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Attorney General Jay Nixon said today that he will sue the board of directors of Missouri's college loan authority for allegedly violating open meeting laws when creating and endorsing a plan to sell some loan assets. This news came just hours after two representatives from Nixon's office testified about the possible violations before a senate committee. They were discussing Governor Matt Blunt's proposal to spend monies from the sale of some MOHELA assets. KSMU's Missy Shelton reports on the senate hearing for the governor's proposal.
The committee heard testimony from representatives of 10 universities that would benefit directly from Governor Matt Blunt's Lewis and Clark Discovery Initiative.
Under this proposal, these four-year institutions stand to gain collectively hundreds of millions of dollars for capitol projects, funded by the partial sale of MOHELA's assets.
Lawmakers established MOHELA in 1981 as a non-profit entity that uses tax-free bonds to underwrite student loans, resulting in lower interest rates.
Gregory Fitch is Missouri's commissioner of higher education and a MOHELA board member.
He told the senate education committee about the importance of this plan and the funding it will give universities for building and renovation projects.
MOHELA's executive director Raymond Bayer attempted to address concerns that the sale of MOHELA assets would result in higher interest rates on student loans.
He told the committee that the state's contract with any private company that buys the debt from MOHELA will have stipulations.
But the committee heard a more concerned tone when two representatives from the Attorney General's office testified.
Jeff Schaeperkoetter, an assistant attorney general told the committee that the MOHELA board was pressured into voting for the partial sale of the organization's assets.
Attorney General Jay Nixon recently began holding public hearings to gather information the sale of MOHELA assets.
Paul Wilson, Nixon's deputy chief of staff says there are concerns that the MOHELA board violated the state's open meetings law.
After the committee's hearing on the proposal, MOHELA's executive director had no comment on the assertions of the Attorney General's office.
During the hearing on the proposal, the committee also heard testimony from Greg Steinhoff, director of the state's economic development department.
He says investing in buildings on university campuses will give a boost to the state's economy.
The proposal faces a vote in the senate committee and must gain approval before advancing to the senate floor.