GOP leaders demand answers over lost money

State Senate Republicans are demanding answers as to how the state lost nearly $20 million with an investment gone bad. They are asking State Treasurer David Lemoine to appear before the Legislative Council as soon as possible.

However, Democratic leaders have said that it is unnecessary for him to appear before the council, and the matter will be handled within the Appropriations Committee Dec. 12 and 13.

The investment was in Mainsail II commercial paper. The assets were frozen when the company’s rating slipped from highest to subprime within two weeks over the summer.

Senate Minority Leader Carol Weston of Montville and assistant floor leader Sen. Richard Rosen of Bucksport are asking why it took so long for the matter to be disclosed.

“The treasurer is elected by the Legislature’s majority party and therefore should be held accountable for his actions by the Legislature,” a letter to legislative leadership written Tuesday stated.

In addition to the length it took to disclose the loss, Weston and Rosen have asked for a list of investments made by the treasurer, disclosing any that may be risky. They also want to know how Lemoine plans to presume the debt, and when the investment will be paid. Finally they are asking for an explanation of the $28 million shortfall in the proposed gift card unclaimed property fund.

“We are also concerned that the treasurer’s woefully inflated revenue estimates pertaining to the state’s unrealized collection of un-used gift cards and gift certificates has left the state budget in an even deeper hole because of unrealistic budget projections,” the letter stated.

Lemoine had said previously that a financial adviser from Merrill Lynch told the state that the investment met state criteria, and Mainsail had top ratings.

In response to Weston and Rosen’s letter, Senate President Beth Edmonds and Speaker of the House Glenn Cummings said the matter is being investigated and Lemoine will appear before the Appropriations Committee Dec. 12 and 13 to answer questions.

Rep. Jayne Crosby Giles, R-Belfast and a committee member, has already asked many of those questions, today’s letter stated.

“The Appropriations Committee is the Legislative Committee with jurisdiction for fiscal issues,” Edmonds and Cummings wrote. “They are managing that responsibility thoroughly and competently. It is unnecessary to have Treasurer Lemoine appear before the Legislative Council.”