Idaho’s own corporate cover-up

Editorial from the Idaho Mountain Express

Smoothies at the Idaho State Tax Commission seem to regard the public as undeserving rubes who just fell off the turnip truck.

Why else the full-fledged commission cover-up to conceal paperwork involved in handing out a major tax break to a Wall Street corporation?

Not everyone has accepted this finger in the eye. The Idaho Statesman has wisely sued to force the commission to open tax-exemption paperwork involving Cabela’s, a giant retail and catalog sports gear corporation, whose online Internet sales were generously exempted from Idaho sales taxes with a blatantly deceitful description that minimized Cabela’s “presence” in Idaho.

It’s a familiar smokescreen the commission is using for handing out favors to big business—claiming that disclosing Cabela’s financial data would reveal proprietary information to competitors.

Hogwash. The Boise newspaper doesn’t even want financial data, just Tax Commission papers justifying the exemption.

Cabela’s is a $2 billion, shareholder-owned corporation listed on the New York Stock Exchange, whose 2006 annual report also is online—all 114 pages with minutia about sources of income and how much, liabilities and how much, and, yes, income taxes and how much, among other things.

What’s the State Tax Commission hiding that it considers privileged? Has Cabela’s told it something that it won’t tell shareholders in its government-required annual report?

If Cabela’s shareholders, the NYSE, the Securities and Exchange Commission and financial media know the company’s financial situation, what else went on in those secret deliberations?

Editorial from the Idaho Mountain Express

Court case should reveal new tenets of record law

From the Times-News

Observe carefully how the Idaho Supreme Court decides a case involving improper e-mail messages between two public employees. Pay even closer attention to how the court rules on a financial settlement related to the same matter.

Those issues of the public’s right to observe government are central to the case involving The Spokesman-Review newspaper of Spokane, Wash., and officials in Kootenai County. The ruling is expected this summer and could have far-reaching implications for government agencies throughout Idaho.

Supreme Court justices heard arguments last week on the dispute involving Kootenai County Prosecutor Bill Douglas, former Juvenile Drug Court Supervisor Marina Kalani, and hundreds of e-mails written between them.

The case is an appeal from a July 2005 ruling by 2nd District Judge John R. Stegner. The Spokesman-Review sued to see the e-mail records in order to investigate the drug court’s demise, and whether it was tied to an inappropriate working relationship between Douglas and Kalani.

When the drug court was dissolved, Kalani filed a claim against the county and got a $70,000 settlement through the Idaho Counties Risk Management Program. ICRMP is an insurance payout system funded by taxpayer money. It has funded similar settlements reached in southern Idaho counties.

Stegner ruled in favor of the newspaper for public access to the e-mails under Idaho’s Public Records Law. Kalani appealed and her lawyer argued that the e-mails were personal in nature, and warranted exemption from the law.

That’s a feeble argument when the officials worked on public time using computers bought on the public’s dime. Stegner’s ruling should send a message to other local and state officials that the electronic age does not exempt them from public record laws. E-mail expedites government transactions, but messages sent are still subject to public disclosure.

Yet the same public record laws are more intricate with the actual settlement. Stegner ruled the Kootenai County settlement with Kalani was a public document because it involves public business and payout of public funds. But state laws only require that “statistical data and actual amounts paid” be released to the public.

The judge called that language the equivalent of a poke in the public’s eye.

“Should public records such as this be exempt from disclosure, the public’s ability to monitor actions of agencies like ICRMP and to be aware of how public funds are expended by this agency would be seriously curtailed.”

Fast-forward to this month’s arguments before the justices, and it’s easy to see the relevance to all local government. The question of whether e-mails are public records should be a soft pitch for the high court. But if the ruling to seal settlement terms is also reaffirmed – all because of terse language in state laws – it points to a larger fight.

When courts can’t force government to reveal information directly related to the use of taxes, legislative remedies should be necessary. Taxpayers finally deserve a right to see how and why their funds are spent on surreptitious legal deals.

From the Times-News

Otter’s water summit should be open to all

Editorial from the Idaho Statesman

No public resource is more important to Idaho than water.

It’s unacceptable, then, for Gov. Butch Otter to plan nearly half a day of closed meetings at his water summit next week. It’s also troubling to see a guest list heavy on traditional rural water users and skimpy on the urban interests that will reshape Idaho water use in the future.

A public resource should be discussed in an all-inclusive public forum, not in what an Otter news release describes as a series of “closed-door caucuses and private discussions.”

There’s nothing illegal about the closed meetings. Otter and his tightly structured group of invitees — 18 active negotiators and 20 “alternates” — do not comprise a public agency, so the Idaho Open Meeting Law does not apply.

However, there’s a considerable difference between what’s legal and what’s good policy. Closed sessions invite skepticism. The itinerary — closed meetings, sandwiched by public sessions in the morning and late afternoon — suggests the open meetings are window dressing, with the real discussions held behind closed doors.

In a sense, the closed sessions are the guts of the summit, scheduled for Tuesday in Burley. The closed meetings will allow water users to hold “frank discussions” about stretching a scant water supply in 2007, interim state Department of Water Resources Director David Tuthill said Tuesday.

“Those solutions are urgently needed,” he said. “There presently is not enough water for all uses.”

This water is not private property, however — as closed negotiations imply.

Another problem transcends this year’s crisis. Otter’s invitation-only process gives short shrift to urban and industrial users, demands that will grow as Idaho grows.

Otter’s guest list skews heavily to rural water users and ag groups, with some local elected officials and staffers and utility reps in the mix. Tuthill says the summit will involve groups that are new to the water debate. Still, of the 38 negotiators and alternates, only three come from Ada County, and none come from Canyon County.

This is, make no mistake, a rural summit. This may adequately represent the current demand for water in a state where ag accounts for 87.8 percent of use. This also represents the current struggle, pitting Idahoans who hold old rights for canal and spring water against Idahoans who hold newer rights to water from the Eastern Snake Plain Aquifer.

It takes no imagination and little foresight to see that the next round of water wars could center on the tension between rural and urban use. Otter need only look to the south, where a 280-mile pipeline is proposed to meet Las Vegas’ ever-expanding municipal thirst, and Utah is seeking a 120-mile pipeline to water the growing city of St. George.

Closed caucuses between current water users do little to instill public trust — and do little to prevent another round of contentious water battles in the future.

Editorial from the Idaho Statesman

Simpson asked to step down from case

From the Post Register

A former Melaleuca Inc. employee being sued by the company said he won’t get a fair trial if District Judge Darren Simpson remains on the case.

In court documents filed Friday, Jeff Wasden said the judge should be disqualified from the case because Melaleuca CEO Frank VanderSloot publicly and financially supported Simpson’s successful effort to knock off sitting Judge James Herndon last year.

“The financial and public support of Melaleuca was instrumental in obtaining the results of Judge Simpson being elected,” say the documents filed by Wasden’s attorney, Ron Swafford. “It is my firm opinion and belief that unquestionably Judge Simpson feels gratitude toward Frank VanderSloot and Melaleuca.”

VanderSloot and his wife,

Belinda, through donations to an anti-Herndon group called Citizens for Justice and through direct payments for advertising, spent nearly $16,000 to help Simpson win office.

VanderSloot said Friday that he believes Simpson would do a good job on his case but can see where people might have concerns. It might be better for everybody, VanderSloot said, if Simpson walked away.

“I think there could be a perception of unfairness,” VanderSloot said. “I wouldn’t want that for the judge or for us.”

Melaleuca’s attorney, Curt Thomsen, said he doesn’t care who the judge is.

“I’ll be happy to have Judge (John) Shindurling,” Thomsen said. “I don’t care. We weren’t judge shopping in the first place.”

The decision rests completely in Simpson’s hands.

Both sides in a civil suit can disqualify one judge for no reason.

But both sides have already used their free pass in this case. Wasden disqualified District Judge Greg Anderson last month, and Melaleuca disqualified District Judge Richard St. Clair earlier this month.

Friday’s motion adds to what is already a complex case.

Wasden was formerly Melaleuca’s vice president of marketing. The company claims in its suit that Wasden violated a separation agreement by recruiting key employees. Wasden denies this and in a counter claim, accused the company of breach of contract and VanderSloot of defamation.

Melaleuca has asked the court to seal all documents in the case because “it is highly likely that (Wasden) will file documents with this Court, give deposition testimony, and in other ways divulge and make (Melaleuca’s) sensitive, confidential and proprietary information a matter of public record,” the company said Tuesday in a motion.

Simpson is scheduled to hear arguments on this issue Tuesday.

Also scheduled for discussion on that day is a temporary restraining order issued March 22 by Shindurling that prevents Wasden from disclosing confidential information “regarding Melaleuca or its products” to any third parties, including current or former Melaleuca employees.

That order is good for 14 days from the day it was issued. Melaleuca wants it made permanent. Swafford said the ruling is so “broad and obscure” that it’s impossible to know what is considered confidential and that it prevents his client from speaking to witnesses about his case.

From the Post Register

Judge bows out of case

From the Post Register

District Court Judge Darren Simpson on Monday removed himself from a case involving his primary benefactor during last year’s election.

Melaleuca Inc. is suing its former vice president for marketing, Jeff Wasden, for allegedly violating a separation agreement by recruiting key employees.

Wasden denies the charge and in a counter claim has accused his former employer of breach of contract and Melaleuca Chief Executive Officer Frank VanderSloot of defamation.

On Friday, Wasden filed court documents asking Simpson to leave the case.

Wasden said that because VanderSloot publicly and financially supported Simpson’s campaign, he wouldn’t get a fair trial.

On Monday, three days after Wasden asked him to step down, Simpson initiated a conference call between Melaleuca’s attorney, Curt Thomsen, and Wasden’s lawyer, Ron Swafford.

At that time, Simpson told the lawyers he would leave the case.

According to Swafford, Simpson said the appearance of impropriety compelled him to step down.

Simpson, through his secretary, confirmed Monday that he had left the case but said he didn’t have time to answer questions, such as whether the move sets a precedent that will keep him from ever presiding over a case involving Melaleuca or VanderSloot.

VanderSloot on Friday said he thought Simpson would do a good job but that he could see where people might have concerns about the judge remaining on the case.

Campaign finance records show that VanderSloot and his wife, Belinda, spent nearly $16,000 in helping Simpson defeat incumbent James Herndon.

Seventh Judicial District Trial Court Administrator Burton Butler said Monday that the case had been transferred to District Judge Brent Moss.

Several key issues in the case were scheduled to be addressed today in a hearing. But Deputy Clark Angie Wood said Monday that the hearing would very likely be postponed.

Melaleuca is asking the court to seal all documents in the case. Also, a temporary restraining order that prevents Wasden from disclosing confidential information about the company or its products is set to expire this week.

Melaleuca wants the order made permanent. Swafford said it prevents his clients from speaking to witnesses about his case.

Government reporter Corey Taule can be reached at 542-6754.

From the Post Register

Public trust on trial

Editorial from the Post Register

As important as open courts are to the public, the issue is even more vital to eastern Idaho’s judicial system. Credibility is one commodity eastern Idaho courts can ill afford to lose.

At issue is Melaleuca’s attempt to cut off public access to its legal dispute with its former vice president for marketing, Jeff Wasden. Melaleuca is concerned Wasden may disclose trade secrets in the proceedings. The company has every right to protect proprietary information.

But Melaleuca is asking Judge Brent Moss of Rexburg for an order “sealing the court’s entire file and closing all courtroom proceedings to the public.”

That’s taking a meat cleaver approach to a situation requiring surgical precision, a case-by-case review rather than a blanket order. Imagine if Moss grants the motion: How would you ever open the proceedings later on? Would you learn how this case turns out? How much trust would you have in any trial you can’t attend and in which the case files become a state secret?

Past Supreme Court rulings on the topic lead to a pair of themes: People have a right to open courtrooms. Openness is a check on arbitrary courtroom decisions. And the courts need the public’s trust. Secret star chambers erode that confidence. These interests are mutual.

This is a symbiotic relationship. Our system of government depends on it. The courts are a bulkhead against misbehavior — from other branches of government, from private individuals and from organizations. If people lose confidence in the system’s transparency and impartiality, if they come to believe the system plays favorites or makes decisions in private, the courts lose their moral authority.

Sadly, eastern Idahoans have experienced that loss of faith. Without this newspaper’s investigation and legal efforts to pry open a pair of sealed Bonneville County files, the efforts of local Boy Scout officials to conceal sexual abuse of Scouts by camp staff members would have prevailed.

Former Idaho Falls Prosecutor Kimball Mason is going to serve at least four years in prison for stealing guns from the Idaho Falls Police. It’s the rare prosecutor who gets in trouble, let alone ends up convicted of not one but two felonies and is sent to prison for it.

And that happened right here in the 7th Judicial District.

So as he takes up the Melaleuca motion, Judge Moss will be serving his profession’s own interests best by serving yours.

Marty Trillhaase

Case facts

Melaleuca’s motion asking for an order “sealing the court’s entire file and closing all courtroom proceedings to the public” was to be heard Tuesday — but was delayed when Seventh District Judge Brent Moss of Rexburg took over.

Judge Darren Simpson of Blackfoot stepped down after Wasden’s lawyers argued he’d been compromised. Simpson’s successful 2006 race against former Judge James Herndon got a $16,000 assist from Melaleuca CEO Frank VanderSloot and his wife Belinda.

Moss is the fourth judge assigned to the case. Lawyers for former Melaleuca Vice President for Marketing Jeff Wasden exercised their right to disqualify District Judge Greg Anderson. Next assigned to the case was District Judge Richard St. Clair, and Melaleuca’s attorney’s moved to remove him from hearing the case.

Editorial from the Post Register

BW LOSES OPEN RECORDS DECISION

From the Boise Weekly

By Shea Andersen

The Boise Weekly’s efforts to open a sealed state investigation into Intermountain Hospital have stalled, for now, after a ruling from District Court.

In a ruling issued late Tuesday, Judge Michael McLaughlin ruled against the Idaho Department of Health and Welfare, and BW, both of whom had resisted a move to seal the state’s records of its investigation into the conduct of the troubled psychiatric hospital.

BW has yet to decide whether it will appeal the decision, according to publisher Sally Freeman.

Deputy Attorney General Robert Luce, who represents the Idaho Department of Health and Welfare, was not immediately available for comment.

“I am surprised by the decision,” said David Gratton, BW’s attorney from the firm Evans, Keane LLP. “The people of the state should be entitled to information the state gathers relative to the conduct of people licensed by the state.”

At question is whether an investigation into the operations of Intermountain Hospital’s residential teen care unit is a public record. BW had requested a copy of the investigation’s findings in December, under the Idaho Open Records Act. According to the Idaho Statesman, that newspaper and KTVB Channel 7 made similar requests.

Intermountain, located at 303 N. Allaumbaugh, is Boise’s only private psychiatric facility. Over several years it has been the subject of numerous complaints for understaffing, patient assaults on staff and fellow patients, medication errors, inappropriate discharges for financial reasons and, in one case settled out of court, the wrongful death of a teenage patient (BW News, “A Gathering Storm, 08/02/2006). The most recent incidents involved what adolescent patients and their parents referred to as a “riot” that required intervention by Boise police. Intermountain has temporarily closed the unit.

When they began their investigation, Health and Welfare spokesman Ross Mason confirmed that Intermountain’s violations are potentially serious enough to put its licensure into question.

Within a month, Intermountain had filed a complaint in District Court to keep those documents closed. They won a temporary restraining order from District Judge Joel Horton, who agreed with Intermountain that release of the investigation’s records would result in “immediate and irreparable injury, loss or damage.” Judge Horton, who has since recused himself from the case, ordered all records of the case sealed.

At the hearing last week, Intermountain attorney Mark Peterson told Judge McLaughlin said the investigation contained sensitive information about patients and staff, and should remain closed.

“Intermountain feels an obligation to do what it can to see that these records are protected,” Peterson said.

Peterson also said release of the documents could have a “chilling effect” on any such hospital’s desire to seek an operating license with the state of Idaho.

From the Boise Weekly

Boise crowd learns about public records, open meetings

(Boise) – Attorney General Lawrence Wasden teamed up with Idahoans for Openness in Government (IDOG) and the Idaho Press Club on March 14, 2007 to help educate people about what is covered—and what is not—by the state’s public records and open meetings laws. The lively, interactive session drew a crowd including lots of members of the working press, along with local officials, their staff and ordinary citizens.

The workshop coincided with Sunshine Week (March 11-17), a non-partisan initiative that seeks to enlighten and empower people to play an active role in their government at all levels, and to give them access to information that makes their lives better and their communities stronger.

The three-hour workshop presented the public records and open meeting laws in a no-legalese format, complete with interactive, audience-participation skits that helped illustrate the do’s and don’ts of complying with these two important laws. The session ran from 6 to 9 p.m. in the Hayes Auditorium at the Boise Public Library.

“This collaborative effort with local government, IDOG and the Idaho Press Club continues the long-standing tradition of the Office of Attorney General working to educate Idahoans about our state’s open meeting and public records laws,” Attorney General Wasden said.

Wasden, Deputy Attorney General Bill von Tagen and IDOG President Betsy Russell conducted the seminar, which was co-sponsored by the Idaho Business Review and the Idaho Statesman.

Part of a statewide series, funding for the workshop comes from the National Freedom of Information Coalition through a grant from the John S. and James L. Knight Foundation.

Russell said, “Our purpose is to foster open government, supervised by an informed and engaged citizenry. We all benefit when the public, the media and government officials are fully aware of the public’s rights to access government information and observe the conduct of the public’s business.”

Radio’s Trish and Halli get First Amendment protection

From The Idaho Falls Post-Register

The FCC announced Monday it was granting license renewal to KID-AM 590, overruling objections to comments made by Trish Oak and Halli Stone while on the air.

Mar 13,2007 – PAUL MENSER – IDAHO FALLS POST REGISTER
Trish Oak and Halli Stone left the airwaves more than a year ago, but a shadow they left hanging over their radio station, KID-AM 590, was not dispelled until Monday.

That’s when the Federal Communications Commission announced it was granting KID’S license renewal application, overruling objections that were filed in summer 2005.

Idaho Falls residents Seth and Andrea Grover and Kevin Murray, and then-Idaho House Speaker Bruce Newcomb had filed complaints about comments Oak and Stone made on their afternoon radio talk show.

But the often-controversial duo, which left the air in January 2006 in favor of nationally syndicated talk show host Laura Ingraham, had the protection of the First Amendment of the U. S. Constitution.

“I think that just vindicates the content of our program and our right to express our opinions, which is what the program was all about,” Stone said Monday.

Andrea Grover, a member of the Post Register Readers Advisory Board, told the FCC that the two sisters attacked her after Grover wrote a newspaper piece expressing her distaste for what she considered ostentation at the 2005 inauguration of President Bush.

In his complaint, Seth Grover called their programming “psycho-conservative garbage,” and Murray complained the two went overboard with their views.

Newcomb said he filed his complaint in objection to on-air comments about several people, but that he was particularly upset by comments that he thought impugned the character of state Sen. Bart Davis and showed insensitivity with regard to the 2003 shooting death of Davis’ son Cameron.

In its letter to everyone with objections, the FCC’s Audio Division Media Bureau chief, Peter H. Doyle, said the comments were protected by the First Amendment, the Communications Act of 1934 and the FCC’s rules.

“The role of the commission in overseein program content is limited,” he wrote. Although it enforces statutory prohibition on the broadcast of o g scene, indecent and profane material, “(The) Commission may not regulate the type of material about which the objectors have complained.”

The FCC renews the licenses of all radio stations in the United States every eight years. Had there been no objections, the renewal would have gone into effect Oct. 1, 2005.

“Anytime there’s a dispute, they do postpone renewal of a license until it’s investigated,” said Neica Kinney, eastern Idaho station manager for Clear Channel Communications, which owns KID-AM 590 and several other radio stations.

Those stations are part of a pending sale to Blue Point Media, an Illinois company that announced in February its intention to buy 22 FM, 13 AM and six translator stations in the Midwest and Mountain West. The $45.7 million sale won’t be final until the FCC has signed off on it.

Informed Monday of the FCC’s decision, Andrea Grover said she has no beef with KID-AM 590 now that Oak and Stone are off the air.

“That was my only concern with the station,”she said.

From The Idaho Falls Post-Register

Grant helps open government project

From the Associated Press

By JOHN MILLER
Associated Press Writer

BOISE, Idaho (AP) _ To open or not to open government, that is the question Shakespearean actors may soon help answer.

Idahoans for Openness in Government last month won a $30,000 national grant to enlist the Idaho Shakespeare Festival troupe in a new video on state laws meant to keep the public’s business public.

The group includes journalists, law professors and state officials and was formed in 2004 to educate the media and public officials about Idaho’s open meeting and records laws. The grant came in time for Sunshine Week, a nationwide effort to draw attention to the public’s right to know.

”People who work in government have a lot of questions about open government, open records and the media,” said Betsy Russell, IDOG president and a reporter at the Spokesman-Review newspaper. ”That’s what we need: Everyone to know what the laws are, and to know how to comply with them.”

The open meeting law was enacted in 1974 and lawmakers passed an open records law in 1990.

And in three years, IDOG and Attorney General Lawrence Wasden have partnered on a dozen seminars around the state on open government issues, helping reduce confusion.
Still, questions regularly arise about how the laws should be applied, Russell said, and the new DVD will allow the group’s message to reach more people.

The money for the production comes from the National Freedom of Information Coalition, through the John S. and James L. Knight Foundation.

Idaho Public Television will help produce the videos, to highlight issues now bedeviling local elected officials, the courts and the state Legislature.

For instance, there’s an ongoing Supreme Court battle over an illegal private meeting by the Ada County Commission in 2005. This lent momentum to a proposed law change in the 2007 Legislature.

Meanwhile, in Boise County, in the mountains north of Boise, foes of a large subdivision plan sued the county commission last year, alleging it illegally barred them from a July meeting where the development was approved.

And in September, members of the Teton County Commission in eastern Idaho agreed to fines of $75 _ half the maximum penalty _ after meeting secretly in May.
Though that case was resolved, concerns over openness and local government ethics affected the outcome of the 2006 election, said new Commissioner Larry Young, who ousted one of the incumbents.

”The one violation was maybe just the last straw,” Young told The Associated Press. ”An amalgamation of things can poison the public perception. We’re not talking about national security. This is county government, which should be the people’s business.”

Idaho’s open meetings law obligates Wasden as the attorney general to enforce it for state government. Also, he’s often called in to prosecute cases such as the one in Ada County that so far has cost taxpayers more than $30,000 in legal fees. Commissioners there are fighting paying fines of as much as $150.

But it isn’t just local government that sometimes struggles with the law’s nuances, said Wasden.

He also fields queries from reporters, he said.

”A lot of media folks are coming in from other states, and while they may be familiar with the federal Freedom of Information Act and open records provisions of other states, they don’t know Idaho’s,” Wasden said.

Aides in Wasden’s office say they had received two to three inquiries per week about possible open-meetings or open-records violations before the IDOG seminars began three years ago. Now, it’s down to about one per month, said AG spokesman Bob Cooper.

Wasden will be featured along with the Shakespearean actors in the upcoming DVD.

The open-records group’s leaders say the production will include examples of what the state’s laws permit and forbid, storytelling, commentary _ and where the public can turn for resources should they feel they’ve been wronged by a violation.

”It’s a combination of vigilance and education,” said Elinor Chehey, a board member from the League of Women Voters in Boise. ”People are interested in seeing things happen out in the open.”

From the Associated Press