2008 Woodie Awards
Nixon investigating MOHELA for sunshine law violation
Missouri attorney general says state agency may have broken meeting law; Luebbert testifies at hearing
By: Andy Dierker
Issue date: 2/23/06 Section: News
Missouri Attorney General Jay Nixon announced his intention Feb. 14 to sue the board of the Missouri Higher Education Loan Authority under the state's Sunshine Law. According to a press release from Nixon's office, the lawsuit will claim the board violated Missouri law when they failed to adequately solicit public opinion as they decided to sell a portion of the authority's assets in late January.
Karen Luebbert is the chairperson of the MOHELA board, as well as vice president and executive assistant to the president at Webster University. She said she could not comment on the suit, as it is a legal matter.
According to the Missouri Open Meetings and Records Law, public governmental bodies and "quasi-governmental bodies," such as MOHELA, must post adequate notice of meetings and provide a forum for the public to voice their concerns. Nixon alleges this criterion wasn't met.
"The public was not given the opportunity to learn of MOHELA's proposal until it was suddenly announced on Jan. 31," Nixon said. "Public business, particularly that of this magnitude, cannot be done in secret."
MOHELA, a nonprofit provider of low-cost student loans, was created in 1981 by a law passed in the Missouri General Assembly. This law specifically requires its meetings to be open to the public, with 24-hour notice posted and available.
Before announcing the filing of a suit, Nixon held a hearing on Feb. 9, where MOHELA's Karen Luebbert answered questions regarding the agency's decision and the way it went about making it.
Luebbert indicated during the hearing that the decision to sell off a portion of the agency's loan assets was a reaction to Governor Blunt's original plan, proposed Jan. 24, that MOHELA be sold altogether. The money from the sale would have been used to fund his Lewis and Clark Discovery Initiative, a program that uses state funds to subsidize building projects at public colleges and universities.
MOHELA's board held an executive session Jan. 24 to discuss the sale proposal.
"Part of the executive session was personnel related. Beyond that, the board formulated a resolution," Luebbert said during the hearing. "(That resolution) shows the desire of the board to work with the Governor in an effort to, as many of the board members said, strike a balance."
In the days following Blunt's announcement, Luebbert and others at MOHELA devised a plan to keep the agency intact.
"We believe it's important for MOHELA to continue its existence," Luebbert said in an interview after the hearing. "The governor did propose a plan to sell all of the assets of MOHELA. We worked with the governor's office to develop a plan whereby MOHELA could remain in existence to serve the students of Missouri."
The way in which the agency worked with the governor's office is one the problems, according to Nixon. A series of phone calls made by the MOHELA board to each other and to Governor Blunt may have also violated the state's Sunshine Law.
Webster's Director of Financial Aid Jon Gruett, who opposes both plans to sell off MOHELA's assets, said the agency's success probably played a factor in their being targeted by the Blunt administration.
"I suspect they were doing very well, and that's why they became an attractive source of funding," Gruett said.
Gruett said besides keeping MOHELA alive, he doesn't see how this move benefits the agency.
"They just did this to survive," Gruett said. "In the original deal, MOHELA would cease to exist."
MOHELA CHANGES: A TIMELINE
January 19th: According to Board Chairwoman Karen Luebbert, rumors begin circulating of a possible MOHELA sale by Governor Blunt.
January 24th: MOHELA officials meet to discuss the rumors of a sale, and what the agency could do to meet the governor's goals and still remain intact.
January 26th: Blunt unveils his plan to sell MOHELA to a private company for around $425 million to fund building projects at public colleges and universities.
January 27th: MOHELA officials receive a call from the governor's office asking if they had a counterproposal. Luebbert said they did, based on the ideas discussed in the Jan. 24 meeting.
January 28th: Luebbert calls board members to alert them that the governor's office had called, and that they had submitted a proposal to sell off some of the agency's loan portfolio to fund Blunt's initiatives.
January 30th: MOHELA officials learn that Blunt is "favorably disposed" to their counterproposal, and would like to hold a press conference the next day at 11 a.m. A notice of the meeting is posted around 10:30 a.m., according to Luebbert.
January 31st: MOHELA holds a board meeting at 10:45 a.m. where the members agreed to sell off $450 million of the agency's loan portfolio. No one from the press or public attended. A press conference is held around 11:15 a.m. to announce the agreement.
February 9th: Attorney General Jay Nixon holds a public hearing on the proposed sale and transfer of the agency's assets to the state. Roughly 75 people attended and listened to testimony from Luebbert and MOHELA CEO Raymond Bayer.
February 14th: Nixon announces his attention to sue the board of MOHELA for violation of the state's Sunshine Law.
Karen Luebbert is the chairperson of the MOHELA board, as well as vice president and executive assistant to the president at Webster University. She said she could not comment on the suit, as it is a legal matter.
According to the Missouri Open Meetings and Records Law, public governmental bodies and "quasi-governmental bodies," such as MOHELA, must post adequate notice of meetings and provide a forum for the public to voice their concerns. Nixon alleges this criterion wasn't met.
"The public was not given the opportunity to learn of MOHELA's proposal until it was suddenly announced on Jan. 31," Nixon said. "Public business, particularly that of this magnitude, cannot be done in secret."
MOHELA, a nonprofit provider of low-cost student loans, was created in 1981 by a law passed in the Missouri General Assembly. This law specifically requires its meetings to be open to the public, with 24-hour notice posted and available.
Before announcing the filing of a suit, Nixon held a hearing on Feb. 9, where MOHELA's Karen Luebbert answered questions regarding the agency's decision and the way it went about making it.
Luebbert indicated during the hearing that the decision to sell off a portion of the agency's loan assets was a reaction to Governor Blunt's original plan, proposed Jan. 24, that MOHELA be sold altogether. The money from the sale would have been used to fund his Lewis and Clark Discovery Initiative, a program that uses state funds to subsidize building projects at public colleges and universities.
MOHELA's board held an executive session Jan. 24 to discuss the sale proposal.
"Part of the executive session was personnel related. Beyond that, the board formulated a resolution," Luebbert said during the hearing. "(That resolution) shows the desire of the board to work with the Governor in an effort to, as many of the board members said, strike a balance."
In the days following Blunt's announcement, Luebbert and others at MOHELA devised a plan to keep the agency intact.
"We believe it's important for MOHELA to continue its existence," Luebbert said in an interview after the hearing. "The governor did propose a plan to sell all of the assets of MOHELA. We worked with the governor's office to develop a plan whereby MOHELA could remain in existence to serve the students of Missouri."
The way in which the agency worked with the governor's office is one the problems, according to Nixon. A series of phone calls made by the MOHELA board to each other and to Governor Blunt may have also violated the state's Sunshine Law.
Webster's Director of Financial Aid Jon Gruett, who opposes both plans to sell off MOHELA's assets, said the agency's success probably played a factor in their being targeted by the Blunt administration.
"I suspect they were doing very well, and that's why they became an attractive source of funding," Gruett said.
Gruett said besides keeping MOHELA alive, he doesn't see how this move benefits the agency.
"They just did this to survive," Gruett said. "In the original deal, MOHELA would cease to exist."
MOHELA CHANGES: A TIMELINE
January 19th: According to Board Chairwoman Karen Luebbert, rumors begin circulating of a possible MOHELA sale by Governor Blunt.
January 24th: MOHELA officials meet to discuss the rumors of a sale, and what the agency could do to meet the governor's goals and still remain intact.
January 26th: Blunt unveils his plan to sell MOHELA to a private company for around $425 million to fund building projects at public colleges and universities.
January 27th: MOHELA officials receive a call from the governor's office asking if they had a counterproposal. Luebbert said they did, based on the ideas discussed in the Jan. 24 meeting.
January 28th: Luebbert calls board members to alert them that the governor's office had called, and that they had submitted a proposal to sell off some of the agency's loan portfolio to fund Blunt's initiatives.
January 30th: MOHELA officials learn that Blunt is "favorably disposed" to their counterproposal, and would like to hold a press conference the next day at 11 a.m. A notice of the meeting is posted around 10:30 a.m., according to Luebbert.
January 31st: MOHELA holds a board meeting at 10:45 a.m. where the members agreed to sell off $450 million of the agency's loan portfolio. No one from the press or public attended. A press conference is held around 11:15 a.m. to announce the agreement.
February 9th: Attorney General Jay Nixon holds a public hearing on the proposed sale and transfer of the agency's assets to the state. Roughly 75 people attended and listened to testimony from Luebbert and MOHELA CEO Raymond Bayer.
February 14th: Nixon announces his attention to sue the board of MOHELA for violation of the state's Sunshine Law.