(UPDATED, 2:57 p.m., with comment from State Board of Education.)

Lawmakers should take “appropriate legal action” against the proposed University of Phoenix acquisition, an attorney for the Legislature said Thursday.

In a 10-page letter to the Legislature, made public Friday, legislative legal counsel Elizabeth Bowen says the State Board of Education has no power to acquire Phoenix, and move the for-profit online school under the umbrella of a nonprofit aligned with the University of Idaho.

“Neither the board nor the (U of I) is private, and they have no legal right to act as if they are,” Bowen said in her letter.

The letter — addressed to a bipartisan group of seven lawmakers, including House Speaker Mike Moyle, House State Affairs Committee Chairman Brent Crane, and Joint Finance-Appropriations Committee co-chairs Sen. C. Scott Grow and Rep. Wendy Horman — escalates the Statehouse backlash over the $685 million Phoenix purchase.

Last week, House State Affairs introduced a resolution urging the State Board to reconsider its May 18 vote authorizing the purchase. That resolution raises the threat of a lawsuit from the Legislature. House State Affairs is likely to hold a hearing on the resolution next week, Crane told Idaho Education News Wednesday.

Bowen’s letter spells out the Legislature’s legal issues:

• While the U of I-affiliated Four Three Education would finance the purchase and oversee Phoenix, the State Board is essentially buying Phoenix. And the State Board has no authority to “acquire, own and operate” a private university.
• The State Board also has no authority to create Four Three, as a separate corporate entity to operate Phoenix.
• This questionable arrangement, the creation of Four Three, might not stand up in court. “If the State Board of Education and the University of Idaho proceed under the current terms of the proposed transaction, they do so at their peril,” Bowen wrote. “Far more disturbingly, they do so at the peril of the Legislature and the people of Idaho, who might be called on to rescue the University of Idaho from a disastrous financial judgment.”

In a statement Friday afternoon, the State Board declined to comment on Bowen’s letter. “Neither the board nor its staff have been contacted by the Legislature’s attorney regarding her letter. We are reviewing the letter, and we are not able to comment on it at this time.”

The U of I has long said its plan passes constitutional muster, citing a June opinion from the Boise law firm Hawley Troxell.

A legislative lawsuit could be a second legal challenge to the Phoenix purchase — which could be on a tight deadline.

Attorney General Raúl Labrador has filed an appeal to the Idaho Supreme Court, again challenging the State Board’s closed discussions of the Phoenix purchase.

Four Three still must finance the purchase, a process that is on hold while the proposal is mired in court. And in a Supreme Court filing this week, university attorney Kent Nelson said a lengthy appeal could torpedo the entire purchase.

If a deal isn’t closed by May 31, the U of I or Phoenix could walk away.

More reading: Click here for our in-depth Phoenix coverage.