The state does not owe back payments to vendors on the defunct Idaho Education Network project, according to Attorney General Lawrence Wasden.
And Wasden says the vendors — Education Networks of America and CenturyLink — must return the millions of dollars they received for the mothballed broadband project.
In an Aug. 23 lawsuit, Wasden ratchets up the postmortem battle over the Idaho Education Network. With the project’s contract void, and the broadband system shut down since 2015, attorneys on both sides are escalating what amounts to a big-money probate dispute.
At stake — for the state and the vendors — are millions of taxpayer dollars.
Wasden’s lawsuit makes two main assertions, and they set up a legal showdown between the attorney general and network vendors.
First, Wasden says the state owes no money to vendors.
As the Idaho Education Network contract dispute dragged out in state courts, the state cut off payments to ENA and CenturyLink.
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Because the contract has been ruled void, Wasden says, the state has neither a mechanism nor an obligation to pay the vendors.
Back payments are a key issue in the vendors’ lawsuits against the state, both filed on Aug. 19. ENA and CenturyLink each claim damages of at least $18.5 million, and say the continued use of their telecommunications equipment constituted theft.
Second, Wasden says the vendors owe millions of dollars to the state.
Here, Wasden cites the state Supreme Court’s March 1 ruling that voided the Idaho Education Network contract. The court demands that the state recover all money paid to ENA and CenturyLink.
Wasden’s lawsuit doesn’t specify an amount, but says the vendors must return “all funds” received under the Idaho Education Network contract. Idaho Education News has previously reported that the vendors received $29.7 million from the state.
In their lawsuits, ENA and CenturyLink ask a federal judge to stop Wasden from seeking repayments.
By demanding repayment, Wasden also is at odds with a state appointee. On July 25, state Administration Department Director Robert Geddes said he would not seek repayment. Geddes argues that the state didn’t advance any money to the vendors, and only paid the vendors for services they provided the state.
Geddes’ decision triggered a chain of events in the escalating legal battle.
On Aug. 10, Wasden demanded repayments from CenturyLink and ENA, setting an Aug. 22 deadline. Instead, the vendors filed their lawsuits on Aug. 19 — prompting Wasden’s Aug. 23 countersuit.
‘E-Rate’ payments refused
In another Idaho Education Network development, school districts are beginning to get word that they will not receive federally administered payments for technology upgrades.
A federal contractor, the Universal Service Administrative Company, says it will refuse to reimburse Idaho schools for technology purchases made in the 2013-14 school year.
It is not immediately clear how many schools are affected, or how much money was lost. This spring, USAC placed about $2 million in payments on hold, citing the ongoing dispute over the Idaho Education Network legal dispute. This payment snafu threatened to affect 57 districts and charter schools across the state.
USAC administers “e-Rate,” a federal program that distributes money from telephone surcharges to schools and libraries across the country. The “e-Rate” program once covered the bulk of Idaho Education Network costs, and local school districts were expecting “e-Rate” to cover technology upgrades as well.
Recently, Gov. Butch Otter hired a Washington, D.C., law firm to represent Idaho in the “e-Rate” dispute. On Thursday, Otter spokesman Jon Hanian declined to discuss the state’s legal options.
“The state is reviewing the (USAC) letter and evaluating options as we work with stakeholders to determine the best path forward,” he said.