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.”