BIDDEFORD — The alleged use of a line of credit by the president of the Franco-American festival La Kermesse is under investigation by the Biddeford Police Department and the Maine Office of the Attorney General, according to the organization’s Vice President Raymond Gagne.

Gagne said that Priscille Gagnon, who cited personal reasons when she stepped down from active duty as president early this spring, retained access to a line of credit with PeoplesChoice Credit Union that the La Kermesse board voted to close in 2004.

At that time, the organization borrowed money from Saco & Biddeford Savings Bank, said Gagne, to pay off the credit line from PeoplesChoice.

Unbeknownst to the organization’s board, Gagnon kept the line of credit open, said Gagne. When he found out the account was still open, “I was dumbfounded,” he said.

When contacted by telephone this morning, Gagnon said only, “No comment.”

About six months ago, PeoplesChoice notified La Kermesse assistant treasurer Leo Bourgeault that payments on the account had fallen behind.

No official accusations have been made citing misuse of the account, but Gagne said the organization’s board members were in the dark about use of the PeoplesChoice line of credit in La Kermesse’s name because Gagnon was the only one with the key to the post office box.

Treasurer Paul Gagne said that in addition to the line of credit, other accounts are also being reviewed by authorities, including the organization’s debit card from Saco & Biddeford Savings Bank.

Paul Gagne said there is no indication that money is missing from that account, but added that the group was awaiting the results of the investigation.

The Biddeford Police have referred all questions about the investigation to the Attorney General.

That office did confirm the investigation today. Spokeswoman Kate Simmons said her office was investigating “the financials and financial management of the La Kermesse organization. We’re diligently working to investigate this matter,” including any issue of possible misconduct, she said.

This is just the latest in a series of financial and other problems plaguing the organization, starting with last year’s festival.

Because of lack of finances, the block party and fireworks traditionally held the day before the official start of the festival were canceled.

Then heavy rain caused low turnout at the festival.

The amusement company reportedly left town without paying approximately $14,500 it owes La Kermesse.

In addition, a former sponsor, who previously paid $10,000 to the organization, died a month prior to the event.

Because of the rain, there was severe damage to St. Louis field where La Kermesse traditionally took place. The city claims it is owed $25,000 to pay for repairs the city made to the field ”“ a claim that organization board members deny.

The city has also told organizers that La Kermesse can no longer be held on St. Louis field.

This year, for the 28th annual La Kermesse, a scaled-down version of the festival will be held June 25-26 at the Biddeford Ice Arena and Expo.

— Staff Writer Dina Mendros can be contacted at 282-1535, Ext. 324 or dmendros@journaltribune.com.