MANCHESTER — A Local Government Center official and a union representative left a joint meeting Wednesday with significantly differing views on a contentious issue regarding the center's use of taxpayer money.
The LGC, which was designed as an insurance pool for participating municipalities, has come under fire for using a percentage of money taxpayers paid toward the Center's health trust to pay into a workers' compensation insurance pool.
Professional Firefighters Association of New Hampshire President David Lang initiated an investigation into the LGC's practices in 2003 with a Supreme Court lawsuit that since escalated into a Department of State investigation; an initial report disclosed fiscal management Lang considers to be against the law.
His views didn't change following Wednesday's meeting with LGC Executive Director Maura Carroll.
"We went in and we asked one specific question: Do they feel it is appropriate to use taxpayer money that is intended to go toward health care for all types of operations? And shockingly, she said yes."
Carroll explained after the meeting Wednesday that they have used funds over the years "for various strategic initiatives" that in the view of the LGC are beneficial to all its members.
She referenced a driving program as one of the uses of these taxpayer funds, and said it's intended to improve driving skills so there are fewer accidents, thereby reducing claims to health insurance or to workers' compensation.
"He (Lang) takes issue with that," Carroll said. "He said it's not direct health trust coverage. But what we're trying to do is lower the number of claims so we can lower the rates. At the time the board determined to use funds this way, they had advice from legal counsel who read the statute and said it was an appropriate use of contributions. We don't believe it's illegal."
Lang said, "After we listened to her, all we hear is that somehow, by charging us more money, it'll save us money in the end. We don't think it's the law and we basically asked them to stop it."
The LGC invited the firefighters association to publicly discuss these issues during their annual conference at the Radisson Hotel in Manchester this week. They also invited the National Education Association of New Hampshire and the State Employees Union, which were unavailable.
All three unions, Lang said, were planning to picket outside the hotel Wednesday night.
"We're going to keep raising this issue in a very public way," he said. "The only way things change is when an external force steps in and causes that change."
According to the secretary of state's initial report, while the focus of the investigation was originally on the use of taxpayer funds, they also discovered shell companies created in Delaware in 2003 that appear not to be in accordance with state law.
Outgoing state Sen. Jackie Cilley, who has been vocal in her opposition to these practices by the LGC, echoed the wording of the secretary of state's report and explained that the center changed its corporate structure in Delaware, putting trusts under for-profit limited liability companies that were not properly governed by a board with direct oversight and management.
The report reads: "... The question is then whether the board of a separate, parent corporation over a Pool LLC meets the statutory requirement."
Cilley said, "There was no line authority from that board to the trusts themselves. The board is actually situate in the parent company, which is a non profit. The trusts are situate in for-profit LLCs. We're talking about hundreds of millions of dollars that has no direct oversight."
Carroll said, "It's premature to take any action until the secretary of state actually says, 'You did it wrong and now you have to do something else.' We acted in good faith as an organization and based on expert counsel."
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