UI blames Hoover, Wallace
BOISE — The University of Idaho claims former school President Robert Hoover and former Financial Vice President Jerry Wallace contributed to the multimillion-dollar losses suffered on the ill-fated satellite campus.
The university’s foundation, which took the brunt of the financial loss, specifically blames Wallace.
In a March 22 letter filed as part of its claim with state insurance officials for compensation, the school said the “actions of these individuals and others caused the University of Idaho to sustain monetary losses and obtained financial benefits for others.”
In a separate March 1 letter, attorneys representing the foundation said it “sustained a loss of money arising from the actions of former University of Idaho employee Jerry Wallace. Those losses were caused by acts constituting a failure of Mr. Wallace to faithfully perform his duties as prescribed by law…The University of Idaho Foundation believes its losses may exceed $12 million.”
The letters did not specify how Hoover or Wallace contributed to the financial problems. The foundation has repaid the school $3 million and still owes $25 million to the university and its primary trust.
The documents were obtained by The Idaho Statesman through the state public records law and details were published in its Wednesday editions.
Hoover, who resigned over the project a year ago, did not return telephone calls from the Associated Press on Wednesday for comment. He is now the president of Albertson College of Idaho. Wallace, whose contract at Idaho was not renewed last year, was out of town until Friday and could not be reached, his wife said.
Attorneys for both the school and the foundation declined further comment.
“The letter is going to have to stand on its own,” said Sharyl Kammerzell, associate university counsel.
Envisioned as a multi-building $136 million complex, the University Place project in Boise was scaled back to just a single building, the Idaho Water Center. It was seen by many University of Idaho advocates as critical to maintaining the school’s clout against the rising influence of Boise State University.
The university confirmed last month that it filed the insurance claims with the state Office of Risk Management, which handles insurance matters, but officials refused to discuss details. The Statesman was unable to secure any further information through the public records law.
In its letter, however, the school’s attorneys said the losses likely exceed the policy limits, which are $5 million for failure to perform and $10 million for employee dishonesty.
The project’s financial maneuvering is the subject of investigations by state Attorney General Lawrence Wasden and the U.S. Attorney in Oregon, which took the federal probe over from the Idaho U.S. Attorney’s office because it had a potential conflict of interest.
An investigation for the state Board of Education last year concluded that the university and its foundation may have violated state laws or breached their ethical responsibilities to financial supporters by making front-end financial commitments they could not honor