Idaho official resigns after failed broadband contract

BOISE – Teresa Luna, director of the Idaho Department of Administration and a central figure in the scandal over Idaho’s failed statewide school broadband network, will resign at the end of this year’s Idaho legislative session, Gov. Butch Otter announced Tuesday.

Luna has led the department since 2011, when she was named to succeed former Director Mike Gwartney, a close friend of Otter’s who had served in the position for a salary of a dollar a year. Gwartney issued the $60 million Idaho Education Network contract in 2009 that a court last month declared illegal.

Otter, in a statement Tuesday, didn’t say why Luna was leaving.

“I admire Teresa’s tenacity and commitment to doing the right thing,” he said. “I am proud to call her a friend.”

Luna is the sister of former two-term Idaho schools Superintendent Tom Luna, who left office in December and also was a big booster of the Idaho Education Network, which was one of Otter’s key initiatives as governor.

Amid legal questions over the contract award in the summer of 2013 – after the Idaho Supreme Court raised questions and federal authorities cut off federal matching funds – Luna, without telling state lawmakers, extended the contract through 2019. Under questioning from the Legislature’s joint budget committee, she said she thought the legal problems would work out, and she expected extension of the contract to lead to savings.

The U.S. Department of Justice is investigating the contract deal, and the two politically connected vendors that held the contract have filed multimillion-dollar tort claims against the state.

Last week, legislative budget writers pulled the program out of the Department of Administration entirely and cut the department’s budget by nearly two-thirds. They shifted the school broadband program to new state schools Superintendent Sherri Ybarra’s office.

Prior to being named director, Luna was chief of staff to Gwartney. She previously worked for the Idaho state controller’s office for four years.

Idaho Public TV reporter Melissa Davlin inquired about Luna’s status after reviewing official records and discovering that two of Otter’s top cabinet members hadn’t yet been submitted for confirmation by the Senate for Otter’s third term.

Besides Luna, the other missing cabinet member is Idaho State Police Director Ralph Powell, who was in the middle of a contract mess with a private prison firm that led to a $1 million settlement.

Asked by Davlin about the two on Tuesday, the governor issued the announcement regarding Luna’s impending resignation; he had no comment on Powell.