Idaho AG files suit to recover payments on void contract

Posted at 2:55 PM, Sep 01, 2016
and last updated 2016-09-01 20:51:34-04
Attorney General Lawrence Wasden says two internet companies must return the millions of dollars paid to them under a voided state broadband contract.
Wasden filed the complaint last week in state court, just days after Education Networks of America Inc. and CenturyLink Communications LLC filed separate lawsuits demanding that the state pay them $37 million in back payments and damages.
Wasden's decision to recover taxpayer money is the latest development in the ongoing saga over the now-defunct Idaho Education Network — which provided broadband to public schools, but has been offline since 2015.
Taxpayers have already paid out more than $29 million for the project. Earlier this year, lawmakers had previously hoped to settle the claims for $8 million. Yet those efforts were scuttled when the Idaho Supreme Court agreed with a district judge that the contract with the companies was void because of an unlawful amendment made by the state.
The vendors argue they deserve repayment for unpaid work because the contract was deemed void due to the state's action and through no fault of their own. However, Wasden contends that the Idaho Supreme Court ruled that the state is required to recover tax dollars paid to the vendors under the illegal deal.
"Idaho law prohibits a state official from using state funds to make any payment on a void contract," Wasden wrote in his 10-page complaint. "Idaho has a strong public policy prohibiting payments on void state contracts."
According to the court's March ruling, if the appropriate legal officer failed to fulfill his legal duty of seeking repayment, the state's chief legal officer could step forward to do the job.
The Idaho Department of Administration — the agency that declined to pursue the repayments in August, leading Wasden to file the complaint — declined to comment, instead referring all calls to Gov. C.L. "Butch" Otter's office at the request of the governor's office. Otter's spokesman did not immediately comment.