Attorney General Gentner Drummond’s office announced Tuesday it would drop a civil lawsuit against Florida tech company ClassWallet, saying state actors — rather than the company — were responsible for mismanaging federal pandemic relief dollars.
The suit had beenfiled by previous Attorney General John O’Connor in the wake of news that millions in federal funds had been spent with little government oversight.
The Governor’s Emergency Education Relief Fund, or GEER, was a federal program that gave states millions of dollars to help students’ families recover from the pandemic by aiding with educational expenses. Oklahoma gave Florida-based company ClassWallet a no-bid contract to manage the program, Bridge the Gap Digital Wallet.
But aninvestigation byOklahoma WatchandThe Frontier found at least half a million dollars of federal funds went to all kinds of questionable expenses, like Christmas trees, smart watches and nearly 550 TVs.
ClassWallet said the blame for lack of oversight in the program was on the state. That didn’t stop former Oklahoma Attorney General John O’Connor from filing suit against the Florida tech company. Though, in the following five months, O’Connor has never served the company with the lawsuit.
Drummond said in a Tuesday press release O’Connor’s suit was “almost wholly without merit,” and he’s instead turning his office’s focus to holding state officials accountable.
“It is clear that a number of state actors and other individuals are ultimately responsible for millions in misspent federal relief dollars,” Drummond said in a press release Tuesday.
The state placed no limits on what families could purchase, and Education Secretary (and now-State Superintendent) Ryan Walters blanket-approved the purchases.
“We’re getting a few questions about eligible items,” a ClassWallet employee wrote to Walters in an email when the program went live, according to records obtained byOklahoma WatchandThe Frontier. “It’s my understanding that all purchases through any of our vendors [are] allowed… is there a blanket approval for items so long as they are purchased with the vendors on our platform?”
According to the outlets, Walters responded with, “Blanket approval with vendors on your platform.”
ClassWallet was championed by Walters, whoworked to secure the state’s contract with the company even before being appointed Education Secretary by Gov. Stitt.
At the time, Walters served as executive director for Every Kid Counts Oklahoma — the organization Gov. Stitt said would manage the program. Butnone of the relief money went through Walters’ organization before it was given to parents to spend through ClassWallet.
Walters has since stepped down from Every Kid Counts Oklahoma amid concerns of a conflict of interest with his position as state superintendent.
Ascathing federal audit also found ClassWallet’s contract with Oklahoma allowed the state to review reports and purchase summaries, but that information was only accessed once, a month after the program ended.
In early January,The Oklahomanreported Drummond had been considering dropping the lawsuit if he believed state officials, instead of ClassWallet, were at fault. But according to Drummond’s office, the lack of a lawsuit doesn’t mean the GEER saga is ending anytime soon.
“While the lawsuit has been dismissed, this matter is far from concluded,” Drummond said in the release. “My office will continue engaging with various state and federal agencies to investigate this egregious misuse of tax dollars.”
The release also said State Auditor and Inspector Cindy Byrd is expected to address Oklahoma’s handling of GEER funds during the State of Oklahoma Single Audit — an annual review of expended federal funds by the state for the fiscal year, generally submitted between March and July.
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