The Executive Council has voted to hire a former state prosecutor and his Manchester law firm for advice while it hears Gov. John Lynch’s bid to remove two state agency heads.Donald Perrault, a former assistant attorney general, will supervise his work and that of associates with the Wadleigh, Starr & Peters firm on the looming petitions to remove state Liquor Commission Chairman Mark Bodi and Banking Commissioner Peter Hildreth.The firm will be paid up to $175 an hour for its advice, with a budget not to exceed $75,000.Kathy Sullivan, former chairwoman of the New Hampshire Democratic Party and ranking member of the Democratic National Committee, is a partner in the firm.Councilor Raymond Burton, R-Bath, said constituents in his northern district are following both controversies closely and growing impatient with the pace.“This will keep the process going. It comes up unprompted in my district. People ask, what are you doing here?’” Burton said.Lynch wants the council to remove Bodi on allegations of malfeasance for interfering in a liquor enforcement action against a Keene bar in December.Bodi claims he was trying to deal with political pressure brought on the bar owner’s behalf by Rep. Daniel Eaton, of Stoddard, the fourth-ranking Democrat in the 400-person New Hampshire House.Bodi maintains he asked state prosecutors for assistance on amending a search warrant and got no help.Former Attorney General Philip McLaughlin will defend Bodi at a public hearing before the council that may begin this summer.
Lynch has called for Hildreth’s removal for his failure to regulate Financial Resources Mortgage Inc. of Meredith until it declared bankruptcy and defrauded more than 150 investors out of as much as $80 million.Attorney General Michael Delaney authored a report that found “significant failures” in the state departments of Banking, Securities and Justice that allowed FRM to remain in business while 15 complaints came in on the firm over a nine-year period.Hildreth says he’s proud of his agency’s review on this matter and confident the council would decide to keep him on the job.Former Senate President and Rep. David Nixon, D-Manchester, is representing Hildreth.This second removal track is likely to take much longer.Delaney said his office was unable to find a New Hampshire lawyer qualified to prepare the petition to remove Hildreth. One lawyer did respond to an in-state bid request but did not have the requisite skills, Delaney said.The FRM scandal extends to investors, banks and developers who have ties to lawyers throughout the state, the attorney general said.“Most law firms have a client with some interest in the matter,” Delaney said.Lynch told reporters he wasn’t surprised the state will have to go outside New Hampshire for help in the Hildreth matter.“It’s a small state and a state where everybody knows everybody,” Lynch saidIn light of the attorney general office’s role in the FRM scandal, Delaney asked to hire the independent prosecutor to make the removal case to the council.The attorney general expanded the legal search to lawyers in Massachusetts.Lynch and Delaney said they were committed to pursuing legislation in the 2011 session to give back to the attorney general’s office the power to investigate complaints on banking and securities.Lawmakers exempted those industries in adopting a bill in 2002, and Lynch recently vetoed a bill (House Bill 1490) that would have broadened that exemption.“That is, in part, why I vetoed that bill, and I’m fully supportive of giving the attorney general’s office this jurisdiction they should have had all along,” Lynch said.
— KEVIN LANDRIGAN/THE TELEGRAPH
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This article appears in the July 30 2010 issue of New Hampshire Business Review