In my post on August 24, 2009, I linked to a North Idaho College (NIC) press release which explained the NIC Foundation planned to use several million of our tax dollars (shifted to the Foundation from NIC) to repay the loan to purchase the DeArmond Mill site. One part of the press release noted financing had been secured by a “competitive bid process.”
Not surprisingly, the winner of the competitive bid process was Mountain West Bank, a local bank that just happens to have three of its Directors on the NIC Foundation board. Another Mountain West Bank Director is a business partner with one of the Foundation directors whose wife is on the NIC Board of Trustees. Given those connections, I submitted a public records request to NIC and requested information about the “competitive bid process.”
The photo (left) hints at the response my request received from John Martin, NIC’s Vice President for Community Relations & Marketing.A few observations are appropriate.
First, the $10-$13 million NIC intends to use to repay the Foundation is our money, tax dollars collected by NIC as a taxing entity. Public money will be used by the NIC Foundation to repay the loan, its interest, and its fees. That alone should allow taxpayers to scrutinize the “competitive bid process” used to select Mountain West Bank to finance the deal. Did the Foundation get the best deal possible? Did it even really try?
Second, figuratively speaking, NIC employee Rayelle Anderson looked in her left-side desk drawer (the one labeled “NIC”) and couldn’t find the requested record. Had NIC Foundation Executive Director Rayelle Anderson looked inside her right-side desk drawer (the one labeled “NIC Foundation), she would have found the requested information. That assumes, of course, there really was a true “competitive bid process” as she urged Martin to emphasize in the NIC press release.
Third, Martin’s response would suggest that NIC didn’t really care if the purchase price and the financing arrangement would be the best deal possible for NIC and the taxpayers. NIC’s hands were clean, right? After all, it was the Foundation securing the financing.
Here’s are some questions that every taxpayer in Kootenai County should consider: If NIC can legally use taxpayer dollars to acquire the DeArmond Mill site, why does the NIC Foundation even need to be involved as an intermediary? Why didn’t NIC directly seek voter approval for a bond? Why didn’t NIC directly seek judicial confirmation? Those are the constitutionally and statutorily approved options for doing what NIC wants to do. Yet with two lawful options available, NIC chose option three: The lease-to-buy option that has been repeatedly rejected by Idaho’s appellate courts when the outcome of the process was ownership. Why, then, did NIC choose option three? It’s a good and fair question that has yet to be answered by the principals.
Bill, you are so right. You hit the crux of the matter when you wrote:
And the really big question is then, WHY?
Here are my guesses:
1. The Foundation is a private entity, so the public can’t demand the details of their deal with Mt. West Bank. (Steve Meyer, Mayor Bloem, Mic Armon and many more are on the Foundation)
2. The “clean up” of the mill site is now part of a private transaction between the Stimson lumber company and the private NIC Foundation. No public records need be shared. (And now it’s under a ton of gravel)
This is NOT a clear, responsible public PROCESS!
Comment by mary — August 31, 2009 @ 10:23 am
Can any of you publish the members of the NIC Foundation? Maybe, I am wrong here, but, doesn’t the NIC Foundation operate on federal money through grants? If they work with federal money, how does that make it private organziation? Maybe a FOIA request, instead of a state public record’s request?
Since the NIC foundation is private, do they have a private website? All I can find is some vague stuff on the college site.
Comment by Stebbijo — August 31, 2009 @ 10:59 am
Stebbijo,
Here is a link to the most current annual report for the NIC Foundation on the SoS website. Scroll down past the first page; the second page lists the corporate officers.
As far as I know, the Foundation does not have its own website. Its information is on the NIC website.
Comment by Bill — August 31, 2009 @ 11:17 am
Mary,
My guess is a little less thoughtful. My guess is that they fear a bond vote of the people would not pass. They fear judicial confirmation, because they fear (based on a history of cases in Idaho’s appellate courts) the land acquisition would not meet the two requirements “ordinary and necessary.” Even more, judicial confirmation in front of a district court judge would expose them to questions they would rather not answer under oath with its attendant penalty of perjury. It’s easier to get forgiveness than permission.
If anyone does challenge them in court, the cabal will try to villify and demonize the challengers as being against education. In reality, the “Education Corridor” is not the issue at all. The issue that a court would have to decide is the legality or illegality of the method NIC is using to incur long-term indebtedness or liability. “Education Corridor” is a slick marketing tool being used to try and distract citizen attention away from the apparent illegality of the action. The cabal hopes and prays that a less-than-attentive public will subconsciously adopt the implication of “Education Corridor” and assume the intended outcome is benevolent. In the cabal’s view, a view it hopes the public will adopt, the professed outcome is more important than the legality of the process to achieve it.
Comment by Bill — August 31, 2009 @ 11:24 am
Actually any residual ‘clean up’ of the site is now the responsibility of NIC. That was transferred in the body of the lease contract. Of course if NIC chooses to not renew the lease then that would be abrogated along with the $4 million tax dollars already paid.
There is no way to look at this and not see the blatant intent to manipulate the deal in a very particular direction. Chesrown did not need to be at all involved and he was. The LCDC did not need to be part of the machinations but it were pulled into the design decision making process and was behind the rezoning.
The question I still want an answer to is how can NIC, being a state taxing entity, not be part of a state agency and party to state regulations?
Comment by Wallypog — August 31, 2009 @ 12:21 pm
Wallypog,
NIC is subject to state law. As Gary Ingram pointed out in comments to another post, the AG has basically said that the transactions are civil, contractual, and between parties relying on the advice of their attorney(s). If anyone wants to challenge the legality of what NIC is doing, it will have to be an action brought by a private party, not by the State. Remember that University Place blew up in their faces only because the U of I Foundation sued. It was only after that the AG got involved briefly because of possible criminal misconduct.
(Gary, if I’ve misstated what the AG said, please correct me.)
Comment by Bill — August 31, 2009 @ 12:30 pm
Idaho statute 28-36-105 regarding disclosures required for lease purchase agreements for real property. It requires disclosure in the contract of total option price and the amount and total number of lease/option payments to be made. Does this mean that the NIC Foundation contract to NIC is not properly written?
Comment by Wallypog — August 31, 2009 @ 2:20 pm
Bill, the link to the SOS site for the NIC Foundation members doesn’t work for me. Can you copy the names and post them here for us please? Thanks.
That said, I’ve been told that Steve Meyer, Mayor Bloem and NIC Trustee Mic Armon are all on the private NIC Foundation, along with many others. I’d love to have the whole list published here because they are key to this important decision that impacts the PUBLIC and will cost TAXPAYERS hundreds of millions of dollars before it is complete, but one the VOTERS did not get to decide. I want everyone to know who sits on this Foundation.
Comment by mary — August 31, 2009 @ 3:47 pm
Mary,
Here they are:
President – David Wold
Vice Pres. – Timothy Komberec
Secretary – Priscilla Bell
Treasurer – Michelle Schini Mitchell
Directors: Michael Armon, Sandi Bloem, R. Romer Brown, Mike Chapman, R. James Coleman, Bradley Dugdale, James Eisses, Mark Fisher, Kimbeer Gates, John Goedde, Jon Hippler, Stephen Meyer, Claudia Miewald, David Pelz, Ben Rlphe, C. Richard Sams, Bill Tarnasky, Sue Thilo, James M. Thorpe, Tom Torgerson, Marc Wallace, Josephine Webb, Parker Woodall, and John Young
This information came from the Foundation’s 2008 Annual Report Form submitted by Rayelle Anderson (Executive Director) to the Idaho Secretary of State.
Comment by Bill — August 31, 2009 @ 4:05 pm
I am curious. Does the NIC Foundation offer any profiles/biographies of these directors? Who are they and why are they with the NIC Foundation?
Comment by Stebbijo — August 31, 2009 @ 6:22 pm
Stebbijo,
As far as I know, the Foundation does not offer any profiles or bios of its directors. Your best bet is to Google them. What you find may help reveal their motivation to be with the NIC Foundation.
Comment by Bill — August 31, 2009 @ 6:41 pm
What will it take to awaken citizens to the highly questionable activities of foundations used to subvert the public process and funnel tax monies to special projects? Foundations are not accountable to the public. They hide behind a legal blackout curtain.
Comment by Susie Snedaker — August 31, 2009 @ 6:57 pm
It would be good to publish this list in the newspaper so people can see all the conflicts of interest.
Gary and Bill: Are you saying that the Attorney General cannot do anything or he does not want to do anything?
Comment by citizen — August 31, 2009 @ 8:32 pm
This comment may seem naive to some, but why not ask the NIC Foundation directly for the information that was requested from NIC. It seems to me that a simple phone call to arrange a meeting with Foundation Officers, or a drop in visit or a friendly letter, possibly could result in disclosure of the financing arrangements in question.
While apparently they are not required to respond to a Public Records Request, their silence amplifies the perception that the Foundation is a part of a conspiracy to thwart the protections afforded citizens in Idaho’s Constitution. The damage to their reputation for all the fine work the Foundation has done for NIC over the years is at stake. They may be very willing to avoid the risk of having this perception become embedded forever in Idaho’s history.
Comment by Gary Ingram — August 31, 2009 @ 9:25 pm
Thanks for the concise explanation.
Do you think the Attorney General cannot do anything or will not do anything?
Comment by citizen — September 1, 2009 @ 9:31 am
As I noted earlier Idaho statute 28-36-105 says that any lease purchase agreement must define the total price of acquisition and the total number of payments required to meet that price. This includes contract involving private foundations and government entities. The lease agreement between the Foundation and NIC does not state the total price nor does it define the total number of payments. That is what has left Larry Spencer guessing at these numbers.
I think that the lease-purchase contract is not legal. Would the AG care about that?
Comment by Wallypog — September 1, 2009 @ 10:02 am
How do we get the AG to care….. civil legal action, federal courts, public pressure, political pressure in the primaries? All options seem to involve a high degree of organization.
Comment by citizen — September 1, 2009 @ 10:13 am
citizen,
The only way the AG’s office will “care” ti become involved is if you file a complaint locally and it gets the attention of the prosecuter. That prosecuter then has to ask for assistance from the AG’s office.
If you believe state law has been violated – you can cover yourself by filing both complaints with the county and the city. You can also publish it. If nothing works, you have to file your own lawsuit.
If I am wrong on this – correct me.
Comment by Stebbijo — September 1, 2009 @ 10:26 am
It is important to be fully informed when posting. It is not a matter of the AG “caring”. We are talking about proper procedures. The correct steps must be followed. The AG is not there to make law. It is there to enforce the law as it stands. It would result in total chaos if the AG opened a file on every complaint or perceived wrong that is put before it. Civilization needs rules and procedures. It is unfair to insinuate that any legal body doesn’t “care”. It is more effective and efficient to follow procedure. And that procedure requires facts. Because we may not like something, doesn’t mean that it is illegal. Without facts, nothing is accomplished.
And I might add, without facts, any civil lawsuit filed would be dismissed as frivolous.
Comment by Faringdon — September 1, 2009 @ 1:31 pm
Faringdon,
While you are correct about needing facts, I don’t want to leave readers with the impression that private citizens must bear the burden of proving guilt beyond a reasonable doubt before approaching law enforcement. If citizens have sufficient evidence to demonstrate probable cause, that should be sufficient for an investigation to be considered. Probable cause is a reasonable ground to believe a crime or offense against the state has been committed. Probable cause amounts to more than mere suspicion but less than evidence justifying a conviction. The more timely, verifiable, and relevant facts the citizens present, the more solid the probable cause to officially investigate becomes. An investigation can be considered without actually “numbering up,” launching a formal investigation.
Comment by Bill — September 1, 2009 @ 3:01 pm
Absolutely Bill. I didn’t mean to imply that one had to have an airtight case before filing. But neither can one use guess work. Your use of “sufficient evidence” is spot on. That is opposed to the “I think” or “it seems” school of thought. My point (and apparently I wasn’t as clear as I should have been) was that it is wrong to accuse or insinuate that a body, in this case the AG, doesn’t care or isn’t interested or is looking the other way. Our system is meant to work in a civil manner. That means proper procedure. Blanket accusations of malfeasance without a scintilla of proof, disturb me.
A huge gripe of mine is TV. Too many people’s idea of the law comes from watching TV legal programs. And they are so far from reality as to be pure fiction. Have you ever noticed that attorneys never mention their fees on those programs. Anyway, considering legal action should come only after total due dilligence. Real life problems can’t be solved in an hour…less commercials!
Comment by Faringdon — September 1, 2009 @ 4:16 pm
Faringdon – why does TV gripe you re: legal programs? Are you connected to the legal system? You obviously know reality from fiction. Are you an attorney? Can you disclose this?
Comment by Stebbijo — September 1, 2009 @ 5:16 pm
Allow me to ask. The Idaho statute reads that certain disclosures must be made in any lease to purchase contract. Key disclosures are not made in the L-P contract between the Foundation and NIC. Is that not sufficient enough to warrant some investigation by some level of authority?
Comment by Wallypog — September 1, 2009 @ 6:57 pm
Wallypog, I agree.
Comment by citizen — September 1, 2009 @ 7:21 pm
One reason I am down on the AG is the harm done to our open meeting laws and the slap on the wrist to the CdA LCDC for non-disclosure issues.
I look for patterns.
Comment by citizen — September 1, 2009 @ 7:25 pm
Wallypog –
… this is all kind of new to me. You stated “disclosures are not made in the L-P contract between the Foundation and NIC.
What does L-P stand for?
Comment by Stebbijo — September 1, 2009 @ 7:44 pm
Wallypog,
I apologize for not answering sooner, but I wanted to read and understand that statute and section better.
That specific statute seems to be oriented toward the Uniform Commercial Code. Typically the UCC regulates transactions involving movable property, intangible property, and fixtures. Real property transactions are covered by different laws in the jurisdictions involved. So to your specific question, the statute you cited would apply to a lease-purchase agreement for personal property like a car or a television or a sofa but not necessarily to real property.
The Idaho Constitution and statutes prescribe the procedures that entities such as NIC must follow when incurring long-term liability and debt. It appears to me that NIC has not followed those procedures in purchasing the DeArmond Mill site property.
Comment by Bill — September 1, 2009 @ 7:54 pm
Stebbijo,
L-P probably refers to lease-purchase or lease-to-buy.
Comment by Bill — September 1, 2009 @ 7:58 pm
Never mind – Bill got it for me –
lease-purchase.
Comment by Stebbijo — September 1, 2009 @ 7:58 pm
Bill, if you read the entire section it states elsewhere that personal property can be exempt from some these lease purchase contract provisions. In this particular statute it does not identify ‘personal property’ suggesting that is must be related to real property.
Admittedly, I do not wholly understand how these laws are organized. It is also very hard to research the silly things (at least for me). I cannot imagine that if this particular statute in not pertinent to real property that somewhere in that quagmire sits the legal disclosures definitions which do apply.
On the face of the issue could you imagine any form of purchase contract that does not clearly define the purchase price and payment schedule? Other than a clear attempt to obfuscate this data it just does not make any sense at all. NO prudent buyer would ever sign such a contract and I would think it would be next to impossible to enforce. It is possible that some attachments to the contract were not made available for public eye.
If you do approach the Foundation for information see if they would be so kind as to provide copies of the loan contract and the closing statement for the purchase transaction. Here again is another fuzzy area. The public is being held to accommodate contracts for a private foundation that does not come under the freedom of information act. The public is being held responsible for contracts it has no access to see or review. Legal??? It is the intent to hide very pertinent information and it is as obvious as a 15 day old dead fish sitting in our laps.
Comment by Wallypog — September 2, 2009 @ 6:25 am
Wallypog,
I think your underlying question was the right one: Was the lease-purchase agreement between NIC and its Foundation lawful? That would have to be decided by the court.
Why don’t you approach the Foundation and ask for the specific information you would like? Any citizen has much authority to ask for that information as we do.
Comment by Bill — September 2, 2009 @ 6:42 am
Wallypog, Bill’s suggestion is what I recommended on post #14. For starters,if you know any individual members of the Foundation, ask them, as many as you know. Perhaps these questionable financing practices have been exclusive to a select group within the Foundation. Maybe some of the other excluded members should be prompted to start asking the same questions.
Comment by Gary Ingram — September 2, 2009 @ 10:27 am