IDHW sues AG Labrador over childcare grant investigation

The Idaho Department of Health and Welfare is suing Attorney General Raul Labrador’s office to halt its investigation into the agency’s administration of $36 million in federal childcare grants.

You can find both legal documents here and here.

That move comes after IDHW received two legal analyses from the attorney general’s office both prior to Labrador’s inauguration and after he took office saying the way the grants program was run “does not appear to violate federal and state guidelines.”

In a statement issued Thursday, Labrador’s office said he was “never apprised of or consulted about this opinion, and he wouldn’t have signed it.”

Labrador’s Chief of Civil Litigation, Lincoln Wilson, issued civil investigative demands on March 3 to IDHW Director Dave Jeppesen, as well as Deputy Director Jennifer Palagi and division administrator Shane Leach.

In them, Wilson demanded the three officials hand over all documents related to the Community Partner Grant program, along with the names and contact information of all department employees, current and former, who worked on the program in any capacity.

By issuing these demands, Jeppesen said Labrador is creating an “adversarial relationship” with his own client.

State law requires the attorney general to represent all state agencies in legal matters. If there’s a conflict of interest, the AG’s office may authorize the hiring of an outside attorney.

IDHW maintains that it properly issued that grant money, which was part of the 2021 American Rescue Plan Act during the COVID-19 pandemic, according to documents filed Thursday in state district court.

Last year, state legislators signed off on issuing the grants, saying it must be used to serve children between the ages of 5-13, “as allowable by federal guidance.”

Those two legal memos from the attorney general’s office from Nov. 30, 2022 and Jan. 25, 2023 say there’s no conflict between the federal and state guidelines.

That’s because federal guidance “[emphasizes] enabling access to high-quality child care, without regard for age.” Grant recipients could serve children younger than five, but they must also offer programs to those ages 5-13 as outlined in the state legislation, according to the memos.

“The Department’s implementation of the CCDF program is consistent with federal and state guidelines,” according to the memos, whose author has had their name redacted.

In a statement, Labrador’s office points out that Jeppesen told the Joint Finance-Appropriations Committee on Jan. 17, eight days prior to the Jan. 25 memo, that he didn’t know of any funding going to children younger than 5 years old.

JFAC co-chair, Rep. Wendy Horman, R-Idaho Falls, had asked Jeppesen how that money was being spent, considering those age limitations were used to advocate for the budget bill last year.

“Once we make assertions on the floor with the budgets we’re bringing, to find out in hindsight that it went to serve children under that age, possibly, is of deep concern,” Horman said.

The Idaho Press reported last month that JFAC authorized an audit of the program, with the committee’s other co-chair, Sen. Scott Grow (R-Eagle), saying the department “…can’t ignore state law.”

Jeppesen also argues that Labrador lacks the legal authority to issue these civil investigative demands in this case.

Idaho law states the attorney general may issue these legal demands if they have “reason to believe that a person has engaged in, is engaging in, or is about to engage in any act or practice declared to be unlawful.

Given the two memos authored by those within the attorney general’s office finding no problems with the grants’ administration, Jeppesen says Labrador can’t meet that requirement.

“This is not a simple matter of an overbroad request for documents, it is a matter of government overreach,” the filing states.

The attorney general’s statement rejects that claim. “The Director’s shifting accounts alone provide ample evidence [to] support for AG Labrador’s belief that there may be an unlawful disbursement of charitable assets in violation of Idaho law.”

Labrador’s office sent similar investigative demands to childcare providers and public school districts that received these grants earlier in March, prompting a separate lawsuit filed last week.

Ultimately, taxpayers will be on the hook for these legal fees. It’s not immediately clear how much Jeppesen’s private representation has cost.


James Dawson, Boise State Public Radio

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