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Posts tagged: Syringa Networks

Boyle on IEN: ‘Crony capitalism, corruption, special favors’

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.

Lawmakers concerned as state tries to salvage school broadband network

State Department of Administration Director Teresa Luna told Idaho EdNews today that the state is “exploring all opportunities” to keep broadband in the state’s high schools, as the state contests a court decision earlier this week voiding the $60 million contract for the Idaho Education Network. EdNews reporter Kevin Richert has a report here on what’s next for the IEN.

Meanwhile, I spoke with House Speaker Scott Bedke, R-Oakley, about it today.  “At the end of the day, this is an important thing,” he said. “We need to get a new contract as quickly as possible and keep the service up and going during the school year.” He said, “You have school districts that are dependent on this service, they’re in the middle of a term, and … the less disruption the better here, on our way to a new contract that addresses the issues that have been raised.”

Two lawmakers who serve on the IEN Program Resources Advisory Council, or IPRAC, that oversees the network, told Richert they have concerns over the state’s motion this week for the judge to reconsider his ruling. “I’m a little frustrated, quite frankly,” said Sen. Shawn Keough, R-Sandpoint. “It just seems like this is just another chapter in legal maneuvering, as opposed to solving the problem.” Sen. Dan Schmidt, D-Moscow, doesn’t think the judge will be persuaded. “I think the odds of that are pretty low.” The panel has a special meeting scheduled for tomorrow morning, but the only item on its agenda is a closed-door executive session for a legal briefing on the case.

House Minority Leader John Rusche, D-Lewiston, told Eye on Boise, “I think that we sometimes have trouble identifying when the horse we’ve been beating is dead. … My guess is if we want to get the e-rate money flowing back, we have to follow the judge’s rules and get that contract re-bid in some manner. And I think that’s the important thing, is to get the support for the telecommunications and broadband services the schools need.”

Federal e-rate money, which comes from a tax on telephones, was supposed to pay for three-quarters of the cost of the IEN, but the feds cut off the payments because of concerns about the contract issuance, forcing lawmakers to approve an $11.4 million bailout to keep the service from going dark. “Going to the mat to defend a process that’s not clean doesn’t make sense,” Rusche said. “To have that money sitting on the sidelines because we don’t want to do it in a clean manner, I don’t think that makes sense.”

State asks judge to reconsider ruling voiding $60 million IEN contract

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.

Latest tally on state’s legal costs for IEN lawsuit: $874,775

The state’s legal bills for defending its now-voided contract for the Idaho Education Network high school broadband service is climbing toward $1 million; you can read my full story here at The State Department of Administration, in response to a request from The Spokesman-Review, reported last night that it's paid $605,070.73 in legal fees to date for the case, in which private attorney Merlyn Clark of Hawley Troxell is representing the state. “There are additional legal fees paid by the Attorney General’s office that are not included in this number,” IEN spokeswoman Camille Wells said in an email.

The department has been paying all the legal bills since fiscal year 2012, but in 2010 and 2011, the Idaho Attorney General’s office paid 75 percent and the state’s risk management bureau paid 25 percent. The AG’s office paid $269,704 during that time period, with the risk management share coming in at $89,901.33; but Wells clarified late this afternoon that the risk management share was included in the Admin Department amount. So all told, that brings the total cost to taxpayers to date to $874,775.

Idaho officials scramble to keep broadband to schools after court voids IEN contract as illegal

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

Qwest gave $35,000 to Otter campaigns since ‘06, Syringa donated to 2 of his rivals

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 CEO calls for state to re-bid voided contract for Idaho Education Network

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.”

Court ruling, illegal contract threaten one of Gov. Otter’s proudest achievements

Here’s a link to my full story at 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.

Otter: ‘Legal decision does not detract from the value of the IEN’

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.”

Goedde: Attorneys for the state were confident, voiding of IEN contract a surprise

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.

ENA and Qwest may be the ones out millions from IEN ruling, not the state…

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.”

Bedke: Broadband for schools still a ‘worthy effort,’ hopes for a ‘do-over’

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.”

Link to full judge’s ruling; successful bidder was big giver to Otter, Luna campaigns

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.

Otter statement on IEN: Syringa ‘has no legitimate claim for monetary damages’ from state

Idaho Gov. Butch Otter, through his campaign, has released a lengthy statement on the legal dispute over the contract award for the Idaho Education Network, the statewide broadband network designed to link every high school; the state is embroiled in a lawsuit from Syringa Networks over the award of the $60 million contract to Qwest and Education Networks of America. The legal questions over the contract award prompted the federal government to stop paying its three-quarters share of the project in 2013, and lawmakers had to bail out the IEN with $11.4 million in extra state funds this year to offset the missing federal “e-rate” money; millions more may be requested when the Legislature convenes again in January.

In response to questions raised by Democratic challenger A.J. Balukoff about news reports that the state was seeking a confidentiality agreement in its negotiations with Syringa, Otter's statement says, “Confidentiality agreements are common in mediations to ensure both parties negotiate in good faith. Syringa refused to sign a confidentiality agreement; nevertheless, the state proceeded with mediation. There are no 'secret' negotiations taking place.” Click below for Otter's full statement, which includes several references to court documents in the case. It also asserts that Syringa “has no legitimate claim for monetary damages” from the state. You can read the full Idaho Supreme Court decision here in the case, which remanded it back to the district court on a single question: whether the contract was awarded illegally.

IEN contract dispute shows no signs of resolution, state could be on hook for millions more…

Syringa Networks, the company that sued over the 2009 broadband contract for the Idaho Education Network, is now demanding $17 million to settle the dispute, Idaho Education News reports. House Education Committee Chairman Reed DeMordaunt today dubbed the request “outrageous,” and the dispute appears unlikely to end soon. It’s already forced the state to put $11.4 million in state taxpayer funds into the IEN because the feds have refused to provide their three-quarters of the IEN’s funding with the contract award in dispute. The disputed contract went to Education Networks of America and Qwest, now known as CenturyLink. In the coming legislative session, lawmakers could be asked to hand over millions more. EdNews reporter Kevin Richert has a full report here.

District judge’s ruling allows Syringa lawsuit against state to continue

4th District Judge Patrick Owen has issued a ruling on several motions in the Syringa Networks lawsuit against the state Department of Administration over the award of the contract for the Idaho Education Network, and the outcome allows the case to continue to proceed. Syringa had sought to expand its case to include a charge against former state Admin Director Mike Gwartney, and Owen rejected that move; but like the Idaho Supreme Court last March, he ruled that the case can go forward on its key point: Whether or not the contract award violated Idaho state purchasing laws.

Owen’s decision includes a quote from the Supreme Court decision, noting that “All contracts made in violation of [Idaho Code 67-5718] are void and any money advanced by the State in consideration of such contracts must be repaid.” That’s the concern that the FCC has identified in holding up federal e-rate funds that were supposed to pay for three-quarters of the IEN's cost; those funds have been on hold since last March’s Supreme Court decision.

Idaho contracts under scrutiny amid ruling, report

Here's a news item from the Associated Press: BOISE, Idaho (AP) — In a ruling issued last week, the Idaho Supreme Court got right to the point: The Department of Administration's former head appears to have helped the state's biggest phone company win a contract. Supreme Court Justice Jim Jones wrote former Administration Director Mike Gwartney likely used his influence to steer business to Qwest Communications Inc. — and cut Syringa Networks out of the $60 million deal. The ruling allows Syringa to pursue its claim against the agency. But it also comes as state lawmakers pursue ways to improve the agency's contract monitoring. A measure has already cleared House and Senate. Idaho contracting has long been a subject of scrutiny, including a botched 2010 Medicaid management deal. A state auditor's report determined the process is plagued by inconsistencies and inadequate training.

Click below for Miller's full report.

Justices: Syringa can pursue claim against Idaho over purchasing violations

Here's a news item from the Associated Press: BOISE, Idaho (AP) — The Idaho Supreme Court justices ruled Friday phone consortium Syringa Networks can pursue its claim against the Department of Administration alleging the agency's bidding process violated Idaho statutes governing purchasing. Syringa sued Idaho in 2009, claiming the Department of Administration illegally handed Qwest Communications Inc. a $60 million contract to install the broadband infrastructure for the Idaho Education Network, an ongoing project to link public schools, universities and businesses in Idaho. A 4th District Court judge dismissed Syringa's lawsuit, on grounds it hadn't exhausted administrative remedies. But justices said there were no administrative remedies to exhaust. Among other conclusions, Supreme Court Justice Jim Jones wrote then-Department of Administration Director Mike Gwartney “appears to have been the architect of the state's effort to bend the contracting rules to Qwest's advantage.”

You can read the Idaho Supreme Court decision here.

Syringa Networks appeals to Idaho Supreme Court in IEN bid lawsuit

Syringa Networks is appealing to the Idaho Supreme Court the dismissal of its lawsuit against the state of Idaho over the award of a multimillion-dollar contract for the Idaho Education Network. The firm contends that its bid would have cost the state less than the contract that was signed with Qwest Inc. and another firm; and alleging wrongdoing on the part of former Idaho Department of Administration chief Mike Gwartney. You can read Syringa's explanation of its appeal here, and its notice of appeal here.

Judge partially dismisses Syringa lawsuit

A 4th District judge has issued his promised new ruling in the Syringa Networks lawsuit against the state of Idaho over the big contract for the Idaho Education Network, and it has a slightly different outcome from his last ruling: He’s dismissing most of the case against the state, though one count remains, as do the other defendants, Qwest and ENA. Click below to read a full report from AP reporter Rebecca Boone.

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About this blog

Betsy Z. Russell covers Idaho news from The Spokesman-Review's bureau in Boise.

Named best state-based political blog in Idaho for 2013 by The Fix

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