Trial over Idaho negotiations to buy University of Phoenix opens in Boise
BOISE – Idaho State Board of Education members spent Monday defending their closed-door discussions of the University of Idaho–University of Phoenix megadeal during the first day of a trial seeking to unravel the agreement.
The Ada County district court trial represents one of the biggest obstacles to the $685 million Phoenix purchase – a deal that could provide Idaho with millions of dollars in new revenue, or jeopardize up to $10 million a year in tax money.
The case is thick with intraparty political tension: Attorney General Raúl Labrador filed the lawsuit against the eight-member board, which is tightly aligned with Gov. Brad Little.
At its heart, however, the civil case centers on the state’s open meetings law.
The board discussed the Phoenix purchase in three executive sessions last year, on March 22, April 25 and May 15.
The third and final closed-door meeting took place just three days before the State Board held its only public meeting on the purchase, and voted unanimously to give the transaction the green light.
And at one point Monday, board member Kurt Liebich worked in a defense of the deal itself during his testimony.
As one of the first board members who had access to Phoenix’s proprietary data, Liebich said he quickly could see the urgency in pursuing the huge but tarnished for-profit online giant.
“I saw how much value was there,” Liebich said during virtual testimony in the Boise courtroom. “(It’s) inconceivable to me that (this) wouldn’t be a highly competitive process.”
Labrador’s lawsuit contends that the board failed to do its homework, and simply took the University of Idaho’s word that other competitors were in the running for Phoenix.
Testimony from three board members Monday didn’t stray too far from the board’s established narrative:
They put their faith in Jenifer Marcus, a deputy attorney general who has been assigned to the board for several years.
Marcus counseled the education board on the closed meetings – held under a little-used legal exemption covering a transaction that pits a state agency against a public bidder from another state or nation.
“I have the utmost trust in our deputy attorney general,” board member Shawn Keough said. “I took her professional word for it.”
The board considered the University of Arkansas a potential suitor for Phoenix, even after that state’s board of regents rejected a purchase on April 24.
In a closed executive session the following day, University of Idaho president Scott Green urged board members not to count out Arkansas.
Said Liebich, “I still in my mind believed that Arkansas was a potential competitor.”
Under repeated questioning, board members did not name any other would-be suitors.
The trial is scheduled to run through Wednesday.
It’s considered a big hurdle to the Phoenix deal; Labrador’s team wants District Judge Jason Scott to nullify the board’s vote endorsing the purchase.
Other hurdles include the university’s accreditors approving the deal, and an Idaho-affiliated nonprofit has to secure financing for the purchase.
University officials have said they hope to close the deal early this year.