Posts tagged: campaign finance
Idaho Rep. Judy Boyle, R-Midvale, last week sent a guest editorial out to Idaho newspapers that's sharply critical of the Otter Administration's handling of the now-voided $60 million contract for the Idaho Education Network high school broadband project. “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,” she writes. “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.” Click below for her full article.
The Otter Administration is asking an Ada County judge to reconsider his ruling that the $60 million Idaho Education Network broadband contract was issued illegally and is void, reports Kevin Richert of Idaho Education News. Richert reports that the private attorneys for the state filed a 12-page motion Tuesday asking 4th District Judge Patrick Owen to either clarify or reconsider his decision; you can read his full report here.
The legal problems have thrown into limbo a broadband network that serves 219 high schools across Idaho, and already have cost the state millions. The judge ruled that then-state Department of Administration Director Mike Gwartney illegally cut Syringa Networks out of the contract in 2009 in favor of Qwest, now CenturyLink, and Education Networks of America, both of which are big donors to Idaho Gov. Butch Otter’s campaigns.
State officials and legislative leaders are scrambling to find a way to keep the statewide broadband network that serves Idaho high schools running, after a judge tossed out the five-year-old $60 million contract for the service on Monday. The head of Syringa Networks, the company that sued and won, is calling for a re-bid of the contract, and House Speaker Scott Bedke says that's likely where the state is headed. But in the meantime, he said emergency or bridge efforts are called for so school kids taking distance courses on the network don't get interrupted mid-term.
“This is about the kids’ education,” Bedke said Wednesday. “The judge has pointed out some problems, obviously. But we’re in the middle of a school year.” Officials from the state Department of Administration, the Legislature, the governor’s office and more were meeting or holding conversations about the issue on Wednesday. “We’re working on a path to ensure that this distance learning continues around the state,” Bedke said. Jon Hanian, spokesman for Gov. Butch Otter, said, “They’re still evaluating the decision and then determining the path forward.”
The network didn’t go down today, Department of Administration spokeswoman Jennifer Pike confirmed, even though a 4th District judge ruled that the contract between the state and Education Networks of America and Qwest, now known as CenturyLink, to provide the service was issued illegally. Judge Patrick Owen declared the contract void. You can read my full story here at spokesman.com.
Yesterday, I noted that Education Networks of America, the company that got the now-voided Idaho Education Network contract along with Qwest, has donated $18,250 to Gov. Butch Otter’s campaign, including $5,000 in September; and also has given $6,000 to state schools Superintendent Tom Luna’s campaign since 2009.
But it’s not the only player in the IEN deal that is a big campaign contributor. Qwest, now known as CenturyLink, is a prodigious contributor to Idaho political campaigns that has given even more to Otter. Since 2006, through its political action committee, formerly Qwest Idaho PAC and now CenturyLink Idaho PAC, it gave Otter’s campaigns a whopping $35,000.
Qwest also has given $3,500 to Luna’s campaign since 2011. And it’s donated to an array of other candidates from both parties, according to state campaign finance records.
Syringa Networks, the company that won the lawsuit over the contract, has, like Qwest/CenturyLink, donated to an array of candidates from both parties, though not near as many. Syringa gave $2,000 to Otter’s campaign in 2008. But in 2010, it donated $5,000 to the campaign of Keith Allred, Otter’s Democratic opponent that year. And in April of this year, it donated $5,000 to the campaign of Sen. Russ Fulcher, who ran against Otter in the GOP primary.
Syringa Networks, the company that won the lawsuit this week that threw out the $60 million state contract for the Idaho Education Network, is calling for the state to re-bid the deal, Idaho Education News reports today. EdNews reporter Kevin Richert reported that Syringa CEO Greg Lowe issued this statement:
“The District Court concluded that the procurement was ‘fatally flawed.’ The court’s decision speaks volumes with the undisputed facts and history of the case in reaching its conclusion. While Syringa Networks is supportive of the IEN, it pursued this action to prevent vendors such as ENA and Century Link from improperly benefiting from an unfair procurement process at the expense of Idaho’s taxpayers. We are pleased that the District Court agreed with our position by voiding the IEN contracts. With the District Court’s recent opinion, Syringa Networks remains hopeful that the Department of Administration will recognize that this litigation, funded by taxpayer dollars, was a wasteful attempt to ‘fix what cannot be fixed,’ and move forward to rebidding the IEN procurement.”
Here’s a link to my full story at spokesman.com on the ruling in the Syringa Networks lawsuit, in which the $60 million contract for a statewide school broadband network – one of Idaho Gov. Butch Otter’s proudest achievements – was voided after a judge ruled it was awarded illegally. The ruling leaves the fate of the five-year-old broadband and video-conferencing network in limbo, along with the tens of millions of dollars already spent on the project linking Idaho high schools, dubbed the Idaho Education Network.
Education Networks of America and Qwest, now known as CenturyLink, the two firms that got the contract, could end up the biggest losers in the deal. The judge cited an Idaho law that says when a state contract is issued illegally, all money paid by the state under the contract “shall be repaid forthwith.” Spokesmen for both companies didn’t immediately respond to a request for comment on Tuesday. But Garry Lough, Idaho sales director for ENA, told Idaho Education News his firm “will focus on continuing to provide stellar service as we allow time for the process to run its course.” You can see reporter Kevin Richert’s full report here.
Idaho Gov. Butch Otter has issued this statement about the court ruling voiding the state’s contract for the Idaho Education Network:
“There has never been a question about the opportunities the Idaho Education Network (IEN) provides to our students and teachers. Yesterday’s legal decision does not detract from the value of the IEN. I support the IEN and recognize the significance of this service for all of Idaho, especially our rural communities. I call upon all of the parties and stakeholders to commit to preserving this valuable service and unprecedented access to technology for Idaho’s students, teachers and communities while we work through the process.”
The governor's statement came in a news release from the IEN; you can read it here. It says, “The Department of Administration is currently reviewing the District Court's ruling, and a decision about how to proceed will be forthcoming. The state is committed to continuing to provide course access and opportunities to Idaho's students.”
Outgoing Senate Education Chairman John Goedde, R-Coeur d’Alene, said he’s concerned about the future of state-provided broadband for Idaho schools, after a judge voided the state’s contract for the Idaho Education Network, ruling it was issued illegally. “Certainly the attorneys for the state all along have expressed confidence in what had been done,” Goedde said. “So it kind of takes me aback a little bit, to find out that the summary judgment was issued.”
“There have been issues with the IEN all along,” Goedde said. But he said the concept behind it is important. “Expanding broadband to schools is, from my perspective, one of the great equalizers,” he said. “It certainly brings the whole world to students, and to teachers. So it’s become an integral part of the everyday classroom, and I just can’t envision that changing. We owe that to Idaho’s students.”
The state Department of Administration and the state’s outside attorneys had been so confident of the state’s chances of success in the case that the state department didn’t even bother to inform lawmakers in 2013 that it had extended the contract through 2019, promising another $10 million to Education Networks of America, even though the deal wasn’t yet up for renewal. State Administration Director Teresa Luna told the Joint Finance-Appropriations Committee in February that the department anticipated some state savings from the early renewal. In addition to broadband connections, the network provides video tele-conferencing equipment at Idaho high schools.
It may not be the state that’s out tens of millions of dollars because of an illegal contract for the Idaho Education Network – it may be the contractors, Education Networks of America and Qwest. In his ruling declaring the $60 million IEN contract illegal and void, 4th District Judge Patrick Owen wrote, “Because these contract awards are void, the provisions of Idaho Code 67-5725 now apply.”
That section of state law says:
“All contracts or agreements made in violation of the provisions of this chapter shall be void and any sum of money advanced by the state of Idaho in consideration of any such contract or agreement shall be repaid forthwith. In the event of refusal or delay when repayment is demanded by the proper officer of the state of Idaho, under whose authority such contract or agreement shall have been made or entered into, every person so refusing or delaying, together with his surety or sureties, shall be forthwith prosecuted at law for the recovery of such sum of money so advanced.”
“ENA and Qwest would have to pay the money back,” said Sen. Dean Cameron, R-Rupert, co-chairman of the Legislature’s Joint Finance-Appropriations Committee. “If I understand the ruling correctly, the contract is considered null and void and money that the state has paid out to ENA and Qwest are to be refunded to the state.”
“It’s what we had expected,” Cameron said. “It is why we had strongly and repeatedly encouraged the Department of Administration to resolve it and settle it before it got to this point.” The case went to mediation last month, but state officials said they were outraged that Syringa asked for damages, starting with a $17 million request, later dropped to roughly $5 million. Gov. Butch Otter said in a campaign statement Oct. 16 that Syringa has no right to any state payment. “It has no legitimate claim for monetary damages,” his statement said.
Cameron said, “I don’t know whether there’s any way of settling it at this point or not. It’s why we were very direct in all of our JFAC meetings in encouraging a settlement to occur, because if the court ruled as it looked like they might and they did, the Idaho Education Network would certainly be in jeopardy. And for whatever reason, the Department of Administration did not see fit to heed that counsel.”
Cameron said any settlement figure that the state had agreed to at least would have been a one-time payment, as opposed to the continuing requests the Legislature has received to bail out the IEN with millions in state funds each year because of the missing federal e-rate funds, which were supposed to cover 75 percent of the costs. The feds put those payments on hold in 2013 when the Idaho Supreme Court issued its initial ruling in the lawsuit over the contract award.
Cameron said, “I suspect they have an ability to appeal, but it seems futile, if they're going to appeal back to the same Supreme Court who essentially agreed with Syringa in the first place.”
Cameron said, “It would be, in my opinion, foolhardy for us to give additional money to a contract that is now considered to be void, and yet I think all of us would like to see the IEN succeed.” He said, “It’ll be a challenge, and I’m sure we’ll figure out a way to work through it. … I think long-term the IEN will exist, but I think the short-term ability for it to be available is in question.”
Idaho House Speaker Scott Bedke, R-Oakley, said this morning that he’s hopeful a “do-over” can happen on the voided contract to operate the Idaho Education Network statewide broadband network, to find a way to keep the service linking Idaho schools running. “I think that’s probably in everyone’s best interest,” Bedke said from a bus on the North Idaho Legislative Tour. “No one questions the need for getting broadband accessibility out in all the schools, and so that needs to be our goal.”
“To the extent we’re culpable, we’ll shoulder our responsibilities, I believe, collectively as a state, but that doesn’t diminish the fact that this is a worthy effort,” he said. “I don’t think the Legislature is going to be willing to walk away from the network. In this day and age, I think it’s a necessary component of our education system.”
Bedke said he hadn’t yet had a chance to review the judge’s ruling. “I suspect that this will be the topic of most of the conversations tomorrow,” he said. “The high ground is that the system and the need is valid, and we need to get everything squared away so that we can accomplish that.”
Here’s a link to 4th District Judge Patrick Owen’s full ruling in the Syringa Networks case, declaring the multimillion-dollar contract award for the Idaho Education Network illegal and void. The judge’s ruling could cost the state tens of millions as it has to repay federal funds that were supposed to cover three-quarters of the cost of the broadband network linking every Idaho high school. Idaho Gov. Butch Otter has steadfastly defended the contract for the past five years, even as courts including the Idaho Supreme Court continued to rule against it; the contract was awarded by Otter’s best friend, Mike Gwartney, who at the time was serving as the director of his state Department of Administration.
Education Networks of America, the company that got the contract along with Qwest, has donated $18,250 to Otter’s campaign, including $5,000 on Sept. 26 of this year. The firm also was awarded a second multimillion-dollar contract in July of 2013 to provide WiFi networks in Idaho high schools; state Superintendent of Schools Tom Luna awarded that contract. ENA also has contributed $6,000 to Luna’s campaign since 2009.
Last-minute campaign money continues to fly ahead of Tuesday’s election; you can see all the latest independent expenditure reports here, and the statewide candidates’ 48-hour notices here. Kevin Richert of Idaho Education News tallied up the 48-hour reports, which are required for contributions or independent expenditures of $1,000 or more from Oct. 20 to Nov. 1, and reports that the past two weeks have seen a $1.5 million spending spree in the governor’s race, including fundraising by both the leading candidates, incumbent GOP Gov. Butch Otter and Democratic challenger A.J. Balukoff, and independent expenditures by outside groups largely backing Otter and opposing Balukoff. His full report is online here.
Here’s an interesting tidbit: After reading in the Twin Falls Times-News today that A.J. Balukoff, Democratic candidate for governor of Idaho, donated to Republican Mitt Romney’s presidential campaigns both in 2007 and in 2012, I searched FEC records for Balukoff’s donations in federal races. Both those donations showed up, $2,300 in 2007 and $2,500 in 2012. So did several others – donations both to Republicans and Democrats over the years. In federal campaigns, Balukoff has donated to Democrats Shirley Ringo, Nels Mitchell and Walt Minnick; and to Republicans Larry Craig (2001), Mike Simpson (1998), Mark Stubbs (1998).
And, perhaps most interesting of all was this donation: In 2004, Balukoff donated $250 to a GOP candidate for Congress – Butch Otter. Mike Lanza, Balukoff’s campaign spokesman, said, “He once believed that Butch Otter would deliver on his promises. He no longer believes that.”
Today’s independent expenditure reports – documenting big independent campaign spending in the final days before the election, which must be reported within 48 hours – include an IACI-linked group, the Idaho Prosperity Fund, spending another $50,000 today on literature attacking Democratic candidate for governor A.J. Balukoff; the Idaho Republican Party spending $65,416 Monday on mailings supporting Butch Otter, Lawerence Denney and Sherri Ybarra and opposing A.J. Balukoff, Holli Woodings and Jana Jones; and Idahoans for a Strong Economy, a Democratic group, spending close to $140,000 yesterday and today on mailings, broadcast advertising (including radio ads) and literature supporting Jones and Woodings and opposing Denney. You can see the full reports online here.
The 7-day pre-general election campaign finance reports were due by 5 p.m. today. Here’s what they show in the governor’s race: A.J. Balukoff, Democratic candidate for governor, reported more than $1.04 million in fundraising during the final reporting period, from Oct. 1-Oct. 19, with $995,000 of that coming from his own funds. Overall, Balukoff reported raising $3.2 million to date, more than $2.7 million of it his own money, and spending all but $7,552. (See below for more on this from Idaho EdNews reporter Kevin Richert.)
Libertarian candidate for governor John Bujak reported raising $11,565 in the final reporting period, including $5,000 each from his parents, Joseph and Jean Bujak of Coeur d’Alene; he raised $29,638 year-to-date, including an earlier $10,000 loan to his campaign, and still had $15,080 in the bank at the close of the reporting period.
Incumbent GOP Gov. Butch Otter reported raising $184,321 in the final reporting period, through Oct. 19, and $2 million to date, and spending all but $157,719 by the close of the reporting period. Both Otter and Balukoff reported that their biggest expenses during the reporting period were for broadcast advertising, with each spending well over half a million dollars.
The 7-day pre-general election reports only cover contributions and spending through Oct. 19, but big contributions in the final two weeks before the election must be reported on separate reports that are due within 48 hours. Both Otter and Balukoff filed 48-hour reports today. Balukoff reported $101,000 in contributions on Monday, with $100,000 of that his own money. Otter reported $18,400 in new contributions on Monday, with $3,000 from Hayden Beverage Co. and $2,500 from Rod Lewis of Eagle the largest on the list.
Also filing a 48-hour report today: Idaho Attorney General Lawrence Wasden, who reported receiving a $5,000 campaign contribution from Facebook in Menlo Park, Calif. on Monday.
Idaho Education News reporter Kevin Richert tallied up Balukoff's reports in the governor's race, including the 48-hour reports, and came up with a total of $3.2 million in personal funds Balukoff has put into his campaign all told. Richert also has an overview of top races here, including two more races in which Democrats have out-raised their Republican opponents: Secretary of State, in which Democratic candidate Holli Woodings loaned her campaign another $100,000 and also collected twice as much in donations as GOP rival Lawerence Denney during the final reporting period; and state superintendent of schools, in which Democratic candidate Jana Jones continued to out-raise GOP rival Sherri Ybarra.
Today’s tally of last-minute campaign spending shows another big broadcast advertising push in favor of GOP Gov. Butch Otter, to the tune of $50,241 by the Idaho Republican Party, which already had launched a radio ad campaign. And another push against Otter’s Democratic challenger, A.J. Balukoff, by the Idaho Prosperity Fund, a political action committee affiliated with the Idaho Association of Commerce & Industry business lobbying group; the IACI group spent another $24,012 for broadcast advertising against Balukoff on Saturday, according to 48-hour reports filed with the Idaho Secretary of State’s office.
Meanwhile, the Conservation Voters for Idaho Action Fund reported spending $7,766 on mailings in support of candidates Fosbury, Rudolph and Rubel; and Michael D. Batt of Idaho Falls reported spending $10,198 on radio advertising against Balukoff in eastern Idaho.
Candidates filing 48-hour reports today included Otter, who reported $4,000 in new contributions including $2,000 from K12 Management Inc. of Herndon, Va.; Lt. Gov. Brad Little, who reported $7,000 in new contributions including $4,000 from Midas Gold Inc.; GOP Secretary of State candidate Lawerence Denney, who reported a $1,000 contribution from Todd Mall of Grand Rapids, Mich.; Democratic candidate for state schools superintendent Jana Jones, who reported a $1,000 contribution from high-tech entrepreneur and human rights activist Greg Carr of Idaho Falls; and GOP state Controller Brandon Woolf, who is unopposed for re-election but reported a $1,000 campaign contribution from Potlatch Corp.
On the last-minute campaign cash front, A.J. Balukoff, the Democratic candidate for governor, had the biggest numbers today, not only collecting two more $1,000 contributions but also putting another $345,000 of his own money into his campaign. That brings him up above the $2 million mark for the personal funds he's put into his campaign for governor. Meanwhile, Gov. Butch Otter reported another $13,500 in major contributions, according to 48-hour notices filed with the Idaho Secretary of State’s office; that included $5,000 contributions from Hewlett-Packard Company PAC and from Marian Zubizareta of Boise. The other candidate with a 48-hour notice filed today was Democratic candidate for Secretary of State Holli Woodings, who reported $3,500 in new contributions, including $2,500 from the Shoshone-Bannock Tribes.
Several new independent-expenditure notices also were filed today. The Idaho Realtors PAC reported spending $4,750 on literature, postage and advertising in support of Rep. Cindy Agidius, R-Moscow, who is locked in a tight rematch race with Democratic challenger Paulette Jordan, who lost to Agidius two years ago by just 123 votes.
Two PACs that were among several used two years ago for a controversial money-shuffling maneuver to underwrite unsuccessful efforts to defeat several Republican incumbents are also starting to shift money around again: GUN PAC reported spending $1,166 for literature on behalf of Rep. Thyra Stevenson, R-Lewiston, and transferring $2,000 to Free Enterprise PAC for advertising. Meanwhile, Free Enterprise PAC reported spending an identical amount, $1,166, on literature on behalf of Stevenson, and transferring $1,500 to Idaho Chooses Life for advertising.
It’s that time, the period shortly before the election when things happen quickly. Campaign contributions or independent expenditures of $1,000 or more now have to be disclosed within 48 hours. There are three independent expenditure notices thus far: The “American Comeback Committee Idaho PAC,” which is affiliated with the Republican Governors Association, has reported spending $33,645 on Monday for literature/printing in support of Butch Otter and against A.J. Balukoff, all paid to Paces Direct LLC in Atlanta, Ga.; the RGA already has run two TV ads in Idaho attacking Balukoff.
And the Idaho Republican Party has reported a $24,871 independent expenditure for broadcast advertising in support of Butch Otter, through a payment to Strategic Media Services Inc. of Arlington, Va. Party Executive Director Dave Johnston said that’s for a new radio ad the party is launching touting Otter, to run in selected markets around the state. “We put together a radio ad that talks about pro things about our governor, so that’s hitting the airwaves,” he said. There may or may not be more to come. “We’ll see,” Johnston said. “We’re adjusting on the fly … as the campaign cycle gets closer and closer. … So it depends on how the remaining week goes.”
The third independent expenditure report, from “Idahoans for a Strong Economy” and benefiting candidates Talkington, Burgoyne, Kloc, McCrostie and Wood, reports $1,870 spent for a mailing.
Meanwhile, as of mid-afternoon today, Otter has filed 48-hour reports showing eight contributions totaling $27,000, including $5,000 each from the Idaho Republican Party, Babcock & Wilcox Co. of Lynchburg, Va., Alliance of Automobile Manufacturers of Washington., D.C., and Val Holms of Helena, Mont. Balukoff has filed 48-hour reports showing four new $1,000 donations, plus another $100,000 of his own money that he’s kicked into his campaign.
Lawerence Denney, the GOP candidate for Idaho Secretary of State, reported two $5,000 contributions, one from the Idaho Republican Party and one from Richard Larsen of Rexburg. And Jana Jones, the Democratic candidate for state superintendent of schools, reported a $1,000 contribution yesterday from the Coeur d’Alene Tribe, while GOP rival Sherri Ybarra received $5,000 yesterday from the Idaho Republican Party. Also, state Treasurer Ron Crane reported a $5,000 donation from Richard Larsen Farms in Rexburg. You can see the statewide candidates’ filings here, and the independent expenditure reports here.
In three statewide races, Democratic candidates enjoy a significant fundraising advantages heading into the final weeks of the campaign, reports Idaho Education News reporter Kevin Richert, who has been tallying campaign finance reports filed for today’s deadline. Democratic gubernatorial candidate A.J. Balukoff raised — and spent — more than $1.8 million on his bid to unseat GOP incumbent Butch Otter, Richert reports. However, the accountant, prominent businessman and Boise School Board member self-financed the bulk of his campaign. Meanwhile, Otter raised more than $600,000 during the summer, and heads into the campaign home stretch with more than a 10-to-1 advantage in cash on hand.
Through the summer, state superintendent’s candidate Jana Jones continued to pad her fundraising advantage over Republican Sherri Ybarra, as the candidates vie to succeed outgoing Republican Tom Luna. In another open race, this one to succeed longtime Secretary of State Ben Ysursa, Democratic state Rep. Holli Woodings of Boise has built a sizable fundraising edge over state Rep. Lawerence Denney, R-Midvale, a former House speaker. You can read Richert’s full report here.
A.J. Balukoff, the Democratic candidate for governor of Idaho, is matching contributions to his campaign by putting in $3 for every $1 donated this month, Idaho Statesman political columnist Dan Popkey reports today. Balukoff’s pledge is credible because the multimillionaire businessman can afford it – and he said when he announced his candidacy against two-term GOP Gov. Butch Otter that he was willing to dip into his own funds to help finance his campaign.
“I know that pay-to-pay politics will put my opponent at a financial advantage, but I was surprised to find out how slanted it is,” Popkey reported Balukoff said in a fundraising pitch sent out to supporters this week, headed, “Jump in July: TRIPLE MATCH!” Balukoff told Popkey, “I think it’s important that this race be competitive and that we talk about issues. People pay attention when they realize there’s a viable alternative to Gov. Otter.” Popkey’s full report is online here.