Originally posted on IdahoEdNews.org.
MOSCOW, ID – In July 2024, the University of Idaho’s $685 million bid for the University of Phoenix was still alive, but not by much.
The U of I still had almost a year to come to terms with the for-profit online university, and win over legislators who had derailed the deal earlier that year. The U of I and Phoenix had no agreement in place, though, and the State Board of Education had given Phoenix permission to listen to other offers.
And meanwhile, the Washington, D.C.-based law firm Nixon Peabody billed the U of I for work on a purchase that would never come to fruition. The firm’s “Idaho/4-3 Financing” invoice was an apparent reference to Four Three Education, the nonprofit the U of I had created to handle day-to-day Phoenix administration.
Nixon Peabody billed the U of I more than $681,000.
Invoices from the U of I — obtained by Idaho Education News, through a public records request — quantify the costs of the failed, high-profile courtship of Phoenix. While heavily redacted, the invoices also shed light on the U of I’s final attempts to close a deal.
The U of I bills us for records, again
On June 9, Idaho Education News asked the University of Idaho for all invoices “relative to the proposed acquisition of the University of Phoenix, from June 19, 2024 to the present.”
Using this round of documents — and invoices received through previous public records requests — we wanted to determine how much the U of I had spent in pursuing the Phoenix purchase. We also wanted to determine whether the $17.2 million “termination fee” paid by Phoenix would cover the U of I’s costs, making the publicly funded university whole.
Based on EdNews’ analysis, the U of I has spent $17 million on Phoenix-related costs.
It cost EdNews $156.99 to find this out.
The U of I billed EdNews to compile, gather and redact the invoices — even though the U of I had already calculated its costs while settling on Phoenix’s “termination fee.”
It’s the third time the U of I has billed EdNews for Phoenix-related invoices.
The U of I’s 2 ½-year pursuit of Phoenix officially came to an end in June, when the two parties jointly agreed to walk away. That breakup essentially took taxpayers off the hook. Phoenix agreed to a $17,244,420.11 “termination fee,” calculated to fully cover the money the U of I spent studying and planning a possible purchase.
The payment appears to have covered the U of I’s costs, making the publicly funded university whole, with a small bit of cushion. According to invoices obtained by Idaho EdNews, the U of I has spent slightly more than $17 million.
EdNews has received invoices through early June — when the U of I’s bid for Phoenix fizzled. And that might not be all-inclusive, university spokeswoman Jodi Walker said in an email.
“The university is in the process of negotiating final invoices from some legal counsel and consultants, as is common at the conclusion of complex transactions such as this,” said Walker, adding that the U of I’s “intended goal” is to bring in costs at or below the $17.2 million paid by Phoenix.
The U of I’s spending slowed since last summer (click here for detailed coverage of what the U of I spent up to the summer of 2024.). However, the university still fronted an additional $2.4 million — with the money going largely to high-powered national law firms, in an attempt to build the framework of a deal.
- Nixon Peabody, with a staff of more than 650 attorneys, provided legal advice on bonding. The firm looked at structuring a mix of tax-exempt and taxable bonds to bankroll the purchase, Walker said.
- McCarter and English — a Newark, N.J.-based law firm boasting a staff of more than 400 attorneys — provided counsel on underwriting and issuing bonds. The firm received about $412,000.
- Husch Blackwell, a firm with more than 1,000 attorneys scattered across more than 20 offices, offered legal advice on “U.S. Department of Education policies and regulations,” Walker said. Its bills came to close to $187,000.
A prominent, controversial partner continued to work with the U of I.
Hogan Lovells, an international law firm, collected an additional $226,000 from July 2024 through April. That brings the firm’s total billings to more than $9.4 million.
Hogan Lovells spent part of the past year on the U of I’s exit strategy. The firm helped negotiate the termination agreement that netted $17.2 million from Phoenix, Walker said.
Hogan Lovells is a huge player — even when compared to the other heavy hitters in the U of I’s ad hoc legal team. The firm hires more than 2,800 attorneys, scattered across five continents.
But it’s U of I President C. Scott Green’s Hogan Lovells ties that raised questions. Green had been the firm’s New York-based chief operating and financial officer until 2019, when he returned to his alma mater as president. EdNews first reported on Hogan Lovells’ Phoenix-related work in February 2024 — and lawmakers later questioned Green on his Hogan Lovells connection during hearings on the Phoenix bid.
The $500,000 Phoenix club
The University of Idaho spent $17 million, and counting, on its University of Phoenix courtship. Much of the money went to a battery of law firms and financing companies.
- Hogan Lovells: $9,440,611.42. The international law firm, and U of I President C. Scott Green’s former employer, served as lead legal counsel on Phoenix.
- Ernst and Young: $1,337,400. The Secaucus, N.J.-based international accounting firm worked on financial due diligence issues.
- Rieth Jones Advisors: $1,252,860.38. The U of I’s “transaction adviser,” based in Columbus, Ohio, with a satellite office in Sun Valley.
- Hawley Troxell: $1,161,191.77. The Boise law firm works extensively on education law, for the U of I and other clients.
- Nixon Peabody: $1,051,390.50. The Washington, D.C.-based law firm worked on structuring bond sales and financing for the proposed $685 million purchase.
- PFM: $944,644.63. A Philadelphia firm that has worked on past U of I bond issues — and worked with Four Three Education, the nonprofit the U of I created to assume day-to-day Phoenix oversight.
- Gjourding Fouser: $529,190.63. A Boise law firm hired by the State Board of Education, after Attorney General Raúl Labrador filed a lawsuit accusing the board of discussing the Phoenix purchase in illegal closed-door meetings.
But not all of the money went to high-priced law firms — illustrating that the U of I was spending time, and money, trying to put out other Phoenix-related fires closer to home.
Nearly $15,000 went to Red Sky Inc., a Boise public relations firm. Like all universities, the U of I has its own in-house public relations team; Walker, a longtime U of I employee, serves as executive director of communications and co-chief marketing officer. Walker said Red Sky was brought in to work on Phoenix-related “public relations strategy.”
Retired state Supreme Court Justice John Stegner’s firm, Stegner Mediation LLC, received $4,770. He was brought in to work on an open meetings lawsuit pitting the State Board against Attorney General Raúl Labrador — who argued that the board’s closed-door Phoenix discussions in 2023 violated state law.
The mediation didn’t make the lawsuit go away.
The only thing that did was the demise of the Phoenix deal. After the U of I and Phoenix stepped away from the bargaining table, Labrador dropped the lawsuit, leaving the open meetings question unresolved.
All of this after the U of I — and now, ultimately, Phoenix — forked over the $4,770 for mediation, and a much larger sum of $529,000 to defend the State Board in court.
Like so much of the $17 million spent on the Phoenix courtship, this money bought no closure.
More reading: Click here for EdNews’ in-depth, award winning coverage of the Phoenix proposal.