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Nonprofits seek relief from Idaho Attorney General Labrador’s ‘fishing expedition’

March 17, 2023 Updated Fri., March 17, 2023 at 4:32 p.m.

Teacher Emily Keene watches over a group of preschoolers as they build a garage for their toy cars at Giraffe Laugh 2, a child care center in Boise. Giraffe Laugh has joined an injunction to dismiss civil investigative demands from the Idaho Attorney General’s Office that ask for information on federal grant funding it and other programs received.  (Sarah A. Miller/Idaho Statesman)
Teacher Emily Keene watches over a group of preschoolers as they build a garage for their toy cars at Giraffe Laugh 2, a child care center in Boise. Giraffe Laugh has joined an injunction to dismiss civil investigative demands from the Idaho Attorney General’s Office that ask for information on federal grant funding it and other programs received. (Sarah A. Miller/Idaho Statesman)
By Nicole Blanchard and Ryan Suppe Idaho Statesman

Last year, the Marsing School District applied for a federal grant to help fund summer school and preschool programs. The rural Treasure Valley district, which serves fewer than 1,000 students, received about $135,000.

“It was always our interpretation that we qualified,” Marsing Superintendent Norm Stewart told the Idaho Statesman by phone.

That’s why Stewart was surprised this month when the district received a demand from the Idaho attorney general’s office to produce a slew of information about the district’s grant application. Idaho lawmakers are concerned that ineligible recipients may have received the grants.

And Attorney General Raúl Labrador’s office is investigating whether state law was followed in distributing the grants, spokesperson Beth Cahill told the Statesman by email.

But grant recipients, who were served commands to produce records from the state’s top attorney, said they followed the Idaho Department of Health and Welfare’s guidance. Dozens of recipients this week filed a complaint that asked Ada County’s 4th Judicial District to intervene, calling the attorney general’s demands and deadlines unreasonable.

Nearly three dozen organizations signed on to a complaint Wednesday, asking for an injunction to dismiss the investigative demands or, at the very least, extend the amount of time grant recipients have to respond.

“I don’t understand why the attorney general would serve all these organizations a civil investigative demand when all we did was apply for a grant and follow it,” Beth Oppenheimer, executive director for the Idaho Association for the Education of Young Children, told the Statesman. “The notion that these organizations broke a law is simply not true.”

Eligibility language inconsistent

Over the last two years, the Idaho Department of Health and Welfare funneled tens of millions in federal COVID-19 relief funds to youth centers, school districts and counseling services for child care as in-school learning was limited.

The American Rescue Plan Act (ARPA) “Community Partner Grants” were meant to “expand access to programming, enhance behavioral health supports and help bring students back up to speed after missed learning opportunities,” according to a news release from the Idaho Department of Health and Welfare, which oversaw the grant program in Idaho.

The Legislature cleared the federal funds in two $36 million tranches, one in 2021 and one in 2022. Lawmakers, who have the authority to enact sideboards on how federal funds are spent within the state, limited the grants to in-person programs. They wrote in legislation that the funds “shall be used for serving school-aged participants” 5 to 13 years old, “as allowable by federal guidelines.” Federal guidelines included children 13 or younger.

Grant recipients, such as the Marsing School District, used the funds for programs that included younger students. Stewart said the district’s preschool program has students who are 4 but will be 5 by the end of the school year.

In guidelines published online, the Department of Health and Welfare (DHW) advertised the grants as eligible for programs that serve Idaho children ages 5-13. The guidelines also noted that it’s “allowable to serve other ages of children within the program, but you must at least serve children in this age range and funding may not be used for children over 13.”

Greg Stahl, spokesperson for the department, pointed the Statesman to the published material, but declined to comment further.

Last month, the Legislature’s budget committee commissioned an audit of how the grants were distributed.

“There are some concerns about the distribution of funds that were intended for Community Partner Grants being dispersed to ineligible recipients,” Rep. Wendy Horman, R-Idaho Falls, who co-chairs the Joint Finance-Appropriations Committee, told the Statesman.

The attorney general’s office earlier this month began serving grant recipients with civil investigative demands, “a fact-finding tool,” Cahill said. Former Idaho Attorney General Lawrence Wasden issued civil investigative demands as well, including to foreign robocall outfits.

“Those who have cooperated understand that the purpose of the investigation is not to punish childcare providers but to enlist their help to determine whether state law was followed,” Cahill said. “We will zealously defend the powers the Legislature has given us to ensure compliance with Idaho law.”

In addition to the dozens of organizations, 70 unnamed grant recipients signed on to the grant recipients’ complaint, which was filed by Caldwell attorney and former state Rep. Greg Chaney. Chaney called the demands a “fishing expedition.”

The complaint said the grant recipients are “innocent non-combatants” in a dispute between the Legislature and DHW.

“You can’t conceivably tell me the attorney general’s office has reason to believe they’ve all broken the law,” he told the Statesman by phone. “We also take exception to just how overwhelming the requests themselves are.”

Grant recipients say demands are overwhelming

According to the complaint, the grant recipients were served with civil investigative demands requesting “thousands or tens of thousands of documents” to be delivered to the attorney general within 20 days. The complaint called the deadline unreasonable and said it would be “virtually impossible” for the grant recipients to respond in time.

Among many other things, the attorney general’s office demanded all documents “created, edited, sent, received, viewed or used” by the organizations that relate to the grants as well as names, titles, contact information of the people who worked on grant applications along with an explanation of their duties. Altogether there were 19 categories of information requested, according to a copy of the demand reviewed by the Statesman.

Oppenheimer told the Statesman her organization received a civil investigative demand, and she also received one as an individual. Oppenheimer and the association both signed on to the request for an injunction.

Oppenheimer told the Statesman the information the attorney general’s office demanded was “over the top.” For example, she said, the attorney general’s office demanded Oppenheimer provide a list of the charitable organizations that current and former employees are part of or donate to.

“The things listed in part of the demand really have nothing to do with the community grant programs,” Oppenheimer said.

Organizations from around the state signed on as plaintiffs in the complaint. They include school districts in Marsing, Emmett, Cascade and Murtaugh; multiple branches of United Way; and private and nonprofit counseling services and educational groups.

Tony Fisk, director of counseling organization Tidwell Social Work, told the Statesman his company used grant funds to expand child counseling services to offices in Nampa and Twin Falls. It also paid for staff training on different modes of therapy, particularly those that are helpful for multilingual children, children on the autism spectrum and children who speak English as a second language.

“We’ve stayed very true to what the grant has asked and are really kind of confused as to why we’re being subjected to this very punitive demand,” Fisk said.

The Idaho Resilience Project, which helps children work through trauma, also received grant funds. Board member Katie Francis told the Statesman the money went toward educating teachers, hospital employees and “anybody who works with youth directly to talk about impact of trauma and how to build resilience in children.” Francis said the organization also used its funds to connect children and families with mental health resources.

Grant recipients told the Statesman they felt completely overwhelmed by the scope of the civil investigative demands.

Fisk said the request was “so far-reaching that I could never complete it to (the attorney general’s) satisfaction,” a sentiment Oppenheimer shared.

She said fulfilling the attorney general’s requests in the required 20 days would likely require her organization to hire a forensic information technology expert to comb through emails and documents.

“We’re a nonprofit similar to these other organizations,” Oppenheimer said. “We’re not a state agency where we have access to experts in going through and finding all of this stuff.”

Recipients also said they were caught off guard by the investigation, which has caused employees a lot of stress.

“The level of fear and stress that this has caused is really a shame,” Fisk said. “Striking fear into nonprofits across the valley just seems mean-spirited.”

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