[Bob_Huntley]

Go to the New York Times to see the sleight of hand of Pickens gift to the OSU Golf Program.

This must be a compulsory course in business ethics at OSU.

As Edward Heath once said, "This is the unacceptable face of capitalism."

Bob

[Matt_Cohn]

Is there a link for this?

[David_Tepper]

Matt -

Go to www.nytimes.com
You can register to read the paper online for free.

As Warren Buffett said, "There may or may not be class warfare in America, but there is no doubt who is winning."

DT

[Craig Van Egmond]

Bob,

        I live here in Stillwater and work for OSU, I haven't read the article but I can tell you that ethics and morals have been thrown away since Boone Pickens donated that 165 million to the athletic program.  The administration is threating to use eminent domain on some low income houses here in town to build an athletic village as a monument to Pickens. OSU owns 24,000 acres in this county alone, and lots of places it already owns that could house THE village, but they want to destroy old established neighborhoods because they are close to the football stadium. The greed and lack of regard OSU has shown for the city of Stillwater is appalling and sickening.  

Some students have created a pretty cool website:  www.boonestate.com

[Mike_Sweeney]

Of the tough jobs in life, University President has to be up there. Cornell and Harvard's President have both resigned in the past year under pressure. I knew a business friend who was invited on the Board of Trustees of one ACC school and then tossed when his stock tanked. However, not knowing anything about OSU, this President is clearly in "Grey" areas and the Board of Trustees is ultimately responsible.

[Craig Van Egmond]

I finally read the article and didn't have to register.

http://www.nytimes.com/2006/02/24/national/24pickens.html?_r=1&oref=slogin

Pretty sweet deal that's for sure, donate money to a charity who then transfers it back to you, so that you can manage your own donation while extracting some pretty good fees.  

[Dan_Callahan]

Based on these quotes from the article, I don't see what the problem is. Sounds pretty smart to invest the money with someone who has a track record of exceptional performance.

"Jay Rosser, a spokesman for Mr. Pickens and BP Capital, said, 'We've waived all fees and our share of the profits on their investments . . . '"

The university transferred ownership of the golf course to Cowboy Golf, along with about $6 million in cash, which Mr. Holder invested in Mr. Pickens's fund. . . and the cash Mr. Holder entrusted to BP Capital has quintupled.

"I may not be the smartest person around, but when you've invested $6 million with someone and they've turned it into $31 million, it makes you feel confident enough to have all your investments with that person," said Mr. Holder, who has also invested some of his personal wealth with Mr. Pickens.

[Craig Van Egmond]

Dan,

       I don't think anybody here is claiming that it wasn't a smart thing, actually it was borderline brilliant in my opinion, just maybe not too ethical and a conflict of interest.

[Craig Sweet]

Did I read somewhere that Sean Sutton, assitant coach to his father Eddie Sutton, was being paid $495,000?

[Craig Van Egmond]

Craig,

       Sean currently makes around 250,000, but will be making that once he gets the permanant head coaching job, which should be next season.

        No nepotism here at OSU.  

[PThomas]

250 k for an ASSISTANT job in COLLEGE!

what am I doing wrong......

[Craig Van Egmond]

Paul,

         Sean gets that as assistant coach and head coach designate.

         His new deal as head coach will be a 5 year contract worth $750,000 per year!!!!

         

[peter_p]

This explains why a golf coach gets promoted to athletic director.

[Craig Van Egmond]

EXACTLY!!!!

[Bob_Huntley]

and our share of the profits on their investments . . . '"


"I may not be the smartest person around, but when you've invested $6 million with someone and they've turned it into $31 million, it makes you feel confident enough to have all your investments with that person," said Mr. Holder, who has also invested some of his personal wealth with Mr. Pickens.

Dan,

Six to 31 million is quite good, but over how long?  I've got clients that I put in Wells Fargo at an adjusted cost basis of $1.51.... it closed at $64.50 today. It took a while to get there.

Bob

[Dan_Callahan]

Bob,

According to the article, "Cowboy Golf was split off from the O.S.U. Foundation roughly two years ago because, Mr. Holder said, he wanted greater flexibility to invest money for his golfers and assure control over the golf course, Karsten Creek, owned by the university.

"The university transferred ownership of the golf course to Cowboy Golf, along with about $6 million in cash, which Mr. Holder invested in Mr. Pickens's fund. At the time, Cowboy Golf's board was composed of Mr. Holder, Mr. Pickens and David J. Schmidly, the university president. It has since grown to nine members, and the cash Mr. Holder entrusted to BP Capital has quintupled."

Quintupling an investment in two years is pretty damn good. I can't blame Holder for wanting to go back to Pickens with the new cash. It's not Pickens fault that he happened to receive a significant tax break based on the Katrina exemption. I work at a private school, and we put the Katrina language in some of our fund-raising literature to make sure our alums and parents knew of this one-time benefit.

I guess I don't see who is hurt by the arrangement. Even if it smacks of a quid pro quo deal, the athletics program ends up with a huge contribution which will probably allow them to keep some sports that operate at a loss and would otherwise be subject to cuts. (Look at what is going on right now at UNH, where a number of sports are getting the ax due to budget cuts.)

[Dan_Callahan]

I guess the difference is that Pickens received some benefit from the gift, i.e., a big tax deduction. A parent would create a trust in most cases for purely altruistic motives. Having said that, I still have no problem with Holder giving the money back to Pickens to invest—in light of his stellar returns over the previous two years.

[Kevin_Reilly]

Typically a charitable fund would not want to have all of its eggs in one basket...standard portfolio diversification among a number of asset classes and managers.  

The article does not detail how the $165mm would be invested by BP capital, but going by the firm's website it would appear that the funds would be entirely invested in energy stocks and related securities.

BP Capital

"Past performance is not necessarily indicative of future results" is being forgotten with all the talk of "turning $6mm into $31mm".

[Steve_ Shaffer]

Isn't Karsten Creek quite expensive to play for a non-OSU donor? It's only $250 unless accompanied by a member. I wanna stay at the Boone Pickens Lodge.

www.karstencreek.net

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