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August 22. 2012 11:07PM
Executive Council delays on fraud accountability unit
NASHUA — Saying they wanted greater accountability, structure and information, the Executive Council Wednesday put off action on the Attorney General's plan to use $9.5 million from a more than $40 million settlement with major banks over foreclosure proceedings.
Attorney General Michael Delaney wants to use $2.5 million of the money to establish a fraud investigative unit, $3.5 million to establish a counseling network for homeowners going through foreclosure or who have gone through it, and $3.5 million to hire attorneys to help foreclosed homeowners with legal issues.
“This is a little too loose,” said District 3 Councilor Chris Sununu, R-Newfields. “I think we all agree there is great value here, we do want to see the money go out.”
Gov. John Lynch told the council a fundamental disagreement on how to proceed with the fraud investigation unit will need to be resolved before another vote is taken.
He urged the councilors to act quickly, because people have been hurt and are hurting from foreclosures in the state. “Maybe it needs to be tightened up a bit, but overall it is a pretty well thought out proposal,” Lynch told the councilors.
The financial fraud unit would consist of four full-time but temporary positions including an attorney, an investigator, a financial analyst and a paralegal. Delaney would also like to hire part-time legal secretary to increase law enforcement resources to investigate financial fraud in the areas of banking, mortgage writing and securities.
About $500,000 would be spent this fiscal year, which ends June 30, 2013, with the rest coming through the normal budget writing procedure with the governor and Legislature.
Delaney also wants the council to approve contracts with several agencies to counsel state residents who are in danger of losing their homes to foreclosure or who already have lost their homes.
Under the memorandum of agreement, the New Hampshire Housing Finance Authority would receive $2.5 million to counsel the homeowners, while New Hampshire Legal Assistance would get $1.6 million; the Legal Advice Referral Center, $1.2 million; and the New Hampshire Bar Association's Pro Bono program, $770,000.
The total cost of the counseling and legal assistance program would be $6.5 million. About $1 million of the $10.5 million allocated from the settlement to the state is being withheld to develop a centralized data base that would allow the Attorney General's Office, the Banking and Insurance departments and the Bureau of Securities to more readily share information.
The biggest concern of several councilors was the contract for civil legal services.
Both councilors David Wheeler, R-Milford, and Daniel St. Hilaire, R-Concord, expressed concerns, with Wheeler saying it amounted to giving NH Legal Assistance a “blank check” with no accountability.
St. Hilaire argued the money may better be spent using a system like the Judicial Council employs to link attorneys with low-income clients.
He noted Legal Assistance said it would hire four attorneys and dedicate them to the program, when that many lawyers may not be needed.
Delaney countered there is accountability with Legal Assistance required to report to his office every six months. And he argued the Judicial Council has a long-established process to determine who meets state guidelines for free legal services, while those going through foreclosure may not qualify but certainly need legal help within the civil system.
Several councilors suggested the fraud unit be sunset after several years to determine if it is still needed, and Delaney said he would be open to that discussion.
But councilors Raymond Wieczorek, R-Manchester, and Raymond Burton, R-Bath, pushed to put something in place because people need help.
“The sheriff is going to be at the door saying, 'I've got an eviction notice,'” Burton said. “I don't want to be someone at this table saying, 'Sorry we need more administration.'”
The council directed Delaney to come back with a more detailed proposal at its next meeting Sept. 19.
The council did approve an 80 percent state guarantee of a $10 million loan through the state Business Finance Authority to help White Mountain Tissue LLC in Gorham purchase a new tissue machine and related equipment. The project will cost about $35 million and will add 29 jobs to the more than 200 already created at the reopened paper mill.
Also, the council approved a $43 million contract with Alvin J. Coleman & Son of Conway to widen and reconstruct the Spaulding Turnpike in Newington and Dover from just north of Exit 1 to Exit 6. The work will include reconfiguring exits 2, 3, 4 and 5.
Coleman is one of five companies to bid on the project, with the winning bid $4.6 million below Department of Transportation estimates of the project.
Garry Rayno may be reached at grayno@unionleader.com.
Attorney General Michael Delaney wants to use $2.5 million of the money to establish a fraud investigative unit, $3.5 million to establish a counseling network for homeowners going through foreclosure or who have gone through it, and $3.5 million to hire attorneys to help foreclosed homeowners with legal issues.
“This is a little too loose,” said District 3 Councilor Chris Sununu, R-Newfields. “I think we all agree there is great value here, we do want to see the money go out.”
Gov. John Lynch told the council a fundamental disagreement on how to proceed with the fraud investigation unit will need to be resolved before another vote is taken.
He urged the councilors to act quickly, because people have been hurt and are hurting from foreclosures in the state. “Maybe it needs to be tightened up a bit, but overall it is a pretty well thought out proposal,” Lynch told the councilors.
The financial fraud unit would consist of four full-time but temporary positions including an attorney, an investigator, a financial analyst and a paralegal. Delaney would also like to hire part-time legal secretary to increase law enforcement resources to investigate financial fraud in the areas of banking, mortgage writing and securities.
About $500,000 would be spent this fiscal year, which ends June 30, 2013, with the rest coming through the normal budget writing procedure with the governor and Legislature.
Delaney also wants the council to approve contracts with several agencies to counsel state residents who are in danger of losing their homes to foreclosure or who already have lost their homes.
Under the memorandum of agreement, the New Hampshire Housing Finance Authority would receive $2.5 million to counsel the homeowners, while New Hampshire Legal Assistance would get $1.6 million; the Legal Advice Referral Center, $1.2 million; and the New Hampshire Bar Association's Pro Bono program, $770,000.
The total cost of the counseling and legal assistance program would be $6.5 million. About $1 million of the $10.5 million allocated from the settlement to the state is being withheld to develop a centralized data base that would allow the Attorney General's Office, the Banking and Insurance departments and the Bureau of Securities to more readily share information.
The biggest concern of several councilors was the contract for civil legal services.
Both councilors David Wheeler, R-Milford, and Daniel St. Hilaire, R-Concord, expressed concerns, with Wheeler saying it amounted to giving NH Legal Assistance a “blank check” with no accountability.
St. Hilaire argued the money may better be spent using a system like the Judicial Council employs to link attorneys with low-income clients.
He noted Legal Assistance said it would hire four attorneys and dedicate them to the program, when that many lawyers may not be needed.
Delaney countered there is accountability with Legal Assistance required to report to his office every six months. And he argued the Judicial Council has a long-established process to determine who meets state guidelines for free legal services, while those going through foreclosure may not qualify but certainly need legal help within the civil system.
Several councilors suggested the fraud unit be sunset after several years to determine if it is still needed, and Delaney said he would be open to that discussion.
But councilors Raymond Wieczorek, R-Manchester, and Raymond Burton, R-Bath, pushed to put something in place because people need help.
“The sheriff is going to be at the door saying, 'I've got an eviction notice,'” Burton said. “I don't want to be someone at this table saying, 'Sorry we need more administration.'”
The council directed Delaney to come back with a more detailed proposal at its next meeting Sept. 19.
The council did approve an 80 percent state guarantee of a $10 million loan through the state Business Finance Authority to help White Mountain Tissue LLC in Gorham purchase a new tissue machine and related equipment. The project will cost about $35 million and will add 29 jobs to the more than 200 already created at the reopened paper mill.
Also, the council approved a $43 million contract with Alvin J. Coleman & Son of Conway to widen and reconstruct the Spaulding Turnpike in Newington and Dover from just north of Exit 1 to Exit 6. The work will include reconfiguring exits 2, 3, 4 and 5.
Coleman is one of five companies to bid on the project, with the winning bid $4.6 million below Department of Transportation estimates of the project.
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Garry Rayno may be reached at grayno@unionleader.com.