NEW HAMPSHIRE does not have many laws or statutes on ethics, conflicts of interest, or financial disclosure. We operate on an honor system, trusting the judgment and common sense of our elected officials not to do anything to violate the public trust. It usually works, but not always, as we have seen the last week or so in connection with the hiring of state Senate President Peter Bragdon by the Local Government Center to serve as its executive director for a $180,000 a year salary.
The LGC, a quasi-governmental agency that provides insurance and other services to towns and school districts, has been embroiled in litigation for several years. The first round had to do with whether the LGC is subject to the right-to-know law. LGC did not think it was; the New Hampshire Supreme Court disagreed. Then, the LGC came under scrutiny from its regulator, the Bureau of Securities Regulation, over retention of excessive surpluses and a corporate reorganization. Currently, the LGC is appealing an order by the Bureau that it return $50 million to its members.
Given the litigation and ongoing negotiations with the state of New Hampshire, there was immediate and sharp criticism of both the LGC and Sen. Bragdon. As senate president, Peter Bragdon wields significant influence over the budgets of courts and the Bureau of Securities Regulation. Moreover, the members of the LGC include towns and school districts, which have business before the Senate, such as local aid, state contributions to education, and infrastructure improvements. In addition, one of the executive director's jobs should be the expansion of LGC's insurance business. Would Sen. Bragdon's dual role push towns and municipalities to the LGC, instead of its competitors?Then there was the conflict within the state Senate. The Senate president has control over committee assignments, budget issues affecting individual districts, and even administrative matters such as office space, staff assistance and parking assignments. How easy would it be for state senators to take a position against the LGC, knowing that its president was being paid $180,000 to run the organization?
It was pretty clear that the LGC had hired Sen. Bragdon because of the influence that he has in state government. The chairman of the LGC board said the appointment would "allow us to have a better relationship with our regulator." What would allow that better relationship was Bragdon's senate position.
Senator Bragdon, a Republican, wrongly dismissed the outcry as partisan. Republican former senators Raymond White, Ted Gatsas and Robert Clegg all said he had to choose between the senate and the LGC. White even said, "My head exploded...You have to wonder about all the conflicts." Four newspapers editorialized against the hiring. After a couple of days, Bragdon announced he would step down as senate president, but not from the senate itself, or the LGC.
Crisis solved. Our honor system works, right?
Not so fast. Peter Bragdon still sits in the state senate. He still will be the executive director of the LGC. He still will be responsible for leading the negotiations with the Bureau of Securities. Defenders of Sen. Bragdon and the LGC will say most legislators have to work because of the essential volunteer nature of the job. But this case is different. Most working legislators arrive at the State House already employed at the time of their election. Here, the LGC went out and hired a senator exactly because they are having problems with a state regulator and he is a senator.
Would it be OK if Public Service of New Hampshire hired a sitting state senator or two, and their job descriptions included representing the company in negotiations with the Public Utilities Commission over the Northern Pass or electrical rates? Of course not. Or for wealthy landowners at Lake Winnipesaukee to form an association and then hire the speaker of the house as chairman and executive director, with the job of negotiating with the Department of Environmental Services regarding shore regulations? No. Under the Bragdon Rule, however, that would be fine and dandy. There is a lot wrong with this picture. Unfortunately, because New Hampshire operates on an ethics honor system, with little statutory or internal legislative regulatory guidance, it is permissible. Wrong, but permissible. Based on the praise being heaped on Senator Bragdon's decision to step down as senate president, but not from the senate itself, and not from the LGC job, there are too many elected officials who do not understand that government service should require a higher ethical bar than what is permissible legally.
Sen. Bragdon should either resign from the senate, or from the LGC.
Kathy Sullivan is a Manchester attorney and member of the Democratic National Committee. She was chairman of the New Hampshire Democratic Party from 1999-2007.