AG looking at state officials in his investigation of pandemic relief funds

Oklahoma Attorney General Gentner Drummond believes "state actors" are to blame for the misspending of federal pandemic relief funds, not the Florida company Gov. Kevin Stitt accused of fraud last year.

On Tuesday, Drummond's office announced it was dropping a state lawsuit against Kleo Inc., the Florida-based vendor Stitt hired to help disburse $31 million in federal funds.

“After a thorough review of this matter, I have concluded that the lawsuit filed by the previous Attorney General is almost wholly without merit,” Drummond said Tuesday in an emailed statement. “It is clear that a number of state actors and other individuals are ultimately responsible for millions in misspent federal relief dollars.”

In 2020, Stitt used federal Governor’s Emergency Educational Relief (GEER) funds to help low-income families purchase education materials while school buildings were closed due to high COVID-19 cases.

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But media reports and a federal audit found some of the money was spent on noneducational purchases, including smartwatches, doorbells, furniture and air conditioners.

Despite a U.S. Department of Education audit accusing the state of failing to follow federal regulations, and noting that state schools Superintendent Ryan Walters approved the purchases, Stitt blamed Kleo Inc. and sued the company for fraud.

Former Attorney General John O’Connor, who was appointed by Stitt, filed the lawsuit but took no further action.

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After beating O’Connor in last year’s election, Drummond said he planned to investigate the pandemic relief funds program and implied the lawsuit may have been a way to divert attention away from Stitt and Walters.

"If the vendor didn't do anything wrong, you can anticipate we will dismiss the lawsuit,” Drummond said earlier this month.

On Tuesday, Drummond dropped the lawsuit but said the investigation is ongoing.

“While the lawsuit has been dismissed, this matter is far from concluded,” Drummond said. “My office will continue engaging with various state and federal agencies to investigate this egregious misuse of tax dollars.”

Drummond's office also said it expects the state auditor to address the state's use of GEER funds in an audit later this year.

Stitt decried Drummond's decision to drop the lawsuit.

“The governor’s office strongly disagrees with the decision to dismiss the state’s legitimate effort to recover federal taxpayer dollars from a bad out-of-state vendor," a spokesperson for Stitt said on Tuesday.

Walters' office did not respond to a request for comment.

"ClassWallet is gratified that Oklahoma Attorney General Gentner Drummond decided to dismiss the State’s lawsuit against the company," Kleo Inc., which operates as ClassWallet, said in an emailed statement to The Oklahoman.

This article originally appeared on Oklahoman: AG Gentner Drummond looking at state officials in pandemic misspending