CONCORD, NH – While the state conducts a contentious and extended examination of the Local Government Center’s books, the LGC has filed a subpoena for all e-mails discussing the LGC and mailed between the head of the statewide firefighters’ union and the Bureau of Securities Regulation, the secretary of state and/or all third parties.
The LGC was formed as an insurance pool with a mission of helping municipalities achieve favorable rates and is funded by public employees, retirees and taxpayers. The BSR has a pending four-count, $100 million legal complaint against the LGC, alleging corporate and financial improprieties and that the LGC owes funding entities $100 million in surplus funds it was required to rebate.
In December, Donald Mitchell, presiding officer for the BSR’s $100 million claim, ruled an on-site accounting of LGC books is “necessary” for completion of the ongoing legal dispute. Mitchell’s order came over the LGC’s objections that an accounting is “unnecessary” and would create a “circus-like” atmosphere.
The BSR has since reported that, during the two weeks it was given to review LGC’s books, delays were “endemic,” LGC staff was unavailable or unresponsive, the LGC office closed for three hours for a holiday party and documents stored in a basement were unavailable because, LGC staff said, no one was “dressed appropriately” to go to the basement.
Further, the LGC reports, bank statements were missing.
The LGC again objected, but Mitchell ruled in the BSR’s favor, extending the auditing deadline to Jan. 13.
In the meantime, David Lang, president of the Professional Fire Fighters of New Hampshire, was subpoenaed by the LGC for his LGC-related e-mail “and other written correspondence,” according to public documents.
Lang’s attorney, Glenn Milner, filed a motion saying the subpoena also calls for a Jan. 23 deposition of Lang and should be dismissed by the hearings officer for two reasons. First, Milner argued, LGC attorney Anthony Quirk has no legal authority to subpoena witnesses. Secondly, Milner wrote, the LGC previously argued that Lang and his union could not be included during the ongoing hearings because they don’t fit the legal definition of interested parties.
Further, Milner wrote to the hearings officer, the LGC should “not be permitted to launch a ‘fishing expedition’ on matters entirely irrelevant to these proceedings.”
Lang declined to comment.
Mitchell has not yet ruled on the debate, but has published a scheduling order that includes April 30 as the date both sides will engage in an evidentiary hearing.
In September 2011, House Deputy Speaker Pamela Tucker, R-Greenland, and State Sen. Ray White, R-Bedford, called for the state to bring the LGC “into court-appointed receivership.” This came a month after BSR attorney Earle Wingate III published a report stating the LGC is “improperly constituted,” should return to nonprofit status and should reimburse $100 million it overcharged for the past nine years.
Wingate also alleged at least $20 million must be reimbursed for money diverted from health and property liability pools to a workers’ compensation pool.
In August, the LGC conceded its 2003 corporate restructuring was “not completed appropriately” and said it would return to nonprofit status. In June, the LGC announced it would repay $17 million taken from a health insurance account during a six-year period and moved into the workers’ compensation account. However, the LGC said it would repay the $17 million with future surplus funds.
Wingate estimated the LGC will spend more than $1 million on lawyers to defend itself against the BSR claims.
Portsmouth is the largest LGC contributor, paying 1.4 percent of the total pool. The city previously demanded a $282,436 workers’ compensation refund from the LGC, but was denied.