ClassWallet Lawsuit Dismissed Amid Stitt-Drummond Feud

Jan 14, 2026, 2:45 AM

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The lawsuit at the center of a prolonged political feud between Oklahoma Governor Kevin Stitt and Attorney General Gentner Drummond has been dismissed as of January 13, 2026. This dismissal follows nearly three years of contentious legal and political maneuvering regarding the representation of the state's interests in court.

The case, filed in the Oklahoma City federal district court, involved allegations of mismanagement concerning approximately $1.7 million in federal education funds from a COVID-19 stimulus program. Stitt accused ClassWallet, a financial management vendor based in Florida, of failing to prevent the misuse of these pandemic-era funds. In contrast, Drummond contended that the mismanagement was primarily the fault of Stitt and his administration, not ClassWallet.

Drummond, who is currently running for governor, criticized the lawsuit as "baseless" and a "waste of taxpayer dollars." He asserted that there was overwhelming evidence indicating that Stitt's administration had rejected necessary internal controls and oversight, which contributed to the payout failures. US District Court Judge Joe Heaton supported this view, stating that Stitt's claims regarding ClassWallet's breach of contract lacked sufficient factual basis concerning the allowable payments under the grant program.

The origins of the lawsuit trace back to a US Department of Education audit that accused the state of failing to adhere to federal regulations, with former state schools Superintendent Ryan Walters approving the disputed purchases. The initial lawsuit was filed by former Attorney General John O'Connor, whom Stitt appointed in 2021, but after Drummond took office in January 2023, he expressed a belief that state actors should be held accountable for the financial mismanagement.

In a significant turn of events, Drummond announced the state's intention to drop the lawsuit against ClassWallet's parent company, Kleo Inc, which was involved in disbursing $31 million in federal funds. However, in January 2024, the Oklahoma Management and Enterprise Services (OMES) refiled the lawsuit, leading to further disputes between Stitt and Drummond. Drummond subsequently moved to dismiss the case with prejudice, preventing it from being refiled, a decision that Stitt criticized as politically motivated.

Despite the dismissal, it remains uncertain whether this will be the final resolution in the ongoing dispute, as Stitt has not indicated whether he will pursue additional legal options. The political rivalry between Stitt and Drummond continues to play a significant role in the narrative surrounding this case, reflecting broader tensions within Oklahoma's Republican leadership.

As the situation develops, the implications of this dismissal may extend beyond the courtroom, potentially influencing the political landscape in Oklahoma as both Stitt and Drummond prepare for future electoral contests.

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