Lawmakers threaten lawsuit to stop Phoenix purchase

(UPDATED, 11:44 a.m., with responses from the State Board of Education and the University of Idaho.)

In a resolution unveiled Thursday, lawmakers are threatening a lawsuit opposing the University of Idaho’s proposed University of Phoenix purchase.

The bipartisan resolution, in the works for weeks, comes as the U of I and Phoenix hope to close the controversial $685 million deal. It also sets up a high-stakes political showdown — pitting lawmakers against Gov. Brad Little and the State Board of Education, who support the Phoenix purchase.

One of the bill’s two co-sponsors did not pass judgment on the merits of the Phoenix purchase — but he decried the State Board’s series of closed-door meetings that left lawmakers in the dark.

“Process matters to me,” said Rep. Brent Crane, R-Nampa, during a brief hearing unveiling the motion. “We were not dealt into this process at all.”

“This seems like it’s a purchase by ambush,” said Rep. John Gannon, D-Boise, who is co-sponsoring the bill.

The House State Affairs Committee voted unanimously to introduce the resolution. That sets the stage for a full public hearing in committee.

The resolution Thursday urges the State Board to “reconsider” its May 18 vote endorsing the purchase, and reconsider any affiliation linking the U of I and Phoenix “unless and until the Legislature enacts a law authorizing such actions.”

The threat of a lawsuit comes at the end of the three-page resolution. House Speaker Mike Moyle and Senate President Pro Tem Chuck Winder would be assigned to work on the Legislature’s behalf, with authority that includes “the initiation of appropriate legal action.”

The U of I has said Phoenix’s national operations would provide millions of dollars of new annual revenues, and the U of I has also touted the chance to leverage Phoenix’s online education platforms. The U of I has minimized the risks of the purchase, saying any losses would be limited to about $10 million a year. The U of I has acknowledged, but also has downplayed, the pitfalls of acquiring a for-profit partner with a checkered history.

U of I officials began to quietly pursue a Phoenix purchase more than a year ago. But lawmakers — and most Idahoans — knew nothing about the proposal until May 17, when the State Board scheduled its first and only public meeting to discuss the idea.

Since then, some lawmakers have openly questioned the merits of the purchase, while complaining that they were cut out of the process. The budget-writing Joint Finance-Appropriations Committee held an unusual oversight hearing in June, grilling U of I and State Board leaders about the proposal.

The State Board and the U of I declined comment on the resolution, saying they were still reviewing it.

This is a developing story. Check back later Thursday for an analysis piece on the issue.

Here’s a timeline and history of the proposal. 

Kevin Richert

Kevin Richert

Senior reporter and blogger Kevin Richert specializes in education politics and education policy. He has more than 30 years of experience in Idaho journalism. He is a frequent guest on "Idaho Reports" on Idaho Public Television and "Idaho Matters" on Boise State Public Radio. Follow Kevin on Twitter: @KevinRichert. He can be reached at [email protected]

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