you having ‘counsel he (the governor) affirmatively does not want,’” Drummond wrote to Stitt. “I take you at your word as the Governor of the State of Oklahoma: you affirmatively do not want this office as your legal counsel.”

One week later, the Office of Management and Enterprise Services, which is overseen by the governor, filed suit in Oklahoma County District Court. Representing OMES is Plaxico, former spouse of Oklahoma’s former Attorney General Mike Hunter.

World staff writer Randy Krehbiel contributed to this story.