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Thursday, March 18, 2010

Quasi-public nonprofit opened up

EDITOR’S NOTE: Newspapers are watchdogs of government because of laws that protect the public’s freedom of information and right to know. Sunshine Week is an annual examination of government’s responsiveness to citizens. The project is spearheaded by the American Society of Newspaper Editors and includes the participation of newspapers across the country.

In following the state Right-to-Know Law, municipal governments have to make most information available for public review.

Allowing citizens to see how elected officials and public employees govern is the underpinning of the checks and balances system conceived by the Founding Fathers.

But what happens when a nonprofit has a quasi-public function and its staff salaries are paid largely by tax dollars?

Until last month, a nonprofit corporation fitting that profile had contended its salaries and other information were not for public consumption. The Local Government Center in Concord for seven years fought the release of its salaries, arguing that its wages were not of public interest.

But the state Supreme Court rejected that opinion and in January ordered LGC to give a list of staff salaries to the state firefighters union as well as the public. The Professional Firefighters of New Hampshire wanted to see the salaries, and other documents, because the union contends LGC has misused public money.

Chief Justice John Broderick wrote for the unanimous court that while LGC employees aren’t public employees in a strict sense, their wages are nonetheless paid mostly by tax dollars, and many aspects of their work are for the benefit of taxpayers.

The ruling led to the revelation that 21 of the Local Government Center’s 134 employees make $75,000 or more annually, and seven of them earn $100,000 or more.

In an interview early this month, LGC interim Executive Director Maura Carroll said the salaries are not exorbitant. LGC is employing people who would work elsewhere in the private sector, she said.

The bulk of LGC revenue comes from taxpayer dollars that municipalities pay for services. Municipalities contract with LGC to provide legal services and lobby state legislators on their behalf.

Also, LGC’s Health Trust subsidiary buys insurance for municipal employees with premiums paid by municipalities. And public officials and employees sit on LGC’s governing board.

With all that and more to consider, the Supreme Court unequivocally ruled LGC is “conducting the public’s business” and is “subject to the Right-to-Know Law.”

“Public access to specific salary information gives direct insight into the operations of the public body by enabling scrutiny of the wages paid for particular job titles. Public scrutiny can expose corruption, incompetence, inefficiency, prejudice and favoritism,” Broderick wrote in the ruling.

Carroll said it was previously unclear whether her organization was subject to the Right-to-Know law. But the Supreme Court “certainly came down on the side of disclosure and to make sure things are more public than not.”

The Right-to-Know Law generally allows the public to review records pertaining to government business, but state and municipal officials can cite exemptions to keep documents private. Those exemptions include the potential to adversely affect negotiations during a property purchase or the possibility of harming someone’s reputation.

Carroll said LGC employees will now comply with the Right-to-Know Law as well as begin placing more material on the LGC Web site. LGC is “happy” to release information, she said.

“On the other hand, we are a business also,” Carroll said. “We have to review our requests for information under Right to Know and make sure we don’t provide proprietary information or health information about employees.”

Essentially, commercial materials that would give other insurance companies a strategic advantage are private, Carroll said.

“If you ordered Cigna to release its long-term business plan, it would give us an advantage,” she said.

Carroll said LGC’s work in health insurance is misinterpreted, and that the company is wrongly considered only as “middle men who purchase coverage and sell it to municipalities. But what we do is a service.”

LGC provides training and instruction on benefit packages, and processes all claims, Carroll said. LGC has a “fairly large risk training staff” that instructs municipalities on safety issues and has leadership training, she said.

But the firefighters union disagrees and claims LGC has improperly used municipal fees and insurance premiums. After reviewing the salaries and other information released after the Supreme Court decision, the union filed another suit last week.

The union suspects LGC is using insurance money collected from municipal employees for noninsurance purposes such as lobbying and salaries for employees who don’t handle insurance, said David Lang, president of the union.

Last year, LGC officials confirmed that over four years, it moved $14.5 million from its health trust to be used for marketing and to start a workers’ compensation insurance plan for municipalities. LGC said employer premiums, and not employee premiums, were used, and that it amounted to 1 percent of the total money in Health Trust.

Lang said the firefighters union will press for more information. “We’re not done,” he said. “What they’ve done is unbelievable.”

Carroll said LGC needed the court ruling to “be clear.” LGC recognizes “we need to be responsive in a quick and effective manner,” she said.

Prior to the ruling, LGC had received a Right-to-Know request seeking three years worth of documents, but three years ago, no one segregated public and commercial information, Carroll said.

“But the separating started as soon as we got the decision,” she said.

Albert McKeon can be reached at 594-5832 or