- Associated Press - Thursday, April 21, 2016

BOISE, Idaho (AP) - Idaho officials initially agreed to pay $7.2 million in a settlement over an illegal state contract that provided broadband in public schools.

However, a March ruling by the Idaho Supreme Court scuttled those settlement talks after justices upheld a lower court decision that the $60 million contract was illegal.

The surprise ruling by the high court came down just days before the settlement was finalized.

A draft settlement agreement obtained by The Associated Press shows that two broadband vendors - Education Networks of America and CenturyLink - would have received $3.6 million each as part of the deal that was later halted.

Vendors had filed tort claims demanding a total of $11 million, but the companies agreed to settle for a smaller amount to cover the work they had performed under the contract but hadn’t been paid for.

The state halted payments after the lower court voided the contract.

“Obviously that document never went into effect and obviously that effort did not happen,” said Department of Administration Director Bob Geddes.

Since then, House Speaker Scott Bedke and Senate President Pro Tem Brent Hill successfully requested $8 million from the Idaho Legislature to use for a possible new broadband agreement earlier this year.

Bedke and Hill said a settlement - if one is reached - would be cheaper than the $11 million the state is currently facing in tort claims from the vendors.

However, in its ruling, the state Supreme Court said the law required the state to try to recover the money already paid out under the voided contract, but the justices held off from officially ordering state officials to do so.

Geddes says he’s still deciding if his department will pursue repayment. If he declines, state Attorney General Lawrence Wasden has said he’s ready to take legal action on the repayments.

“I think those documents provide great insight on where we’ve been but not a ton of foresight on where we’re going to go,” Geddes said.

In 2009, a consortium of telephone companies called Syringa Networks sued the state over the broadband deal, contending the Department of Administration illegally handled the contract to install the infrastructure in schools.

Idaho already has agreed to pay around $1 million for Syringa Networks’ legal fees. The state also has spent nearly another $1 million on its own legal defense.


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