Gunstock's money: With annual audit, internal investigation unfinished, how did copy of donation check become public?

GILFORD — As stories about the resignation of Gunstock Mountain Resort’s management and growing demands for commissioner resignations hit national news, on July 27, Rep. Mike Sylvia (R-Belmont) released a photocopy of a 2020 check from Gunstock to the political committee of Gov. Chris Sununu. Sylvia also issued a statement calling the donation “clearly improper and possible violative of the law.”

Recent coverage also examined the context under which the donation was made and asked questions about whether such a contribution, small in size but notable given Gunstock’s recent turmoil and the governor’s weigh-in, was appropriate. 

Sylvia's release of the photocopied check also raises questions about how the delegation chair had access to Gunstock’s financial records. 

While the existence of the donation is publicly accessible through state campaign finance records, the photocopy of the check, which includes the date it was processed and a redaction of what is likely the account number, is not. 

Sylvia did not respond to multiple requests for comment on how he accessed the check copy. He is up for re-election for his seat in Belmont this September.

The check was released less than 36 hours after a heated public meeting where the balance of power on the Gunstock Area Commission changed: Commissioners Jade Wood — who had long acted as an unofficial mediator on the commission — and Doug Lambert — who had often voted alongside former Commissioners Peter Ness and David Strang – joined the Gunstock management, employees and the attending public in demanding the resignation of the then chair and vice-chair. 

When the check was released, it had been exactly a week since Gunstock senior management resigned. The governor had come out in support of Day and his team and criticized both the commissioners and members of the delegation, including Sylvia.

It is not standard for the chair, or any member, of the county delegation, to have access to Gunstock’s financial records and information, according to Gunstock Chief Financial Officer Cathy White. 

Only signatories on Gunstock’s accounts have access to those records, White said, and “only officers of Gunstock Mountain Resort and the chair of the commission have signatory power.” Gunstock’s officers are members of the senior leadership, who resigned on July 20 before being rehired on Aug. 1.

White continued that she believed the check had been accessed by or shared with the delegation chair “improperly” after the senior management tendered their resignations. 

Ness, who was GAC chair when the check was released, did not respond to request for comment. 

Sylvia has maintained that management resigned as a power play to evade a legal investigation.

“They walked out because they had an invitation to speak with lawyers,” Sylvia said in an interview on July 29. The statement he released with the check alleged that management were asked to appear before the lawyer conducting the GAC internal investigation and to turn over documents. 

In the statement that accompanied the release of the check, Sylvia referenced the internal investigation and this year’s annual audit of the mountain, and said they were bringing to light “this and other financial irregularities.”

Though a GAC internal investigation is currently underway, GAC records do not indicate that Gunstock’s financials are within its scope.

On April 20, the GAC voted, with Wood in dissent, to hire a lawyer to fulfill Sylvia’s request that the GAC “investigate the genesis of their recent lawsuit and consider reimbursing the County Delegation for their legal expenses.”

Last winter, then Gunstock Commissioners Gary Kiedaisch, Rusty McLear, and Brian Gallagher voted for the GAC to take legal action against the county convention. They believed that the delegation planned to remove them from the GAC because of their previous request that the delegation remove Ness for alleged ethics violations. 

A report from Attorney Peter Callaghan of the PretiFlaherty law firm, hired to respond to Sylvia’s request, was reviewed by the GAC on July 1. This report outlined Callaghan’s investigation and findings regarding its ethics policy and allegations against Ness made by former commissioners. It laid out a recommendation to investigate ways the GAC could prevent incurring similar legal expenses in the future and whether the GAC was legally exposed by the suit.

Callaghan’s report lists no investigation into or recommendation to investigate Gunstock’s financials or donations. Lambert, who currently serves as chair pro tem of the GAC, said Callaghan confirmed to him that the scope of investigation had not broadened or changed. The internal investigation is expected to conclude by the end of the month.

Sylvia also wrote in his release that the GAC were “the ones who had uncovered this financial malfeasance,” and referenced Gunstock's annual audit. 

Ness created the GAC’s audit subcommittee to provide oversight over the audit process: he appointed Strang as committee chair alongside Rep. Barbara Comtois (R-Barnstead) to represent the delegation, and John Plumer, a former representative and current candidate for state senate, to represent citizens.

The purpose of this committee was, according to the May 18 meeting minutes, to “extend an olive branch to the BCD.” Several delegates had concerns that the GAC was not scrupulous enough in its financial supervision of Gunstock’s operation and management. An example of this concern was expressed by Comtois in a guest column published in The Daily Sun on Aug. 1.

“Frankly, I was amazed that the management was so upset when an Audit Committee was formed,” Comtois wrote. “Apparently, this practice of having no oversight has been going on for several years. No one was looking out for the taxpayers.”

There is no known public record of the audit committee’s meetings, agendas or minutes. The Daily Sun has submitted a Right to Know request for those records.

At its Aug. 15 meeting, the GAC voted to release a letter from the auditing firm, Vachon Clukay & Company PC, on the status of the ongoing annual audit. The meeting minutes, including the letter, have not been published yet.

The letter stated that the audit was behind schedule due to interruptions and to requests that it review additional information outside its intended scope and timeframe. These requests would likely also increase the audit’s price tag, Lambert said.

According to the meeting, the audit firm received a list of items for requested review from the audit committee. Lambert described this list as “very substantial, it mostly involved checks that have been written, some actually beyond the year that the audit firm would be looking into.” Lambert said the auditor characterized these requested items as “unprecedented.”

Lambert said in an interview he believed the copy of the donation check to Sununu was included in materials the audit subcommittee requested and received from Gunstock’s bank. 

Plumer said he did not know if the donation check was included in the list of items reviewed by the audit committee and directed questions about the committee to Strang, who could not be reached for comment. Plumer also said he did not know where Sylvia accessed the copy of the check. Comtois did not respond to a request for comment. 

When asked about how the copy of the donation check was accessed by Sylvia and made public, Lambert responded measuredly.

“It is my opinion that there have been a great amount of leaks and dissemination of information that should have remained confidential until the entire commission voted to release it,” Lambert said. He also said that there has been no vote by the GAC to release information from the ongoing audit to the delegation.

The public deserves to be informed, Lambert said, but it is important for sensitive information, such as financial information, to be issued through official and proper channels. 

“There’s been a lot of speculation swirling around caused by a lot of reckless talk and release of partial information,” Lambert said. “This is one of the problems that caused a lot of the tension we saw with the management team.” Lambert felt that critics of the management had used the ongoing audit and legal investigation as a platform to spread speculation about legal wrongdoing without context or foundation. 

The Audit Subcommittee was disbanded by unanimous vote of current commissioners on Aug. 15. Lambert said during the meeting that all matters requested for review by the audit committee would, going forward, be undertaken by the full commission. The audit is expected to conclude at the end of September.