May 4, 2007 | Read Time: 3 minutes
The Bill & Melinda Gates Foundation is under fire from several blog writers because of a Los Angeles Times article. It is one of several by the newspaper that point out situations in which foundation stock holdings appear to undermine the goals of its giving.
In today’s article, the Times raises questions about whether Berkshire Hathaway stock donated by Warren Buffett to the Seattle grant maker creates a conflict for Gates’s charitable work in Sudan.
Berkshire Hathaway invests in a company, PetroChina, that is owned by a Chinese government petroleum corporation that drills for oil in Sudan. The Sudanese government uses oil proceeds to support a militia tied to atrocities in the Darfur region, according to the article.
Mr. Buffett has defended his company’s holdings, saying that the oil company Berkshire invests in does not itself drill for oil in Sudan.
But while benefiting from donations of Berkshire stock, the Gates Foundation has provided several million of dollars in grants to relief groups that work in the region. And some blog writers see this as a contradiction.
“The L.A. Times again points out the internal contradictions in the programs the Gates Foundation funds and the investments that fuel the donation,” writes Kevin Jones on Xigi.net, a Web site about socially responsible investing. “Once more, they are being dinged for letting their money exist in two mutually inconsistent worlds; one pocket purely focused on highest return alone and the other, smaller pocket, trying to save the world.”
According to NomadNet, a blog that writes about Africa and humanitarian aid, such links between philanthropy and Africa’s problems are common.
“It’s hard to keep your hands clean in this world. But that’s the way things go in the aid business,” writes Michael Maren, a former U.S. foreign assistance worker. Every day, he writes, companies hurt Africa, “but then invest in aid projects.”
Other bloggers say the controversy has marred Mr. Buffett’s image as a philanthropist.
“I don’t think Buffett is greedy. His generosity is legendary. But I do think he, like millions of Americans (and people around the world) has simply lost track of his priorities,” writes an anonymous blogger on the Wizard, fkap,
a self-described Web site for an “explorer in cyberspace and a crusader for freedom on the Internet.”
But Mr. Buffett does have some supporters.
“I guess these activists think that if PetroChina would just leave Darfur, all the violence and bloodshed would cease” if Berkshire divested, writes Cody Willard, an investment manager, on his TheCodyBlog.com. “What do these well-intentioned activists expect to happen when the government and people and few businesses in Sudan are completely isolated and without access to any capital? Do they expect the government gently to capitulate?”
What do you think? Is the Gates Foundation facing a conflict of interest by accepting Berkshire Hathaway stock? Is Mr. Buffett’s image as a generous philanthropist challenged by his decision to not divest? Click on the comments link just below this posting to share your thoughts.
