March 1, 2024

Idaho House Committee Votes Against U. of Phoenix Deal

Idaho House Committee Votes Against U. of Phoenix Deal

The Idaho House State Affairs Committee today voted unanimously for a resolution urging the Idaho State Board of Education to reconsider the deal for the University of Idaho to acquire the for-profit University of Phoenix, and authorizing the Legislature to sue if necessary to stop the purchase.

The vote came just a day after University of Idaho President C. Scott Green aggressively defended the legality and value of the deal at a Committee hearing, and a member of the State Board, Kurt Liebich, told the Committee that a lawsuit by the legislature could place the deal at “grave risk.”

Apparently the Committee members are okay living with that risk.  That’s good news for Idahoans.

House Concurrent Resolution 26 could now reach the floor of the Idaho House of Representatives as soon as next week.

Among those who testified to the Committee this morning prior to the vote was Rod Lewis, a lawyer who previously served on the State Board of Education. He said the deal’s bond financing plan “sounds risky, and it is.” He challenged the University of Idaho’s claim that the school’s overall liability risk, in the event that Four Three, the new non-profit created by the Board of Education to buy Phoenix, failed to keep up with payments, would not exceed $50 million. Lewis asserted that in reality the University would be pressed by aggressive creditors — who would argue that the creation of Four Three was illegal — to bail out Phoenix and prevent default. The results, Lewis warned, would be “catastrophic.” 

University president Green made an appearance late in today’s meeting — his third time before a committee of the Legislature in three days. He said he appreciated the “passion” of critics of the deal but insisted that he was correct. “I’ve written two books on Sarbanes-Oxley,” he said, somewhat wearily. “I know what the red flags are, and it’s why we want to bring the best people in to take a look at this. And we believe we’ve done that.” 

UPDATE 03-05-24 2:45 pm MT: The full Idaho House of Representatives just passed House Concurrent Resolution 26 by a vote of 49-21.  The bill now goes to the state Senate, where, according to a statehouse source, the bill’s prospects are uncertain at this point. 

BACKGROUND: Concerns Mount in Idaho Over U. of Phoenix Deal