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Longtime LGC critic Lang says group needs new leadership, and fast

Last modified: 1/22/2013 7:03:55 PM
Dave Lang has been the Local Government Center’s loudest and most consistent critic for a decade. His advocacy and legal efforts sparked a state investigation of the group’s business practices, and the Supreme Court is taking up the case this year.

But even if the high court upholds last year’s administrative order that the Concord-based LGC must return tens of millions of dollars in improperly retained surplus money to its members, Lang says that won’t be the end of the issue.

“I think we need new leadership. . . . We need somebody in there to fix it, and fix it quick,” said Lang, president of the Professional Fire Fighters of New Hampshire, during an interview last week with the Monitor’s editorial board. “There’s too many lives that depend on it.”

A wholesale change in leadership could come in a state takeover of the LGC’s assets through receivership, he said. It could result from a court order. Or, he said, the LGC’s board could voluntarily step down.

But Lang said he believes the LGC will instead try to change the rules of the game, by seeking legislation at the State House to legalize its practices.

The LGC declined to respond to Lang, instead issuing a statement repeating its call for the state Bureau of Securities Regulation to negotiate a settlement to the case through mediation.

“The Local Government Center believes it would be counter-productive at this time to respond to the opinions expressed by Mr. Lang or comment in the news media,” said Tom Enright, chairman of the LGC’s board. “What we really want is an opportunity to mediate this case, as recommended by the (New Hampshire) Supreme Court. We have been unsuccessful to date in getting the regulator to meet with us, and we are hopeful that will change in the near future.”

The bureau, which is part of the secretary of state’s office, hasn’t shown any interest in mediation, which the Supreme Court said last year was an option in the case. Officials said they’ve tried to negotiate with the LGC in the past, with little success, and that the time for such talk has passed.

‘A very bad position’

Since 1987, the Local Government Center has operated public risk pools that provide local governments across the state – such as towns, cities and school districts – with insurance. It offers property, health care and workers’ compensation coverage.

In 2003, Lang resigned from the LGC’s board, and he and his union began a years-long legal fight to open up the group’s records to public inspection under the state’s Right to Know Law. The state Supreme Court twice ordered the LGC to make available records.

Among other things, Lang said the group conducted an illegal corporate reorganization and has been holding on to too much taxpayer money instead of returning it as surplus.

That, he said, drives up insurance costs for member communities. And in turn, that puts pressure on public employees – including his union’s firefighters – to justify skyrocketing health care costs at a time of increasingly tight public budgets.

“We’re put in a very bad position. . . . Yet the Local Government Center has put us in this position because they’re overcharging us,” Lang said. “I believe, in my soul, that we can lower the cost of health care by at least 15 percent.”

The LGC has denied any wrongdoing. Its leaders say the group must retain a certain level of reserves to make sure it can cover potential future claims.

But in 2009, the Legislature changed state law to grant more regulatory power to the securities bureau, leading to an investigation that led to an administrative hearing. The hearing produced the order last August that the LGC had to return more than $52 million in improperly retained surplus.

The LGC also was ordered to change its corporate structure and modify other business practices, including dropping a rule that towns and cities must purchase membership in its lobbying-and-training arm, the New Hampshire Municipal Association, in order to buy insurance. Other charges brought by state regulators were dismissed.

The LGC appealed the order to the Supreme Court, which accepted the appeal and is expected to hear the case this year.

But Lang said he’s worried the LGC’s lobbyists will try to protect the group at the State House while its lawyers are at work in the courtroom.

“All these moves they’re making are all window-dressing, in order for them to be able to get over to that Legislature. . . . ‘Let’s go in and change the law. Let’s go in and change the law, make this law so that we can do what we want to do and continue doing, because we want to continue this operation,’ ” Lang said.

A bill has been filed by Rep. Daniel Sullivan, a Manchester Democrat, that would create a legislative committee to study possible changes to the law that regulates public risk pools, including the LGC.

Maura Carroll, the LGC’s executive director, told the Monitor in December that while the group is willing to work with the Legislature on any legislation that’s introduced, “We are not pursuing legislation in this session.”

In any case, Lang said, he’s not letting down his guard.

“When I first started this, people thought I was crazy,” he said. “Everything we’ve said, everything the firefighters have ever said . . . has come true.”

(Ben Leubsdorf can be reached at 369-3307 or bleubsdorf@cmonitor.com or on Twitter @BenLeubsdorf.)


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