Fri February 17, 2012
State Broadens Case against LGC
DAN GORENSTEIN: State regulators charge the Local Government Center for failing to return tens of millions of dollars in surplus to New Hampshire cities and towns.
That charge is part of a new and expanded set of allegations against LGC.
Last summer, state regulators charged LGC with violating multiple state laws, and argued the group owes municipalities upwards of $100 million dollars.
Part of the argument has consistently been that LGC – which provides insurance to cities and towns – has held too much surplus in its bank accounts.
What’s new is that this allegation of accumulating all this extra capital violates something called the Municipal Budget Act.
Andy Volinsky is the attorney who now represents the state’s Securities Bureau.
ANDY VOLINSKY: “LGC holds the surplus, uses it in different ways and the towns people, the voters, have not voted to approve those uses.”
The new complaint also charges LGC with civil conspiracy, including that board members for years have concealed their actions from public view.
LGC attorney Bill Saturley says both charge are baseless.
BILL SATURLEY: “The board has acted reasonably, prudently and at all times exercised the best business judgment...in the absence of very specific rules and guidance, which didn’t exist here, they did the best job they could under the circumstances.”
This crisper and broader set of allegations signals the state’s commitment to resolving the matter.