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Unions seek to enter suit

Last modified: 10/19/2011 12:00:00 AM
Attorneys for the state's biggest unions made their case yesterday for why they should be part of a lawsuit seeking about $100 million from the Local Government Center.

'We clearly meet the definition of an interested party that is set out in the statute,' said attorney Glenn Milner, representing thousands of teachers, firefighters and other municipal employees. 'Our reasoning behind that is simple: Public employees - both active and retired - are the real victims of the alleged unlawful conduct by the LGC. It's their money.'

Public hearings began earlier this month on allegations that the LGC - which provides municipalities across the state with services such as health insurance, legal help and lobbying - violated state law by failing to return surplus money from pooled risk programs that provide cities and towns with health and property insurance. The organization instead used the money to subsidize a workers compensation pool, according to a state investigation report in August.

A hearing was held yesterday to determine whether the unions will be allowed to intervene in the case as representing thousands of municipal employees affected by the LGC's practices. David Lang, president of the state firefighters union, first jumpstarted the state's investigation when he filed a lawsuit in March 2010 alleging misuse of funds by the organization.

Hearing officer Don Mitchell did not decide yesterday whether the unions will be allowed to intervene and did not give a timetable for his decision. LGC attorney William Saturley said the state Bureau of Securities Regulation, which brought the charges against the LGC, has exclusive legal authority to investigate and enforce the law. If the unions are allowed to be part of the case, then any member of public could file to intervene, he said.

'The public's free to watch, the union representatives are free to watch, but we believe there is nothing in the statute that allows them to participate,' Saturley said.

Milner said the unions qualify as interested parties under the law.

'It's not as though we think the Secretary of State and the Bureau of Securities Regulation . . . aren't going to prosecute this case very well,' Milner said. 'It's more a matter of the firefighters have been invested in this cause for many years . . . we obviously have more than just a passing interest in these proceedings.'

Milner said the state's Bureau of Securities Regulation is a 'relatively small unit . . . going up against a lot of high powered attorneys hired by the LGC.

'We're well-versed in the documents and we're simply offering our assistance, which I'm confident the (Bureau of Securities Regulation) folks would be glad to have,' Milner said.

State attorney Earle Wingate said the Bureau of Securities Regulation doesn't have a position on the unions' involvement because 'we really didn't care' either way. However, he acknowledged that 'without David Lang, the whole issue probably wouldn't have come out over the years.'

'They have been in similar fight from the start and my view was: 'If they can get in, great. If they can't get in, that's fine too,' ' Wingate said.

The attorneys on both sides of the issue have until Friday to file any follow-up arguments. The next hearing in the case is scheduled for Monday morning, when the state and the LGC are set to argue over whether Saturley can represent several different entities of the organization without a conflict of interest.

(Matthew Spolar can be reached at 369-3309 or mspolar@cmonitor.com)


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