Tuesday, March 17, 2015

Idaho Department of Administration Director Resigns Amid IEN Lawsuit

Posted By on Tue, Mar 17, 2015 at 6:46 PM

Idaho Department of Administration Director Teresa Luna is set to resign at the end of the 2015 legislative session, at which time Gov. C.L. "Butch" Otter will appoint an interim director.

The resignation comes at a time when the state of Idaho—and specifically the Department of Administration—is embroiled in a controversy surrounding the Idaho Education Network, the service that until recently provided broadband Internet access to Idaho schools. 

In November 2014, 4th District Court Judge Patrick Owen ruled that the state's contracting process for securing broadband access was void after Syringa Network successfully sued the state, alleging that Luna's predecessor, then-Department of Administration Director Mike Gwartney, cut the company out of the process in 2008, instead awarding the $60 million contract to Education Networks of America and Qwest. 

"Gwartney appears to have been the architect of the state's effort to bend the contracting rules to Qwest's advantage," wrote Idaho Supreme Court Justice Jim Jones in a 2013 ruling. "[H]e essentially admitted knowing, even before the contract award was made on January 20, 2009, that Qwest would be 'making the connections and providing the broadband' for the Idaho Education Network."

When Owen voided the state's contracts with ENA and Qwest, however, he also voided payments to ENA, which filed a tort claim against the state on March 6, alleging $6 million in damages. Among those named as being involved in or having knowledge of ENA's claims are Otter, Luna, Gwartney and various past and present Department of Administration employees. 

"ENA finds itself in the anomalous position of having undeniably provided valuable services to the IEN, but being denied payment because of the unilateral actions of the State," wrote ENA legal counsel in the claim.

Read the full claim here: 
Meanwhile, IEN has gone offline, and Idaho lawmakers have scrambled to provide individual school districts with emergency funds to connect to the Internet. 

Luna was appointed to the position as head of the Department of Administration in 2011, following the 2010 retirement of Gwartney, whom she served as chief of staff. She served as interim director for about a year.

As director of the department, Luna oversees a variety of state government activities including compliance in rule making, managing insurance and human resources. The department also provides financial services like budget preparation, fiscal analysis and contract management for the state.

"I admire Teresa's tenacity and commitment to doing the right thing," Otter stated in a news release Tuesday afternoon.

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