NH Retirement Board Chairman Accused of Wrongdoing

August 4, 2005 (PLANSPONSOR.com) - The New Hampshire Retirement System (NHRS) Board of Trustees has found that its chairman, Edward Theobald, failed to report an offer of free stock from a start-up company wanting a $10 million investment from the retirement fund.

Public documents obtained by the Nashua Telegraph spoke of Theobald’s dealings with Hermes Technology LLC, a company trying to develop a commercial market for equipment used to detect weaknesses in deck structures of highway bridges.   An investment manager claiming to be a principal with Hermes, Joseph Scanlon, offered Theobald 2% of the company for $500,000.   Theobald said he didn’t have that kind of money, so Scanlon then offered him a seat on the board and free stock in the company.

“I immediately indicated to him that was impossible and that trustees are never placed on the board of advisory committees or any of the corporations in which they invest,” Theobald said, according to the newspaper.   He said he rejected all compensation offers after the NHRS’s legal counsel told him it would be improper, and he did not feel the need to tell the trustees of Scanlon’s repeated offers.

The board also said that Theobald wrote a letter on state stationery strongly soliciting donations from vendors of the NHRS to a fundraiser golf tournament benefiting a fund for families of killed firefighters.   The trustees just voted last month to make such a solicitation a violation of its ethical code, the newspaper said.

Theobald and his attorney deny any wrongdoing, and Theobald denies knowing that the trustees’ code of ethics banned him from profiting personally from investments the system made.

Governor John Lynch says he will not reappoint Theobald to the board he has served on since 1997.