Idaho citizens are watching crony capitalism in action

As a conservative state legislator from rural Idaho, member of the House Education Committee, supporter of the Idaho Education Network (IEN), and lifelong Republican, I have been carefully watching this issue since 2009 when a state contract was awarded to connect Idaho’s  schools, libraries and many state agencies with high speed internet. The federal tax on Idahoans’ phones was to pay 75 percent of the cost. Correctly done, it brings the world to Idaho students and citizens, especially in rural areas. However, when it becomes illegal and corrupt, I must speak out.                                  

Idaho citizens are watching crony capitalism in action. A rigged contract required a homegrown company, Syringa, to sue and years for justice to finally prevail. The state court recently ruled in favor of Syringa, voiding the $60 million contracts to Qwest/CenturyLink and Education Networks of America (ENA). The court also denied the state’s motion for summary judgment, adding that, “An agreement in violation of the state’s procurement law cannot be fixed or cured.”

The cost to the state taxpayers so far — $11.4 million appropriated last legislative session to cover withheld federal funds through February 2015, $964,676 in attorney fees, $13 million to repay the feds, yet-to-be-determined Syringa attorney fees and damages and bidding and awarding a new contract. The federal government could bar Idaho from receiving additional funds.

The district court judge quoted Idaho’s law: “Any sum of money advanced by the state shall be repaid forthwith. Any person refusing or delaying shall be forthwith prosecuted at law for the recovery of such sum of money so advanced.” The children of Idaho will be the losers if recent history is any indication. A deal is probably quickly being written to clear the governor’s friends and donors from paying back their illegal gain as happened in the Idaho prison scandal.

Why did this occur? It is an example of crony capitalism, corruption, special favors for campaign donors, the governor’s staff moving to lobby and/or work for the very businesses receiving the contracts or from those companies to the governor’s staff. It is back-slapping, good old boy networks, winks and nods, cover ups, denying involvement, blaming others, attacking those asking questions or with the courage to say the Emperor has NO clothes.

January 2009 — The state Department of Administration awarded a bid to Syringa — a fiber optic network provider operating since 2002, consisting of 12 rural Idaho phone companies, and Syringa’s partner, ENA. An independent panel chose Syringa as the least expensive and most proficient with scores well above another company, Qwest (now CenturyLink) in six of seven categories. Syringa’s cost was $570,000 a month to run the network to Qwest’s $874,000. Syringa already supplied the service to numerous rural Idaho schools with 2,000 miles of fiber optics.

February 2009 — Otter’s close friend and business partner, Director of Administration Mike Gwartney, appointed by Otter, replaced Syringa’s name with Qwest but kept ENA’s name in the contract. This voided the Syringa contract. The illegal maneuver came after a confrontation between Syringa’s CEO, Greg Lowe, and Gwartney when Lowe suggested methods to save the state millions.

January 2014 — The legislature finally learned the federal government cut off funding in 2013 after the Idaho Supreme Court ruled for Syringa and sent the case back to the district court.

This is an issue of right and wrong — not Democrat or Republican. Will Idahoans tolerate such blatant corruption and backroom illegal deals with the taxpayer expected to pay all the bills — twice in this case? Will Republican legislators allow themselves to be intimidated into silence simply because of a Republican governor, worried their bills will be vetoed or not even printed? Has Idaho become as unjust and corrupt as Washington, D.C., which specializes in “political parties first, principles and ethics last?” Or will the good people of Idaho say ENOUGH and demand their legislators be the necessary checks and balances to stop cronyism? When the people lead, the politicians will follow.

Judy Boyle is a Republican Representative from Midvale.