Broadband: Will state seek money back from contractors?

Contractors have received $29.7 million under the voided Idaho Education Network contract.

Should the state try to get this money back?

It’s one of the many legal issues surrounding the defunct statewide broadband system. And it’s one many state officials don’t want to talk about.

Syringa Networks, the Boise-based company that successfully sued under the contract, has argued in court documents that the state’s Department of Administration needs to seek money back from its network contractors, Education Networks of America, which has received $29.3 million under the contract, and CenturyLink, which has received $400,000 from the state.

Syringa points to a section of state law, that says that any money advanced under a void contract “shall be repaid forthwith.”

“(The Department of Administration’s) obligation to comply with the statute is mandatory,” David Lombardi, an attorney for Syringa, wrote in a Dec. 23 court document.

The Idaho Education Network contract is null and void; District Judge Patrick Owen has tossed it out. In response to Owen’s ruling, the Department of Administration has cut off contractor payments.

But what about past payments to the contractors — a hodgepodge of state general fund dollars, “e-Rate” dollars from cell phone and landline bills, federal economic stimulus dollars, and grant money from the J.A. and Kathryn Albertson Foundation?

No one’s saying much.

“We will respond in due course to the court filings of Syringa,” said Merlyn Clark, an attorney with the Boise firm Hawley Troxell Ennis and Hawley. The state has hired Hawley Troxell to defend the 2009 Idaho Education Network contract — at a taxpayer cost, to date, of more than $627,000.

Idaho Education Network spokeswoman Camille Wells also declined comment — deferring to the attorney general’s office, which has not been actively involved in defending the contract. Todd Dvorak, a spokesman for Attorney General Lawrence Wasden, also declined comment.

The reimbursement issue has come up in the periphery of the debate over funding — and salvaging — broadband in the state’s high schools. As the Joint Finance-Appropriations Committee discussed the $3.6 million broadband bailout spending plan designed to keep schools online until summer, Rep. John Gannon, D-Boise, broached the topic. Co-chair Rep. Maxine Bell, R-Jerome, brushed the question aside.

“I think it’s above our pay grade, at this point,” she said.

Two top legislators — one Republican, one Democrat — say the issue will be settled in court.

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Sen. Brent Hill, R-Rexburg

And in an email, Senate President Pro Tem Brent Hill acknowledged the complexity of the issue.

“From a fairness standpoint, one could certainly argue that the vendors provided the agreed-upon services at great expense to themselves and Idaho’s schools received significant benefits,” said Hill, R-Rexburg. “However, Judge Owen ruled that ‘all of the work has been done on the basis of awards that violate state procurement law’ and the Idaho Supreme Court characterized the award process as a ‘scheme to evade law.’ All guilty parties must be held accountable.

“This is probably more of a legal question than a policy or even fairness issue, and it will eventually be decided through the legal process.”

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Rep. John Rusche, D-Lewiston

Theoretically, the Legislature could attach language to future spending bills on school broadband — instructing the state to pursue reimbursement. The state could earmark money for the attorney general’s office, directed at such an effort, said House Minority Leader John Rusche, D-Lewiston. Beyond that, however, lawmakers may be reduced to watching the courts.

“The Legislature’s role is to push the money around,” he said.

Disclosure: Idaho Education News is funded through a grant from the J.A. and Kathryn Albertson Foundation.

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