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Spokane, Washington  Est. May 19, 1883

Legal opinion finds Idaho officials had no authority to purchase University of Phoenix

The University of Idaho is shown in this undated photo.   (Courtesy of University of Idaho)
By Laura Guido Idaho Press

BOISE – A legal opinion released Friday said the University of Idaho likely violated state law in its actions announced last year to purchase the private University of Phoenix, finding it set a “dangerous precedent.”

Idaho lawmakers requested that Legislative Legal Counsel Elizabeth Bowen review the State Board of Education’s actions in May, when the board voted unanimously to create a not-for-profit entity for the purpose of purchasing the controversial online higher education institution.

“Although my concerns are many, my primary concern is this: the Board is attempting to escape its constitutional and statutory limitations by recreating itself as a private corporation,” Bowen wrote in a letter to lawmakers detailing her opinion.

“If the Board’s conduct is allowed to stand, an incredibly dangerous precedent would be set, perhaps inspiring other state agencies impatient with their constitutional and statutory restrictions to follow suit.”

Bowen, whose job is to provide legal advice to the Legislature, recommended that the Legislature seek legal action against the deal, as it’s currently structured.

Reached by The Spokesman-Review on Friday, Bowen said she was not authorized to comment beyond the opinion, which she wrote specifically for lawmakers.

The Phoenix deal, which would cost a total of more than $600 million, has been lauded by UI President C. Scott Green as a solution to an impending “enrollment cliff” and another source of income.

The move has also faced pointed questions from lawmakers and Idaho Attorney General Raúl Labrador, who filed a lawsuit over alleged Open Public Meetings violations regarding the closed-door meetings held in advance of the public vote on May 18.

The judge eventually ruled against Labrador after a drawn out legal process. Labrador has vowed to appeal.

Bowen said that if the State Board of Education doesn’t abandon the purchase, the Legislature should file a lawsuit.

She said this legal action could be prevented if the board “repairs its encroachment of the legislative power by seeking legislative approval” and restructures the deal so it doesn’t “involve creating a corporation and so that it doesn’t involve state ownership and operation of a private institution.”

Bowen wrote in a nine-page letter that the board had no constitutional or statutory authority to acquire, own and operate a private institution.

The opinion was sent to Reps. Brent Crane, R-Nampa, John Gannon, D-Boise, Bruce Skaug, R-Nampa, House Speaker Mike Moyle, and budget-writing co-Chairs Rep. Wendy Horman and Scott Grow; and Senate Minority Leader Melissa Wintrow, D-Boise.

Idaho previously obtained an opinion from the Boise law firm Hawley Troxell Ennis & Hawley LLP that endorsed the purchase.

“The Regents do not fall under the definition of a ‘county, town, city, or other municipal corporation’ that would equally be prohibited from being a stockholder in a corporation,” that opinion read in part.

Spokesman-Review reporter Thomas Clouse contributed to this report.