This editorial was published by the Lewiston Tribune and written by Tribune Opinion page editor Marty Trillhaase.
Group think is a closed loop involving like-minded decision-makers who don’t question their assumptions or motives.
The most infamous example may be “The Best and the Brightest,” author David Halberstam’s account of how group think among President John F. Kennedy’s advisers led to American involvement in the Vietnam debacle.
Closer to home may be the process that led up to the University of Idaho’s decision to acquire the for-profit online University of Phoenix for $685 million. Almost a year ago, the UI and the State Board of Education emerged from a series of closed-door meetings to announce the deal almost as a fait accompli.
What if there had been a few people inside that room who raised some of the following points:
Suppose the Arizona Industrial Development Authority gets cold feet about issuing $685 million in bonds to allow our nonprofit, Four Three Education, to complete the purchase?
Say political winds in Arizona change. Republican Gov. Doug Ducey is replaced by Democrat Katie Hobbs, who is skeptical about the University of Arizona’s acquisition of for-profit Ashford University in 2022 for $256 million. Hobbs is peeved at a $240 million hole in the UA’s finances.
“This is no longer just about finances, this is about a lack of accountability, transparency, and at the end of the day, leadership,” Hobbs said.
And when Dirk Swift, executive director of AzIDA, tells the Lewiston Tribune that his organization “passed on the opportunity to participate in the financing,” how do we plan to explain that?
We’re telling the public that Phoenix’s potential legal liabilities will have a negligible effect on the UI’s credit rating. What if that conventional wisdom is unduly optimistic? Suppose Moody’s Investors Service examines Phoenix’s “various legal and regulatory liabilities,” and concludes the operation potentially exposes UI to “potential future legal action” from the U.S. Department of Education and then tells the investment community that a downgrade “could be more than one notch. We try to be transparent, and if it’s capped at one notch, we would say that.”
Where would that leave us?
By the same token, have we considered our response if State Treasurer Julie Ellsworth adopts the same tone? Suppose she reacts to our assurances that the Phoenix purchase presents no likely impact on the state’s credit rating with skepticism — and then challenges the constitutionality of the acquisition?
How do we respond?
Are we prepared to answer hard-hitting questions from a respected source in both corporate Idaho and Idaho higher education? Rod Lewis had 17 years with Micron Technology Inc. as vice president of legal affairs and general counsel. He also served 15 years on the State Board of Education — and he had a reputation for doing his homework.
Assume he writes a searing critique of our acquisition. It’s unusual in scope and cost, he says. It was achieved “without any public meetings and debate and without approval by the Idaho Legislature. How is that possible?” he asks.
And when Lewis looks at the financing, he calls the leveraged buyout “risky” and a threat to more than just the UI or the State Board: “If Phoenix begins to falter, it will be the sneeze heard around Idaho’s world.”
Legislators believe they have the power of the purse over public institutions such as ours. Suppose they don’t accept our view that the ultimate authority for approving the Phoenix deal belongs to the State Board, not them? If the House responds with a 49-21 vote to block the deal and authorizes a lawsuit, can we prevail? Is this a fight we want?
How many adverse legal analyses are we capable of fending off?
One from legislative legal counsel Elizabeth Bowen who says the UI and the State Board overstepped their authority?
“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,” she 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.”
A second from the Boise law firm Givens Pursley, which found: “ ... The Board lacks the legal authority to create a private corporation to acquire the assets of the University of Phoenix and operate those assets doing business as the University of Phoenix, separately from the University of Idaho.”
And a third from Attorney General Raul Labrador, who — aside from challenging the closed-door sessions under Idaho’s open meeting law — now concludes the State Board has exceeded its authority.
How do we manage the fallout when Idaho Education News’ Kevin Richert makes a public records request and learns that we handed over $7.3 million to UI President Scott Green’s former employer, Hogan Lovells, for consulting services on the proposed acquisition?
Do we expect to get by with President Green assuring lawmakers that he turned to Hogan Lovells because “they’re the best of the best”?
What makes us think all of these people are wrong and that we’re right? — M.T.
