Lawsuit accuses Idaho agency of defunding anti-trafficking nonprofit in retaliation for whistleblowing

An anti-trafficking nonprofit has sued an Idaho state agency, claiming that the state pulled the organization’s funding in retaliation for whistleblowing on alleged fraud and exploitation at another nonprofit.

The lawsuit, filed in the U.S. District Court of Idaho last week by the Idaho Anti-Trafficking Coalition, comes in the wake of a series of InvestigateWest articles in July. Those articles described complaints from human trafficking victims who stayed at safe houses operated by a separate nonprofit called Community Outreach Behavioral Services, or COBS.

The Idaho Anti-Trafficking Coalition was not the focus of the investigation. But the Idaho Council on Domestic Violence and Victim Assistance, a governor-appointed agency, blamed the coalition and its director, Jennifer Zielinski, for the news coverage of COBS, believing that Zielinski was behind the stories. The state agency distributes grant funding to both organizations.

Federal agents in July launched an investigation into Medicaid fraud allegations involving COBS. State officials, however, remained focused on their suspicions, based on Zielinski’s previous complaints about COBS, that she had played a role in bringing those allegations to light, emails show.

The state council decided to keep funding COBS and to defund the Anti-Trafficking Coalition.

Calling the conduct of state officials “wanton and outrageous,” the 30-page complaint filed last week argues that defunding the coalition was retaliating against Zielinski for exercising her First Amendment rights. It requests a reinstatement of the coalition’s grant funding, compensation for damages of an unspecified amount and punitive damages against the state officials.

Jeremiah Hudson, a civil rights attorney in Boise representing the Anti-Trafficking Coalition in the lawsuit, said this case illustrates the importance of free speech.

“It’s a critical right that we all have, being able to talk about things going on with our government funding openly, being able to critique things,” Hudson said. “It’s important for our government’s long-term survival.”

Dana Wiemiller, director of the state agency, and Wes Somerton, chair of the council, did not respond to a request for comment. Both are named as defendants in the lawsuit.

Idaho Gov. Brad Little’s office said it would not comment on pending litigation. The governor’s office said last month it would launch a third-party investigation into the funding decisions. Currently, the office is “finalizing a scope of work for the review and identifying potential individuals or organizations to complete the work,” spokesperson Emily Callihan said.

Zielinski and the coalition had refused to work with COBS for years, and she had made complaints to government agencies about COBS potentially exploiting victims. The lawsuit asserts that those complaints, along with any communication with reporters regarding potential violations of federal funding requirements, were a “constitutionally protected activity.”

The Anti-Trafficking Coalition applied for federal funding that was being administered by the state council before the articles about COBS were published in July. Initially, in early August, the state told the coalition that it had been awarded $231,305 for the next fiscal year.

Days after that notification letter, InvestigateWest submitted a records request to the state asking for internal communications regarding the articles about COBS. That made state officials believe “that ICDVVA would be the target in any subsequent articles by InvestigateWest,” the lawsuit filed last week alleges.

In September, the state council convened twice to discuss whether to revoke the funding of COBS, the Anti-Trafficking Coalition or both. During those meetings, the council dismissed the reporting about COBS as having no evidence and doubted the veracity of news stories from multiple news outlets that reported federal investigators were looking into the Medicaid fraud allegations.

As the lawsuit states, agency staff argued that previous complaints Zielinski made about COBS, combined with her communication with reporters, signaled that Zielinski was “refusing to collaborate with other victims assistance organizations,” resulting in services being hurt.

The agency voted Sept. 20 to revoke the funding for the coming fiscal year.

Hudson said what has stood out to him about this case is how closely the state agency was communicating with COBS while making these decisions.

“It was clear to me that ICDVVA had been working with COBS and had been getting their information from COBS,” Hudson said.

The lawsuit also argues that the state violated the Fourteenth Amendment and acted “arbitrarily and capriciously” by revoking the grant funding without a notice or a hearing.

Hudson said this is a somewhat unique First Amendment case since it involves a granting agency retaliating against a grant recipient, instead of a more common case involving, for example, an employee and employer.

“It’s new territory,” Hudson said. “I think it’s going to be territory that is going to fill out the parameters of what’s required in proving a claim of First Amendment retaliation.”