Charges of nepotism lead to DES resignation
CONCORD — Charges of nepotism, conflict-of-interest and misuse of agency funds have led to the resignation of Department of Employment Security Commissioner Tara Reardon and placed a cloud over the head of Deputy Commissioner Darrell Gates.
Gates is currently the acting commissioner by statute, although Gov. John Lynch said Wednesday he hopes to nominate a new commissioner within a week or so.
“Any department needs good strong leadership,” Lynch said. “I would not want to leave a void at the department for long.”
Both Reardon and Gates are accused in a whistleblower complaint of directing the department to hire their daughters and then lay them off so they could collect unemployment benefits.
Reardon's daughter, Whitney Flanders, held a part-time internship at the agency during the summer of 2011 and was to quit at the end of the summer. Instead Reardon is alleged to have intervened so her daughter was laid off, allowing her to collect unemployment benefits.
Gates' daughter, Kelsey Gates, held a part-time position at the department for two years. He is alleged to have intervened to have his daughter laid off in August 2011 so she could collect unemployment benefits.
After more than a month of closed-door meetings by the Governor and Executive Council to discuss the issue, Reardon agreed Tuesday to resign her position, effective Aug. 31.
The Council voted 5-0 Wednesday to accept her resignation and placed her on paid administrative leave until Aug. 31. District 5 Executive Council David Wheeler, R-Milford, said the council believes the charges are serious enough that Reardon should not go back to the agency.
“I was shocked and disgusted,” Riccio said Wednesday, “particularly when we actually prosecute people for fraud.”
In a statement, Reardon blamed disgruntled employees who “waged a continuous effort to create divisions within the department and undermine my leadership. They have distorted the truth and fabricated a story to cover their own failure to do their jobs in a professional and competent manner. Although the list of their disciplinary and performance issues is lengthy, confidentiality of personnel matters prevents me from publicly addressing them.”
Riccio, who has worked as the human resources director for the agency for three years, said she has no discipline reports in her file.
Dalterio said: “I have worked with Lisa for three years at the department. She is one of the people with highest integrity I have met in my life.”
As an attorney, Dalterio said she is bound by the code of professional ethics to report the information Riccio provided.
The Attorney General's Office contacted her several weeks after she made the complaint and informed her there would be an investigation, she said, and later interviewed her.
“I made it clear to the Attorney General's Office, I did not have firsthand information,” she said. Dalterio has been the agency's general counsel for five years.
Riccio said she testified before a Merrimack County grand jury this spring.
Reardon said she chose to step down rather than jeopardize the agency's mission of helping the unemployed.
“The mission of the Department of Employment Security — helping New Hampshire's unemployed workers to find jobs to support their families, is simply too important to be disrupted by my own personal desire to defend myself from these attacks,” Reardon said. “For this reason, I agreed to step aside and allow the governor to appoint a new commissioner to lead the department.”
Wheeler said criminal charges may be brought, noting the Attorney General's Office investigated the matter for six months and had enough evidence to take the case to a grand jury.
He said he believes the charges are serious enough that Reardon should have been suspended without pay.
Other councilors praised the job Reardon did at the department, as did Lynch. But all said Reardon made the correct decision to resign.
Lynch said Reardon led the department through very difficult times with high unemployment.
“I'm disappointed,” Lynch said, “but these are serious, serious allegations. She did the right thing in resigning.”
Lynch said he had not spoken to Reardon about the allegations.
He said he will continue to work with Attorney General Michael Delaney on the charges against Gates.
“There is not enough information at this point to go forward,” Lynch said, noting Gates is a classified employee, so a different disciplinary process applies.
Delaney said there are rules that must be followed in disciplining classified personnel. “It's a formal established process that must be followed,” he noted, adding the Governor and Executive Council does not have an active role in that process.
In her resignation letter, Reardon said she is resigning to pursue other opportunities.
Reardon was appointed to the position in May 2009. She was serving a five-year term that was to end April 1, 2014. She earns $99,200 annually.
Reardon replaced Richard Brothers. He was not reappointed by Lynch, who had barred him from his office in February 2009 for allegedly filing fraudulent travel vouchers.
Reardon is the wife of Concord Mayor and State House lobbyist Jim Bouley.
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