Fiscal panel orders immediate audit of YDC claims fund

Yahoo

18-04-2025

The Legislative Fiscal Committee unanimously approved the call of Senate President Sharon Carson on Friday for an immediate audit into the claims fund that awards damages to alleged victims of sexual and physical abuse at the former Youth Development Center in Manchester.
The surprise decision short-circuited the bid of fund administrator John Broderick, a former state Supreme Court chief justice, who had asked the budget oversight group for another $10 million to keep his office functioning through June 30, the end of the current fiscal year.
The fiscal committee, a joint House-Senate panel, first voted along party lines, 6-4, to table Broderick's request for more money with all Republicans in support of setting the item aside while all Democrats wanted to take it up.
Carson had written her colleagues that she wanted Legislative Budget Assistant Michael Kane to direct his staff to do a 'thorough financial and performance' audit.
'The financial condition of the YDC fund has sparked deep concern regarding the processes employed to resolve cases called into doubt whether victims are getting the resources they need,' Carson said in a statement.
'The YDC Settlement Fund was supposed to ensure that victims were not overlooked and cases remained victim-oriented. Given the large amount of money this fund disperses, the Legislature needs more information about where the money goes.'
During the committee's monthly meeting on Friday, Carson said she didn't know enough about the fund's operation to assure the public the money is being properly spent.
'I think we need a lot more detail. These are tax dollars, and the public has the right to know how these tax dollars are being spent. If anyone were to ask me, I could not answer the question,' Carson said.
Broderick left the latest meeting without comment but in the past said he would share whatever financial information the committee needs to make an informed decision.
In March, Broderick had asked the same committee for $15 million, warning that he might have to lay off staff and terminate the lease for office space if he didn't receive it.
At that time, the committee chose the unusual course of meeting behind closed doors for more than an hour with Broderick to go over the fund's books.
After that executive session, the fiscal panel approved giving the fund another $5 million.
The Legislature had approved $100 million for the fund when it was created in 2023. Last year it added another $60 million.
Attorney General John Formella has told legislative leaders it's likely going to cost $500 million or more to settle the more than 1,300 requests for damages from victims, as the average award is about $500,000.
A list of 'concerns'
House and Senate budget leaders have said some of their biggest financial questions about the fund are over:
• Administrative expenses: Rep. Peter Leishman, D-Peterborough said the fund is spending more than lawmakers expected on overhead, much going to 'outside counsel' firms hired by Formella.
• Legal Fees: Several members are upset that Broderick in some cases has approved paying out victims in timed payments over many years while cutting a check right away to a lawyer representing that victim and,
• Client Loans: Some of the money from the fund has gone to pay back high-interest, 'pay day' like loans clients took out who couldn't afford to pay their lawyer out of pocket. Under these deals, these loans are paid back to financial firms not connected to the lawyers.
Performance audits can take more than a year to complete. Legislative Budget Assistant Kane said he will quickly convene a meeting of his staff to do a much quicker review in order to complete an initial report in time for the committee's next meeting on May 19.
A final report will be done by June 6, which will make it available to House and Senate conferees as they work on reaching a comprehensive compromise state budget, Kane said.
Senate Finance Committee Chairman James Gray, R-Rochester, said he moved to table Broderick's request for another $10 million now because the Executive Council has yet to act on the $5 million his panel approved in March.
Gray noted the state's own fiscal picture makes it difficult to give Broderick any more money in the current year.
That's because Gov. Kelly Ayotte estimated the state will end June 30 with a $81 million deficit.
The $16.3 billion state budget the House approved last week assumes the red ink will already total $149 million.
'I am sitting here with at least an $80 million deficit,' Gray said.
The House-passed budget sets aside another $10 million each of the next two years for victims.
The law calls for the administrator to apply directly to the Legislature for funding.
Broderick has told legislative budget writers the fund is going to need $150 million over the next two years to process claims.
Last year, lawmakers placed an annual $75 million cap on payments to come out of this fund.
'Transparency for the process and for the Fund are very important,' said Jennifer Foley, the fund's general counsel. 'We will timely respond to all information requests that come and will work cooperatively with the fund administrator.'
In an effort to put pressure on the Legislature to approve additional money, the law firm of Shaheen and Gordon released statements prior to Friday's meeting from 30 of its clients about the abuse they suffered.
Patricia Johnson wrote she was assaulted and suffered a miscarriage during her time at YDC.
'If those responsible had done their jobs — if they had truly protected me — I would have a 51-year-old child today,' she wrote. 'But they didn't. They failed me then, and now they want to fail all of us again, by turning their backs and refusing to acknowledge the harm that was done.'
Robert Hensley wrote that he was raped multiple times at a YDC barn by grounds staff and never got medical care. He kept it to himself for over 50 years. 'Until recently, I never told anyone about what happened — not even my family. I carried this burden alone for decades. I am now in my seventies. I deserve peace. I deserve recognition,' Hensley wrote.
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