'Oops!' They Did It Again
NY Times, CNN sling mud at businessman Pickens’ charitable gift, calling it a ‘controversy’ even though actions were legal and school benefits from the gift.

“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.”
– Mike Holder, athletic director for Oklahoma State University, beneficiary of Boone Pickens’ donation

By Amy Menefee
Free Market Project
Feb. 24, 2006

     Audience beware: when the media say “some” unidentified people or unnamed “critics” are questioning something – it means the media are questioning it.      That’s what The New York Times did to billionaire investor and philanthropist Boone Pickens on February 24. The Free Market Project is one of many beneficiaries of Pickens’ generosity. Pickens made a massive donation to his alma mater’s athletic program, but the Times jumped on the contribution to question his ethics, saying “to some,” it raised ethical questions.      Despite the facts that Pickens’ actions were legal, the Times and CNN’s “American Morning” made it appear as though a huge ethical controversy was at hand. CNN’s Andy Serwer also frowned on Pickens’ use of tax breaks – after Serwer had advised viewers on an earlier show about how to avoid taxes!	Â
		NOW: CNN’s Andy Serwer criticizes philanthropist for using tax breaks
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		THEN: Andy Serwer encourages viewers to avoid taxes

The ‘controversial’ gift
     “Billionaire. Makes a wonderful charitable contribution. Oops! Kinda takes it back, kinda sorta,” said CNN’s Soledad O’Brien, introducing the story on the February 24 morning show.

     That was, in fact, flat wrong.

     Pickens gave $165 million to Oklahoma State University (OSU), and Mike Holder, the school’s athletic director, made the decision to invest the program’s 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.

     CNN’s Andy Serwer did the same. “He’s not benefiting directly, but y’know, it does raise some questions, I think,” Serwer said. Co-host Miles O’Brien pointed out that the school “still gets the dough,” which Serwer affirmed. Soledad O’Brien asked if any of it was illegal. “It’s not illegal at all, it’s just – it raises questions,” Serwer insisted. “I would say it’s a little cute.”


Hypocrisy, Thy Name Is Serwer
     Regardless of the “American Morning” team’s 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, CNN’s Serwer advised his viewers to get “cute” with the tax code on the Dec. 26, 2005, “American Morning.” He wasn’t 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 you’ve 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 you’re 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 O’Brien 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 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,” 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.