New Hampshire gets D grade in 2012 State Integrity Investigation

Why New Hampshire ranked 35th of 50 states



A covered bridge in Flume Gorge, New Hampshire.


With a motto “Live Free or Die,” it’s not surprising that New Hampshire is very much a state geared toward keeping government  lean and relatively weak.

Much of the public sector flows from this starting point. New Hampshire  is one of just two states with neither a sales tax nor a personal income tax on wages and salaries; the fear is that if government has more money, it will grow. Every state elected position has a two-year term, which keeps everyone on a short leash. The 424 lawmakers are paid $100 a year, plus mileage. There’s a five-person Executive Council that has final say over every contract worth at least $10,000 the state signs and almost every appointment the governor makes. The council is a holdover from the days of colonial government when the people wanted to keep the governor — appointed by the king — in check.

With that history and that attitude, New Hampshire ranked 35th out of 50 states when it comes to transparency and anti-corruption measures. The State Integrity Investigation, a collaborative project of the Center for Public Integrity, Public Radio International and Global Integrity, gave New Hampshire a grade of D and a numerical score of 66.

Behind the numbers

Qualitatively, it is a state with a relatively clean track record when it comes to corruption. One has to look hard to find the handful of allegations of public resources being utilized for personal gain. Even when transgressions occurred, they were more idiosyncratic than systemic, such as a lawmaker seeking a hearing on a minor matter in which he might have some material interest.

While the southern third of the state grew rapidly in the 1990s, New Hampshire retains a significant  rural character. With about 1.3 million people, it is small enough that there’s a human touch in most dealings with government agencies.

That said, the state has clear weaknesses and blind spots in the areas of campaign finance and asset disclosure. It puts insufficient resources into spotting conflicts of interest and fails to take advantage of current digital technology to make the operations of the public sector fully transparent.

The state has taken several steps in the past eight years to improve its formal safeguards. The ethics rules in the legislative and executive branches were strengthened with restrictions on outside gifts and some limits for executives on employment after a public sector job. Executive Accountability is a bright spot for New Hampshire on the Report Card. It scored a full grade point above the national median, earning a solid B. Also, the state now has a whistleblower protection law.

Perhaps due to the state’s peculiar governmental structure, which diffuses power across many actors, or perhaps due to political culture, New Hampshire’s formal deficiencies have not led to appreciable abuses of power or distortions of the political process. That hardly means abuses could not take place in the future.

Campaign cash

The area calling for the most attention is campaign finance. Here the integrity of the political process is vulnerable on several fronts.

In New Hampshire, there are no limits on the amount of money that political action committees can donate to other political committees, including political parties. In 2010, the Democratic Governors Association gave $394,500 to the state Democratic Party.. While individuals face a cap of up to $15,000 per election cycle, PACs can give unlimited support to candidates who accept specified spending limits.

The other formal weakness in the state’s campaign finance rules is the opportunity for individuals to act as one-person bundlers. Typically, a bundler is a lobbyist who corrals a large number of individual contributions and delivers their contributions wholesale to a campaign. But if someone controls many corporations, he or she can avoid legal limits by making contributions in the name of each separate corporation. Most recently, this took the form of the owners of dozens of Dunkin’ Donuts franchises financing the campaign of the Republican gubernatorial candidate much more generously than they would otherwise have been able to achieve.

In the area of public access to campaign finance information, the state fails to use commonly available software employed by many other states. Using federal funds, the state created an online digital reporting system, but the legislature failed to require the campaigns to use it. All of the larger campaigns and the political parties use spreadsheets and databases to record this information for their own purposes.

Other states require campaigns to upload these files, but not New Hampshire. As a result, very few campaigns do; certainly none of the largest ones. Fergus Cullen, a former chairman of the state Republican Party, said he thinks the reason is simple convenience.

“Even with the big campaigns,” Cullen said, “The finance chair is a volunteer with no interest in going through the learning curve to use the online system. The easiest thing is just to print out the forms and hand them in.” Cullen does not believe most campaigns avoid the online system with the intent to make the information less accessible. Without a requirement to use it, they do what takes the least effort.

While a digital reporting system allows citizens and news organizations elsewhere to sort and analyze donor and expenditure information, that system is not available if you are looking in New Hampshire. According to the State Integrity Investigation, the median score for ease of access to this information on candidates’ campaigns is 85. New Hampshire scores 65.

Lobbying information

Lobbyist disclosure is another realm ripe for more digital transparency. Currently, the state reports which lobbyists represent which company or organization on static web pages. There is no easy way to analyze this information. Off-the-shelf software is available to solve this problem.

David Scanlan, deputy secretary of state, said his office has seen the legislature tinker with lobbyist reporting requirements. That process seems to be over. “Things have probably settled down enough that we could probably start working on this now,” Scanlan said.

Another area ripe for improvement: reporting by the firms that hire lobbyists. While 33 other states have such regulations, New Hampshire does not.

If the state’s methods of tracking the role of money in politics falls short, so do its systems for tracking the financial interests of elected officials and top appointees.

Financial disclosure

The current Statement of Financial Interests form asks for the name, address and type of business from which the official or a family member received more than $10,000 in income. There is no requirement to list the family member’s name or the scale of the financial interest as one finds with federal disclosure, which provides a set of dollar ranges. And unlike federal disclosure, New Hampshire does not require reporting on assets.

The form’s section for declaring a “special interest in any of the following businesses, [etc.,]” provides minimal detail. If the filer has a reportable interest, he or she need only check a box to complete the form. Further description of the nature of the filer’s interests is not required.

To take just one example of what is left unreported, William Ardinger, a trustee of the University System of New Hampshire, filed in 2010. Ardinger reported that he is a shareholder in the law firm of Rath, Young and Pignatelli. He checked the boxes for “practice of law” and “education.”

But Rath, Young and Pignatelli lobbies on behalf of trusts, credit unions, private corporations, public utilities, health insurance companies and the list goes on. If the law firm successfully promotes government decisions that benefit those clients, it benefits the firm. As a shareholder, Ardinger would gain accordingly, but his form gives no indication of those connections.

The financial disclosure process encompasses close to 3,000 individuals, including lawmakers, top executive branch officials, and members of boards and commissions. The sheer volume might explain why compliance can vary. For the most influential bodies, such as the Health Services Planning and Review Board, just about all members file. But the power of the board or commission is no guarantee of compliance. The Adult Parole Board had just one member submit her disclosure form in 2011.

The board’s executive assistant, John Eckert, said he gave the disclosure forms to all of his members. “I didn’t know that they didn’t send them to the secretary of state,” he said. Eckert said no one at that office ever contacted him to tell him any forms were missing. As for why he didn’t check himself, he said “It’s easy to overlook because it doesn’t affect our day-to-day business.”

There is no clear process to ensure compliance. In theory, that job falls to the Department of Justice. In practice, compliance relies on the administrator of the governmental body, from the entire legislature down to the smallest advisory commission, to remind the members to complete the form. If that person fails to act, it’s unlikely that any authority will step in.

“We respond if someone makes a complaint,” Associate Attorney General Richard Head explained. “Beyond that, we don’t assign staff to enforce this.”

Head noted the state has scores of boards and commissions, ranging from the Parole Board to the Nash Stream Forest Citizens Committee. If the secretary of state’s staff requested assistance, Head said his department would be able to provide it. “But,” he added, “it would be a matter of pulling someone off of doing something else to do that, and you have to judge what is most important.”

The same problem of data collection and data sharing that is found in campaign finance reporting holds true for financial disclosure. There is no system that allows filers to enter their information into a database. All data is stored as PDF files, accessed through a static web page. Filers can submit their financial disclosure information online. However, once that form is submitted, the information is only available as a PDF.

At the end of the day, the state’s financial disclosure law provides few useful details and what little data it assembles defies easy analysis to all but the most dedicated research team with the time to enter information into a spreadsheet.