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Press Release

For Immediate Release
July 28, 2014

Communications Office

Governor Hassan’s Veto Message Regarding HB 685

CONCORD – Governor Maggie Hassan released the following message after vetoing HB 685 today:

“By the authority vested in me, pursuant to part II, Article 44 of the New Hampshire Constitution, on July 28, 2014, I vetoed House Bill 685, an act related to state agency communications, because it could place the state in significant financial and legal jeopardy while violating the constitutional separation of powers.

“I have great respect and appreciation for the legislative audit process, the auditors at the Office of the Legislative Budget Assistant, and the value that thorough audits provide to taxpayers, executive department agencies, and policy makers. That is why I issued Executive Order 2014-3, directing state agencies to develop formal and public plans to address audit recommendations, and to update the public on their progress twice a year.

“But the changes in House Bill 685 pose serious risks that could drive up the costs of state government by undermining the state’s ability to attract competitive bids for goods and services and the state’s position in pending or threatened litigation; undermine the constitutional separation of powers by making it nearly impossible for agency heads to receive thoughtful, privileged legal advice; and permit future legislatures, if they choose, to politicize the audit process.

“Today, state agencies and the Legislative Audit Division have a constructive working relationship. But, from time-to-time, the Audit Division asks for access to documents that executive branch agencies consider confidential or privileged under the state’s existing right-to-know laws.

“Under current law, those confidentiality disputes are adjudicated by the Attorney General’s office. This legislation would shift settlement of those disputes to the legislative Fiscal Committee. The legislative Fiscal Committee is required to meet in public, and thus the mere act of the Fiscal Committee “deciding” whether documents should be made available to the Audit Division would likely result in the documents being made public.

“For example, bidders often provide confidential and proprietary information about their systems, their methods and even their technology when responding to state bid requests. They do so with the understanding, based on existing New Hampshire laws, that this information will not be made available to their competitors. Under this legislation, those documents could be made public through the Fiscal Committee and Audit process. That would seriously undermine the state’s ability to attract competitive bids for goods and services.

“Agencies often have to wrestle with difficult decisions, including on how to best implement laws that are likely to face legal challenges. Agencies seek out privileged legal advice so all options available can be fully vetted and assessed. This legislation violates the fundamental separation of powers between the executive and legislative branches by making it impossible for executive branch officials to receive confidential and privileged legal guidance. It also places the state in serious legal, and thus financial, jeopardy.

“Despite the legislative attempt to do otherwise in this bill, it is well-settled law that attorney-client communications once shared with a third party lose their privileged status. That means legal opinions shared with the Fiscal Committee will become available to opposing counsel in pending or threatened litigation. This will have a chilling effect on the ability of state agencies to have a full and open dialogue with their legal counsel and in turn undermine the quality of the advice received. The right of agencies to engage in privileged communications with their legal counsel is the best way to protect taxpayers from legal risks and to ensure that agencies implement legislative intent. The release of such documents could result in costly legal battles and decisions.

“Finally, this legislation risks politicizing what has long been respected as a nonpartisan process. The Audit Division has broad powers to audit not just state agencies, but contractors. Those audits are frequently selected by legislative committees. Losing bidders frequently try to gain access to the confidential business information of their competitors; information that is not available under the state’s right-to-know law. Under this law, influential businesses, or legislators, could push for legislative audits of certain contractors, gaining access to information that has been denied by the courts and the legislature.

“Our constitution establishes a mechanism for settling disputes between the legislative and executive branches – judicial resolution. I would be open to legislation that would allow a judicial magistrate to examine documents to ensure that they are being provided where appropriate pursuant to state law.

“This legislation risks politicizing the audit process, violates the separation of powers, and presents significant legal and financial risks to the state. Therefore I have vetoed House Bill 685.”