Pickens gave $165 million to Oklahoma State University (OSU), and
Mike Holder, the schools athletic director, made the decision to
invest the programs new money with a hedge fund headed by Pickens,
BP Capital Management. In the Times article, Holder clearly stated
that it was his decision Pickens did not attach that string to the
gift. Also, in the twelfth paragraph of the Times story, reporter
Stephanie Strom finally got around to including a spokesman for BP
Capital, who said the fund had waived all fees and our share of the
profits on their investments for the OSU investment.
Still, the Times devoted nearly 1,000 words to
questioning the donation. Strom included a lawyer who claimed
Pickens was manipulating charity for his own benefit, even though
he had waived fees and profits on the OSU investment and had given
away $165 million in the first place.
CNNs Andy Serwer did the same. Hes not benefiting
directly, but yknow, it does raise some questions, I think, Serwer
said. Co-host Miles OBrien pointed out that the school still gets
the dough, which Serwer affirmed. Soledad OBrien asked if any of
it was illegal. Its not illegal at all, its just it raises
questions, Serwer insisted. I would say its a little cute.
Hypocrisy, Thy Name Is Serwer
Regardless of the American Morning teams definition
of cute, the choices of philanthropists and investors are theirs
to make in a free market, as long as they follow the law. The
wealthy commonly make donations, enlisting attorneys and accountants
to help them avoid the punishing U.S. tax code.
In fact, CNNs Serwer advised his viewers to get cute
with the tax code on the Dec. 26, 2005, American Morning. He
wasnt talking to billionaires, of course, but ordinary individuals
who apparently, in his estimation, deserve to save money. Serwer
encouraged his viewers to Maximize those charitable deductions,
your 529 college plans for the kiddies. And your gift exclusion,
anyone in America can give anyone else $11,000 tax free. He gave
further advice on how to lower your 2005 tax bill:
If youve lost some money in stocks this year and want to just sell those dogs, do it before the end of the year, because you get those capital gains this year, $3,000. And then you can be left the capital gains can be held over, if it's more than $3,000, until the next year. Now, what about some expenses? You should pre-pay them. This again, accelerate those deductions. If youre going to be paying, prepaying taxes on a quarterly basis, do it in December. Also, the same thing with mortgage payments. Do it in December so you can write it off. And lower your 2005 tax bill. And, you know, April 15 is around the corner.
Yet, Serwer and
the Times skewered Pickens for using existing legal tax breaks when
making charitable contributions.
Boone kinda taking advantage of the hurricane relief
tax code provisions to do this, Serwer said, to which Miles OBrien
chimed, Ouch. He continued groaning with disapproval as Serwer
described the tax break.
It is common for schools and other endowed institutions
to invest their charitable gifts so they may yield the best return
available to the institution. That was exactly what OSU wanted for
its athletic department, explained Holder, who had previously
invested money for Cowboy Golf (a charity benefiting a division of
OSU athletics) with Pickens fund. I may not be the smartest person
around, but when youve invested $6 million with someone and theyve
turned it into $31 million, it makes you feel confident enough to
have all your investments with that person, Holder told the Times.
Just as countless other donors have done for their alma
maters, Pickens gave money that will underwrite a new equestrian
center, new track and field facilities and completion of the
football stadium, the Times reported.
Though the media love to criticize the federal budget
deficit, they also commonly attack private businesses that achieve
beyond what the government can accomplish. Colleges and universities
cannot operate on taxpayer dollars alone, and gifts like Pickens
often make new facilities, faculty positions and programs possible.
