I found the solution. The version of Code Igniter was a little older so I simply replaced the URI.php file in the library folder (core). You can alternatively follow this solution which changes 2 lines
http://davidmichaelthompson.com/2009/09/03/fixed-the-uri-you-submitted-has-disallowed-characters-error-codeigniter/I was spending a while assuming it was a .htaccess problem or a configuration problem in CI.