State student loan board wants AG disqualified from lawsuit

The Associated Press

JEFFERSON CITY, Mo. -- The state's student loan authority wants the attorney general's office disqualified from a lawsuit filed alleging the authority violated the state's open meetings law.

Attorney General Jay Nixon sued the Missouri Higher Education Loan Authority in February, alleging its board violated Missouri's open meetings law as it sought to develop a response to Gov. Matt Blunt's plan to sell some authority assets to provide funds for college construction projects.

Attorneys for MOHELA asked in St. Louis County Circuit Court last week to disqualify Nixon from the case. They claim the office has a conflict of interest because, according to them, an assistant attorney general used to represent MOHELA and took part in one of the meetings in question.

Nixon's office said none of his staff has ever represented the student loan agency.

The court motion, filed by attorneys Sanford Boxerman and Thomas Wack, of St. Louis, said then-Assistant Attorney General Ronald Molteni's participation in the meeting was "creating a conflict between the interests of the office of the attorney general in prosecuting this action, on the one hand, and the interests of the office of the attorney general as a participant in allegedly unlawful conduct, on the other hand."

Molteni no longer works in the attorney general's office and could not immediately be reached for comment Wednesday. Nixon spokesman John Fougere called the motion "frivolous," and said the office is preparing for trial in January.

An attorney for MOHELA and its executive director did not immediately return calls seeking comment Wednesday.

The board has denied violating the open meetings law.

Members voted Jan. 31 to adopt a plan to sell part of the agency's portfolio to generate funds for Blunt's higher education initiatives at a meeting that lasted only minutes with no public testimony or discussion by board members. Board members had hashed out the details of the plan in advance of the meeting through a series of one-on-one conversations.

Nixon contended they violated the state Sunshine Law a dozen times by failing to give proper notice of meetings and by holding secret discussions -- that should have been public -- while developing the proposal.

The board held a well-publicized meeting in March and reaffirmed their vote, but it did not end the litigation.

The plan to sell MOHELA assets has changed several times. It failed in the Legislature this spring, but the board, with several new members, endorsed a revised proposal in September.

Under the latest scenario, MOHELA could keep operating but would transfer a bulk of its profits and sell billions of dollars worth of loans to finance Blunt's initiative. It would direct $350 million in MOHELA money to public colleges and universities over six years.

The Legislature is again expected to consider the matter after it returns in January.

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On the Net:

MOHELA: http://www.mohela.org