State House rumormongers, this reporter included, lost another subject of good gossip last week when Gov. John Lynch nominated Kelly Ayotte to a full term as attorney general. Ayotte's future had been in doubt since March, when her official term expired and Lynch announced he was interviewing possible replacements.

Why did this particular story spur so much interest?

First, there's the importance of the job. As the state's top law enforcement position, the attorney general handles all murders and dozens of high-profile investigations - including election fraud and political battles like school funding reform.

The position can also be a launching pad to higher office. Past attorneys general include former U.S. senator Warren Rudman, U.S. Supreme Court Justice David Souter and former governor Stephen Merrill.

That brings us to the politics behind the story. Ayotte was generally viewed as a talented and capable attorney general, widely respected by the state's law enforcement community. But she was appointed by former Republican governor Craig Benson, whom Lynch, a Democrat, defeated last year.

Ayotte also served a brief tour as Benson's personal legal counsel. And although she's done little to fuel the rumors herself, many State House watchers see Ayotte as a candidate for higher office one day. These connections made many Democrats eager for Lynch to oust Ayotte at the first opportunity and replace her with a member of his own party.

Not so fast. Ayotte had the support of the Executive Council, which would have to approve her replacement. And Lynch had to be careful not to make a personnel move that would look too political, given the bipartisan rhetoric he campaigned on last year.

Lynch spent much of the summer interviewing possible replacements, both Democratic and Republican. The trick was finding a candidate who wasn't perceived as politically motivated and who Lynch could argue would surpass Ayotte in legal abilities. The candidates included John Kacavas, a Manchester lawyer, and Ken Brown, a Republican attorney who represented former attorney general Peter Heed last year in his fight against Benson.

So why did Lynch decide to stick with Ayotte?

The simple answer is she's done her job. Unlike some other commissioners whom Lynch inherited from Benson, Ayotte hasn't tried to upstage her new boss.

At the same time, she hasn't shied away from dicey subjects like the parental notice case that's now before the U.S. Supreme Court, where she finds herself defending an abortion law that Lynch opposes.

More than a few Democrats, including some senators, were miffed by Lynch's choice. And several pro-choice activists took offense at the timing of Lynch's announcement - just days before they were due to submit their response in the Supreme Court case.

But Lynch's move will probably end up a political plus in the long run.

No so fast

Health Commissioner John Stephen got his first taste of life after Tom Eaton last week at a meeting of the Legislative Fiscal Committee.

Republican Sen. Dick Green, one of Stephen's toughest critics and a new addition to the committee, grilled Stephen about his in-your-face-approach to Medicaid reform. Green chided Stephen for pushing ahead with his reform despite Lynch's opposition.

"The governor has the final say,"Green told Stephen on Wednesday.

By week's end, it looked like Green wasn't alone in his opinion. We're told that Lynch lined up the support of House Speaker Doug Scamman and Senate President Ted Gatsas, both Republicans, in getting Stephen to revise the waiver he'll need to send to federal health officials before any changes take place.

A final version - with Lynch's revisions - should be ready tomorrow.

For months Stephen has defied Lynch, often taking cover behind his friendship with Eaton and Majority Leader Bob Clegg. But with Eaton now sidelined, that game is suddenly a lot tougher for Stephen to play. (next page »)