The phrase "permeated every stratum of the populace" is the clue. The legislators recognized that the problem was everywhere. The contrast is that they said it was a universal problem but acted as if only their local area mattered. We need a word that means they "publicly grieved" or "acknowledged" this fact.

Evaluating the Choices (Grammar & Logic Audit):

- A. repudiated: (Logic Trap) To reject or refuse to accept. If they rejected the idea that the problem was universal, then helping only their own people would be consistent, not a "nonetheless" situation.
- B. lamented: (Correct) To express grief, sorrow, or regret. This fits perfectly: they lamented that everyone was suffering (the universal rhetoric), but they nonetheless acted only for their own voters (the selfish reality).
- C. slighted: (Opposite) To treat with disrespect or ignore. Like "repudiated," this would make their selfish actions consistent rather than a contrast.
- D. gainsaid: (Vocabulary Trap) To deny or contradict. If they denied the problem was widespread, the "nonetheless" would not make sense.
- E. understated: (Logic Trap) To represent as less than it actually is. This is similar to "downplayed." Again, this lacks the necessary contrast with their parochial actions.

The Correct Choice:
Lamented (B) is the only option that establishes the "public concern" necessary to create a logical tension with their "private/local actions."