University of Idaho President C. Scott Green defended the proposed University of Phoenix purchase during a tense Statehouse hearing Wednesday morning.

Green’s appearance before the Joint Finance-Appropriations Committee represented a stark departure from a tepid Tuesday — when the president didn’t field a single Phoenix-related question from House and Senate education committee members.

At JFAC, lawmakers grilled Green about the financial risks of the $685 million purchase, and the U of I’s decision to outsource at least $7.3 million in consulting costs to Green’s former employer. Green also insisted the controversial deal is on sound legal footing — prompting a sharp rebuke from a JFAC co-chair.

During the 50-minute question-and-answer session, Phoenix was a recurring and touchy topic.

A testy exchange. Rep. Josh Tanner, R-Eagle, asked Green about a recent letter from the Legislature’s attorney, which contends the State Board of Education has no legal authority to acquire Phoenix, and move the university under the control of a U of I-affiliated nonprofit.

Constitutional law experts from two Idaho law firms, Hawley Troxell and Holland and Hart, said the purchase passes legal muster, Green said. “We rely on constitutional law experts. … This is too important and it’s too specialized an area to rely on a generalist.”

Minutes later, a visibly shaking Rep. Wendy Horman defended legislative legal counsel Elizabeth Bowen, and upbraided Green.

“You hired your own lawyer, and so did we,” said Horman, R-Idaho Falls, JFAC’s House co-chair. “I am not going to criticize your lawyers. … I think that was inexcusable.”

Green said he was not criticizing Bowen. “We just take issue with some of the facts.”

The U of I’s outsourcing. Sen. Dave Lent, R-Idaho Falls, asked Green about a Tuesday Idaho Education News report on the U of I’s Phoenix consulting. Specifically, the U of I has funneled at least $7.3 million to the international law firm Hogan Lovells; Green was the firm’s global chief operating and financial officer before he was hired as U of I president in 2019.

“There’s been an attempt at thinly veiled character assassination,” Green said.

Green then restated several points the U of I made in Tuesday’s article. Green said he has no financial stake in Hogan Lovells. He said the U of I’s legal department made the hire, and special counsel Kent Nelson said he made that decision at Green’s recommendation. And Nelson  touted Hogan Lovells’ expertise in acquisitions, tax law and government affairs.

“They’re the best of the best,” Green told JFAC Wednesday.

Financial risks. Asked about a $37 million federal student loan writeoff, Green again downplayed the overall risk to the U of I.

The U.S. Department of Education in September forgave loans for 1,200 Phoenix students, stemming from a dispute over the for-profit online university’s advertising practices. Based on the percentage of loan forgiveness applications the feds have approved, Green said the cost of the writeoffs could top off at $55 million. That’s still far less than the $200 million in cash the U of I would receive from Phoenix, if the purchase goes through.

A credit downgrade? Green took issue with a recent Moody’s Investors Service report, which said the Phoenix financing could trigger a “multi-notch downgrade” in the U of I’s credit rating. PFM, the U of I’s financial advisers, has said the university’s credit rating could drop, but only by one notch, Green said.

“We just felt that was premature,” Green said of the Moody’s report. “We’re disappointed, to be honest.”

The timetable. Green seemed to contradict Nelson Wednesday, minimizing the possibility that the deal could fall through due to delays.

The U of I and Phoenix hope to go into the bond market in May to finance the purchase, Green said. However, he said both parties are committed to seeing the deal through. “We’ve got time.”

A May 31 opt-out date looms over the purchase — and would allow either party to choose to walk away. And in a recent court filing, Nelson said the bond sales need to begin by May 1, or the purchase “will be delayed and likely undone entirely.”

Wednesday’s hearing marked the first in-depth legislative discussion of the Phoenix purchase since June, when JFAC held an unusual “oversight hearing” to discuss the issue.

The debate will continue Thursday morning. The House State Affairs Committee is scheduled to take up a legislative resolution urging the State Board to reconsider its support of the purchase. If passed, the resolution would give legislative leaders the power to pursue a Phoenix lawsuit.

Panel clears bill to create State Board regions

The House Education Committee on Wednesday advanced a bill to appoint State Board of Education members regionally. 

House Bill 644 would create seven regions for the seven-member board. While the governor would still appoint members, he or she would have to appoint one member from each region. 

The proposal, from Rep. Britt Raybould, follows efforts in recent years to require elections for the State Board. Last year, a bill to require regional elections narrowly failed in the House.

The bill addresses concerns motivating those efforts, but it substantially keeps the existing appointment process in place, Raybould, R-Rexburg, told the committee. 

“This bill is not intended to provide any sort of negative connotation or association with any members who are currently sitting on the board,” she said. 

At least three current board members live in the Treasure Valley, Raybould said. Idaho is in a position to “avoid the pitfalls” of other states, where one region has become the “driving force” behind public policy, she said. 

If the bill becomes law, it would assign current board members a region — not necessarily related to their residency — and allow them to finish their terms.

Rep. Jack Nelsen compared the proposal to the way in which lawmakers represent varying interests from around the state. “For a board that’s this important to Idaho, to have regional representation is really important,” said Nelsen, R-Jerome. 

Only Rep. Steve Berch, D-Boise, opposed advancing the bill. Berch said he’s concerned Raybould’s bill will “pave the way” for efforts to politicize education. If it becomes law, a bill next year will say “instead of appointing them, we should elect them,” he said, “and there’ll be partisan elections.”

HB 644 now heads to the House floor with the education committee’s endorsement.

Senate committee tables bill relaxing school reporting requirements

A bill to relax state school reporting requirements died in a Senate committee.

Senate Bill 1356 targeted the continuous improvement plan — a state-mandated, data-driven document that requires schools to spell out literacy goals, college and career advising goals and other metrics. SB 1356 would have eliminated this requirement, in favor of local strategic plans.

The Senate Education Committee split on the bill, sponsored by the committee’s chairman, Sen. Dave Lent, R-Idaho Falls.

Sen. Brian Lenney, R-Nampa, said the bill represented a step backward, since it would eliminate reporting requirements. “If you can’t measure it, you can’t improve it.”

Sen. Lori Den Hartog, R-Meridian, said the continuous improvement plans haven’t worked as promised. “I think we have to try something different to move the needle.”

The bill also would have required training for newly elected trustees, and biennial trustee training.

Hardline conservatives voted 5-4 to table the bill, which effectively kills it for the session.

A similar bill died on the House floor in 2023.