Dive Brief:
- Members of Idaho’s education board unanimously voted Friday to determine that they did not violate the state’s open meetings law when they held a closed executive session to discuss whether the University of Idaho should acquire the University of Phoenix.
- The vote tees up a legal battle. Raúl Labrador, the state's attorney general, filed a lawsuit last month in Idaho district court against the board, alleging that the closed meeting illegally shielded “the transaction from public scrutiny.”
- In the lawsuit, Labrador asserted that the board’s vote to acquire the for-profit university for $550 million was void. “If the University of Idaho wants to approve the deal, it will need to do so after a public meeting,” the complaint states.
Dive Insight:
University of Idaho’s plan to purchase the University of Phoenix has been controversial from the start.
As news of the deal broke in May, higher education advocacy organizations and critics of for-profit colleges urged the state education board to carefully consider the purchase given chronic allegations that University of Phoenix has a history of misleading students. Those accusations may result in unknown liabilities, higher education experts said.
Labrador’s lawsuit echoes those concerns.
“No one knows to what extent the University, or the State of Idaho, will be responsible for University of Phoenix’s substantial financial and legal liabilities,” the complaint states. “The public is left to trust the University’s word that this half-billion-dollar purchase will be a good deal for Idaho.”
The lawsuit takes issue with three closed executive sessions the board held to consider the deal. One of those sessions came on May 15 — just three days before the board gave the final approval for the University of Phoenix acquisition, according to Labrador’s lawsuit.
Idaho law, with few exceptions, requires public governing boards to hold open meetings.
The education board has pointed to one of those exemptions — allowing private meetings when considering “preliminary negotiations involving matters of trade or commerce in which the governing board is in competition with governing bodies in other states or nations” — in this case.
However, Labrador contends the negotiations weren’t preliminary but were rather to consider the acquisition “in its final, or substantially final, form.”
Moreover, Labrador alleges the University of Idaho was not competing with other state governing bodies to acquire the University of Phoenix. The University of Arkansas, which had also been considering purchasing the purchase, had dropped out of the running by the time Idaho’s board held its closed executive session in May, the lawsuit alleges.
Idaho’s education board held its ground Friday.
“The attorneys engaged in this transaction determined that the exemption applied,” state board President Linda Clark said at Friday’s meeting. “Even now with the benefit of hindsight analysis, we believe the exemption applies. Therefore no violation occurred and no cure is necessary.”
Labrador’s office pushed back on the board’s decision.
The board "had an opportunity to simply cure a mistake and make a clear commitment to transparent governance,” the office said in a statement. “Instead, the Board neglected their duties and continued down a path of wasting taxpayer funds and resources to justify its failure to follow Idaho Open Public Meeting laws all to keep a half-billion dollar transaction from public discourse.”
