Petition to Remove Banking Commissioner

Banking Commissioner Peter Hildreth’s job may be at stake. Gov. John Lynch and the Executive Council will meet later today in a special session regarding Hildreth’s role in the Financial Resources Mortgage “Ponzi” scheme scandal (see Daily Update of Friday, Oct. 8). The five-member council will decide today whether to move forward with hearings on the case for firing Hildreth.

Lynch asked Hildreth to resign in late May after the Attorney General issued a report highly critical of Hildreth’s management of the FRM case. In early June, the Council voted unanimously to hire lawyers to draft a petition to remove Hildreth. The 10-page petition was presented to Lynch and the Executive Council last week.

Financial Resources Mortgage was closed down in November 2009. The two FRM principals, Scott Farah and Donald Dodge, pleaded guilty to wire fraud charges in federal District Court on Oct. 4 for bilking investors out of tens of millions of dollars in investments. In addition to the Attorney General’s report and a draft legislative committee report, Secretary of State Bill Gardner announced last week that his department would begin its own investigation.

Hildreth, who has been Banking Commissioner since 2001 and was reappointed by Lynch for a second six-year term in 2007, has not resigned and is currently on a paid leave of absence. If the Executive Council moves forward with the petition, Hildreth will have 45 days to prepare and present a defense. Then the Executive Council and Lynch will hold a formal hearing before voting on whether to fire Hildreth, whose department has been accused of ignoring multiple warnings about FRM and not taking action. Hildreth has defended himself by saying his department did not have the proper authority to regulate FRM. (See Concord Monitor story here.)

This is the second time in two months the Executive Council has considered a petition for removal of a top state government official. In September, the council rejected a petition by the state Attorney General to fire Liquor Commissioner Mark Bodi. Instead, the Council voted 4-1 to reprimand Bodi for his actions in connection with a 2008 liquor enforcement investigation in Keene. Council members also voted to strip him of his chairmanship of the liquor commission but allowed Bodi to keep his position on the commission.

>> Special meeting of Gov. John Lynch and the Executive Council at the Governor and Council Chambers room in the State House in Concord, today, Monday, October 11, 2010 at 4 p.m.

This Daily Update was written by Michael McCord.

Posted by Hilary Niles on Oct 11 2010. Filed under agencies & departments, banking & lending, Commerce, executive council, Government, Justice, Money, securities & investments, Weekly Briefing, white collar crime. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry