Bragdon taking LGC helm raises concerns about conflict of interestBy GARRY RAYNO
State House Bureau
August 13. 2013 3:21PM
CONCORD – Senate President Peter Bragdon will lead the embattled Local Government Center its board announced Tuesday morning.
The Milford Republican will retain is leadership position in the Senate saying "there are always the usual conflicts with volunteer legislators with a variety of appointments."
He said like other lawmakers he will disclose any potential conflict of interests and will not vote on any issue that could be related to his position.
Bragdon begins his new job Wednesday at a salary of $180,000, but he is not resigning his role in the Senate, he said. According to his contract, Bragdon's appointment will "initially" be one year, but will be automatically renewed for one-year terms.
Bragdon replaces acting executive director George Bald, the former long-time Department of Resources and Economic Development Commissioner.
"(Bragdon's) strong management, organizational and people skills will be instrumental in guiding the LGC and its risk pools into the future," said Tom Enright, LGC Board chair Tuesday morning. "Senator Bragdon will be able to build on the strong foundation that George Bald set in motion during his tenure here."
Bragdon's selection was announced prior to the boards of LGC and its respective arms - HealthTrust and Property and Liability Trust - voting to approve it and that didn't sit well with some.
At Tuesday morning's meeting, HealthTrust board member Cathy Ann Stacey objected to the process and voted against Bragdon's appointment.
"As a member of this board, I have a real problem that press releases are going out before votes are being taken," she said. "People shouldn't be jumping the gun before these boards meet."
► LGC offer letter to Bragdon sets pay at $180,000/year
Others also expressed concern about the one-year appointment of Bragdon.
Andru Volinsky, special counsel to the Bureau of Securities Regulations for the LGC case, said the appointment raises many questions, including claims by Bald that he wanted to bring transparency to the organization.
"And here out of the blue they have named the Senate President as their next interim executive director," Volkinsky said. "That suggests to me either Mr. Bald not being truthful with the public or the LGC was lying to Mr. Bald in saying it supported his interest in transparency."
Volinsky questioned when the search for a new executive director began and if the LGC board sought someone with health insurance expertise.
"This announcement undermines the respect we should have for an institution like the New Hampshire Senate and the respect we should have for the state's largest health insurer," Volinsky said. "If this is an effort to rebuild trust, it is an incredible stumble and once again one must wonder who is in charge of the LGC."
Former Senate President and current Senate Minority Leader Sylvia Larsen, D-Concord, expressed reservations about Bragdon taking the position saying there is real question if he can separate from the position as the second in charge of the state as Senate President and the director of the LGC, which is one of the strongest lobbying forces in the State House.
"He needs to answer and we need to be certain there is a fair line of demarcation," Larsen said, "or he needs to think about what is most important to him."
She recognizes the state has citizen legislators with other careers, "but something this sizable raises a lot of questions," Larsen said.
The LGC, which includes most of the state's municipalities, ran into legal difficulty several years ago over its handling of its separate trusts and their incorporation under Delaware's corporate laws. About a year ago, a Secretary of State hearings officer found the LGC had violated several state laws, starting in 2003 and continuing through 2010.
The officer found the LGC failed to distribute excess earnings and surpluses to member towns, cities, school districts, counties, and local special districts on an annual basis; improperly transfers money from the Health Care Trust and Property Liability Trust to the Workers Compensation Trust, and transferred the Health Care Trust's and Property Liability Trust's interests in real estate to the Local Government Center Real Estate Inc., without compensation.
The order found the activities reduced surpluses that should have been returned to LGC members on an annual basis. The LGC was ordered to distribute $33.2 million from the Health Trust and $3.1 million from the Property Liability Trust to cities, towns, schools districts and counties that were members of the programs on Aug. 16, 2012. Several communities that left the LGC prior to that date sued because they will not receive refunds.
David Lang, president of the Professional Fire Fighters of New Hampshire and a long-time critic of how the organization handled its trust accounts, said he believes continuing with one executive director for the different trusts violates the hearing's officer's order.
He said his organization represents the state's fire fighters on specific issues and having Bragdon as the head of the LGC is not going to change that dynamic.
Last session, lawmakers voted to establish a committee to oversee the hearings officer's report on LGC. Bragdon appointed Sen. Jeanie Forrester, R-Meredith, to be the Senate member of the committee before he was named executive director.
"I have not talked to her and have not interacted with the committee," Bragdon said, but Volinsky questioned the appointment of Forrester before Bragdon began negotiating with the LGC for its top spot.
"Was he doing the LGC's bidding or the people's bidding," Volinsky asked.