New Emails Reveal Glaring Omission in Attorney General’s Report on FRM Scandal

May 13, 2010

Raises New Questions About why Report Only Went Through 2008

For Immediate Release
May 13, 2010
Contact: Kevin Smith
Phone: (603) 571-4710
Email: director@nhcornerstone.org

CONCORD, NH – One day after the Attorney General’s Office released its investigation into the FRM scandal, which scrutinized the actions of its own agency, along with the Banking Department and the Bureau of Securities Regulations, new evidence not included in the AG’s report has come to light that both the Attorney General’s Office and Banking Commissioner, Peter Hildreth, knew there were severe problems with the way Financial Mortgage Resources, Inc. of Meredith was operating just two months before the company collapsed.

Commenting on the new revelation was Cornerstone-Action’s Director, Kevin Smith: “It is very troubling that what would seem like very important pieces to understanding how this entire scandal was allowed to occur somehow did not make it into the Attorney General’s report. This new information should make it so obviously clear to the Governor and the Legislature that an independent probe is warranted in order to maintain the public’s confidence that this tragedy was thoroughly investigated.”

As reported in today’s Concord Monitor (5/13), an attorney on staff with the Attorney General’s Office, in September of 2009, sent an email to the Banking Department’s Deputy Director, Robert Fleury, raising severe concerns over FRM’s shady business practices. The email was then sent to the head of the Banking Department’s Consumer Credit Division, who then sent the email to Commissioner Hildreth encouraging him and Fleury to press the Attorney General to conduct a criminal probe.

However, when questioned about the emails yesterday, both the Attorney General and Commissioner Hildreth claimed that was the first they knew about the correspondences – even though the email was sent directly to Commissioner Hildreth just 7 months ago.

Further, given the fact that it appears both the Banking Department and the Attorney General’s Office had knowledge that FRM was not operating ‘above board’ as late as September of 2009, it begs the question of why the Attorney General’s report only investigated the matter up until 2008.

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CPR-Action is the legislative advocacy arm of Cornerstone Policy Research.

Cornerstone Policy Research is a non-partisan, non-profit research and education organization dedicated to the preservation of strong families, limited government and free markets.

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