Drummond assumes control, dismisses meritless lawsuit against ClassWallet

Attorney General Gentner Drummond today filed an entry of appearance and assumed control of a State lawsuit that Gov. Kevin Stitt has pursued against a company that the Governor has incorrectly blamed for the misuse of hundreds of thousands of dollars in education relief funds. Drummond also dismissed the litigation. 

“I have been clear and consistent in communicating with the Governor on this matter,” said Drummond. “I will not allow taxpayer funds and State resources to be wasted in pursuit of this meritless lawsuit.”

The Attorney General, who last year dismissed a similar lawsuit brought against the same vendor, has long maintained that state actors, not Florida-based ClassWallet, are responsible for the misspent federal relief dollars intended to help families with educational expenditures during the pandemic.

Last month, Drummond denied Gov. Stitt’s request to refile the suit, noting that it would be a “futile exercise in poor judgement” given that state officials failed to use the controls available to them to manage the funds.

An audit by the U.S. Department of Education Office of Inspector General (OIG) found questionable expenditures and processes surrounding $31 million in Governor’s Education Emergency Relief (GEER) funds. A separate audit from State Auditor and Inspector Cindy Byrd confirmed the deep concerns regarding state actors’ lack of oversight and responsibility for these funds. Auditor Byrd’s report identifies 39,634 items, including video game consoles, home appliances, furniture, and Christmas trees, totaling $1,707,377, that were improperly purchased and did not have an educational purpose. 

In a response letter to the Governor, Drummond said these findings would undermine any lawsuit against ClassWallet because the State rejected internal controls and oversight, failed to use ClassWallet’s available controls, and failed to develop any written monitoring policies and procedures. 

“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 wrote in the Jan. 12 letter. 

In his entry of appearance, Drummond said the lawsuit leaves the State open to paying hundreds of thousands in defendant’s attorney fees.

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

In August 2022, then-Attorney General John O’Connor, a Gov. Stitt appointee, filed an initial lawsuit against ClassWallet claiming the company was culpable for the misspent money. That litigation sat idle for 179 days — one day shy of the maximum permitted before a case is dismissed for lack of service — before being dismissed by Drummond during his first month in office.

The letters from Gov. Stitt to the Attorney General and the letter in response are available here and here. The filings can be read here and here.

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