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State to Meet With College

Published in print on July 15, 2011

By Rick Jurgens, Special to the Valley News

State regulators have set a meeting for today with Dartmouth General Counsel Robert Donin to ask the college about its interpretation of a 15-year-old law that requires public disclosure of information about nonprofit organizations' dealings with private companies in which trustees have interests.

Terry Knowles, deputy director of the Charitable Trusts Unit of the New Hampshire Department of Justice, said the meeting had been scheduled to discuss issues raised in a story in the May 8 Valley News.

That article reported that while Dartmouth appeared to have generally complied with 1996 law requiring it to disclose the size of its transactions with firms owned or managed by its trustees, and identify interested trustees, it had failed to comply with another provision of the law that requires disclosure of the fees paid to those trustees.

Knowles said the purpose of the meeting was to allow Dartmouth "to speak with us about their interpretation of the law."

Justin Anderson, a Dartmouth spokesman, did not respond to telephone messages seeking comment on the planned meeting. In a letter sent to the Valley News May 12, Donin said that the college "provides extensive disclosures in multiple forms regarding investments" and that state and federal officials had never questioned the adequacy of those filings. Donin added that the college had "informed the Attorney General's office that it will be glad to provide any further information they require" and said that the college would "take whatever steps are appropriate to ensure we are fully compliant with all relevant regulations."

Knowles said that four members of the staff of the CTU had been rereading the statute in order to determine its meaning. The office also planned to review the legislative history of the law, she said.

The review of Dartmouth's compliance with the law had been delayed by a transition of the leadership of the Charitable Trust Unit to new director Anthony Blenkinsop, Knowles said.

Since 2004, Dartmouth has publicly disclosed its commitments to invest up to $205 million in private funds owned or managed by current or former trustees or members of the trustees' investment committee. Nonpublic information reviewed by the Valley News showed that at the end fiscal 2009 the value of the college's stakes in such funds was about $224 million.

But the college's public filings have failed to disclose "the amount of the benefit" paid in each transaction. Knowles and two individuals involved in drafting and passing the law told the Valley News that the college did not appear to be meeting its obligations to disclose "benefits" paid to interested trustees.

Nonpublic information reviewed by the Valley News that the payments to fund managers include annual management fees ranging from 1 to 3 percent of assets under management or committed capital. In addition, managers collect performance -- or incentive -- fees ranging from 10 to 30 percent of posted profits. Some funds exclude returns of up to 10 percent from profit calculations.