News L.A. Times Investigation Slams Gates Foundation
posted by on January 6 at 13:55 PM
An in-depth L.A. Times story shows the Bill and Melinda Gates Foundation invests in businesses that directly undermine and contradict the foundation’s cheritable giving.
From the lead:
The Gates Foundation has poured $218 million into polio and measles immunization and research worldwide, including in the Niger Delta. At the same time that the foundation is funding inoculations to protect health, The Times found, it has invested $423 million in Eni, Royal Dutch Shell, Exxon Mobil Corp., Chevron Corp. and Total of France — the companies responsible for most of the flares blanketing the delta with pollution, beyond anything permitted in the United States or Europe.Indeed, local leaders blame oil development for fostering some of the very afflictions that the foundation combats.
Oil workers, for example, and soldiers protecting them are a magnet for prostitution, contributing to a surge in HIV and teenage pregnancy, both targets in the Gates Foundation’s efforts to ease the ills of society, especially among the poor. Oil bore holes fill with stagnant water, which is ideal for mosquitoes that spread malaria, one of the diseases the foundation is fighting.
Investigators for Dr. Nonyenim Solomon Enyidah, health commissioner for Rivers State, where Ebocha is located, cite an oil spill clogging rivers as a cause of cholera, another scourge the foundation is battling. The rivers, Enyidah said, “became breeding grounds for all kinds of waterborne diseases.”
The bright, sooty gas flares — which contain toxic byproducts such as benzene, mercury and chromium — lower immunity, Enyidah said, and make children such as Justice Eta more susceptible to polio and measles — the diseases that the Gates Foundation has helped to inoculate him against.
The Gates foundation made $1.4 billion in grants in 2005—which deserves a standing ovation. But a standing ovation is also in order for the L.A. Times for showing what we all know, but feel too cynical saying out loud: Charity, ultimately, is only stop gap work against root causes.
This devestating article makes that point plain by linking the charitable donor to the root cause.
More from the L.A. Times:
In addition, The Times found the Gates Foundation endowment had major holdings in:Companies ranked among the worst U.S. and Canadian polluters, including ConocoPhillips, Dow Chemical Co. and Tyco International Ltd.
Many of the world’s other major polluters, including companies that own an oil refinery and one that owns a paper mill, which a study shows sicken children while the foundation tries to save their parents from AIDS.
Pharmaceutical companies that price drugs beyond the reach of AIDS patients the foundation is trying to treat.
Using the most recent data available, a Times tally showed that hundreds of Gates Foundation investments — totaling at least $8.7 billion, or 41% of its assets, not including U.S. and foreign government securities — have been in companies that countered the foundation’s charitable goals or socially concerned philosophy.
Using “Blind Eye” investing, the Gates Foundation keeps its investment wing separate from its grant wing—in order to generate the most money possible for its charitable giving. As the L.A. Times shows, that may be a counterproductive philosophy.
It would be just as unethical for the Gates foundation to short change charities because it invested in less profitable securities. And if I make a bunch of money in oil stocks, then donate it all to organizations seeking to undermine the oil companies, isn't that better than letting the GOP make all the profits?
These sorts of ethical issues don't seem all that clear cut to me.
I agree about these issues not being clear-cut. The LA Times article is interesting, in that it raises complicated questions, but I hardly think it's a foolproof indictment of the foundation.
It's also important to question if the Gates Foundation divesting its shares in polluting/exploitive companies would really make a difference. Chevron is going to continue with business as usual whether the Gates Foundation invests in it or not.
Wow, just wow.
They're helping to create the destructive conditions and diseases that they're trying to relieve, in effect neutralizing any good that they're doing.
Sick, sick, sick.
Professional money managers can steer the foundation's assets away from oil, tobacco, alcohol and weapons and towards less destructive companies to invest in.
You'd think that they'd at least have some kind of socially responsible investment policy. Sheesh.
Why didn't the SEATTLE Times investigate this, rather than the LA Times? Scooped, right in our own backyard!
If everything has to be as pure as the wind driven snow, nothing would ever get done.
zzzzzzzzzzzzzzzzzzzzzzzzzz
Three cheers for the Gates Foundation, and Bill and Melinda.
L A and New York hate that all the money is in Seattle.
Solutions to health problems will be applied world wide - even where there are no possible ties to major businesses
Clean air and clean water equal better health - big news to who?
Hokum journalism - from Hollywood.
Fuck Bill and Melinda Gates.
The thing is, the money to be made is THERE, and this charity is snapping it up. Good for them... at the very least, it's staying out of the pockets of people who care ONLY about money, instead of people who are working hard to change the world. It's not like some high-fallutin' oil interest or international business investment firm wouldn't be taking these dollars if the Gates' weren't. All the Gates Foundation is doing is preventing the situation from being even worse than it would be. And they're making money from it. And they're going to keep going, and going, and going...
The problem with charitable organizations as we know them is that they are so painfully beauracratic, and so TENDER to everyone's feelings, that they often fail to make much difference. And when they run out of money (as most of them eventually do), the people who depended on them are SOL. It breaks real people's hearts, but without money, everyone is powerless to act.
I'm only looking on from my armchair, but the Gates Foundation has really blown me away. Running a charity like a corporation makes financial sense, but also hints at the promise of the charity behaving like a corporation, and (if Microsoft is a model), assassinating its competition. If there's one good thing that could possibly be born of skillfull ruthlessness, it might be the tangible elimation of AIDS in Africa. This might be the most intelligent charity in the world. Give it room to breathe and stop talking shit unless you have a better idea.
short comment to XX
go back to the video games and cheese gunk snacks
Josh, what else are they supposed to invest in? With $30 billion they have to invest in large cap stocks. Anything smaller and they would be buying companies outright (and having to manage them).
Energy companies are at least 10% of the market. You pretty much have to own oil companies. I bet you've got at least a few thousand yourself in your 401k.
Aw damned. And I thought these for-profit charities were supposed to be the newest way for capitalism to cure itself....
Andrew #4--Thank you!
The Gates Foundation has choices. Just as they choose where to give their money, they can also choose how to make their money.
Brad #9--I have a better idea. The Gates Foundation should divest from companies that create the problems that they are trying to fix.
I'm with chris @ #11, I was reading recently that once the Buffet money is dumped into the mix, the Gates Foundation will control something like 10% of all charitable funds in the world.* So since they don't really have the option of turning down contributors, they have to find something to do with the money that won't screw up the market, and the smallest percentage they can hold of the big caps is really the only option. It's a fine line that you walk when you control that much capital.
* Or something like that. It was a huge percentage of something large, whatever it was.
Josh, thanks for posting this - it is very important. But one thought: "But a standing ovation is also in order for the L.A. Times for showing what we all know, but feel too cynical saying out loud: Charity, ultimately, is only stop gap work against root causes."
From my perspective, the cynical thing is the opposite: To say that even though "Charity, ultimately, is only stop gap work against root causes," since we can never change the root causes, there is no point, so lets do charity. This is what you hear all the time in the NGO world, and basically what we are hearing here in these comments critical of the story: Since the Gates Foundation cannot change the situation, they might as well make money off of it and then try to do some good (and in the meantime, look good doing it). The oil companies will go on poisoning people in Africa. Maybe folks defending these investments would feel differently if you or your kids were at risk...
How about this: The Gates Foundation publicly divests from large companies that have been shown to harm local citizens. They make news. This creates pressure on the corporations and they change their practices.
Wait, don't tell me: no, it will never work, and the Foundation will go bankrupt if their returns fall a fraction of a percent, and the companies won't listen. Wasted effort - lets just keep doing what looks good and pays salaries.(note sarcasm)
Papayas and Andrew:
What exactly do you hope to accomplish by divesting from oil company stocks? At best, you might put a dent in the stock price. But that would only allow the oil companies and their cheerleaders to repurchase even more bargain shares at an artifically lower price. Meanwhile, their core business, which is unaffected by the stock price, continues to crank out record-making profits. The stock will inevitably go up as a result, and now the oil companies have made even more profits on their profits. And this helps aids and malaria victims how?
Investing suboptimally is purely about propping up your liberal sense of self-righteousness. In practice, being a dumb investor only helps the smart investors on the other side make more money.
The right thing to do is to pick an ethical cause and play to win on behalf of that cause.
If, in addition to divesting from polluting energy companies, the foundation invested in alternative energy businesses, it could help solve the root problem by lessesning the power of big oil, etc. this would have to be done in quiet, with small amounts over years, to keep from throwing markets off. The foundation could use the business expertise it is known for to investigate which other companies to invest in for the maximum return of product (less polluting energy sources). It seems to me that the largest charitable organization ever created can actually change the rules which charities operate under, rather than just staying with the status quo. And this type of socially responsive investing in other areas of commerce can become the norm for philanthropic funds. I really don't think The Gates foundation is going to run out of money anytime soon....
"If, in addition to divesting from polluting energy companies, the foundation invested in alternative energy businesses, it could help solve the root problem by lessesning the power of big oil, etc."
An excellent point - Gates et al. should fund alternative energy businesses and research. (So should the feds for that matter, and they do somewhat.) However, I still think they should generate those funds by investing in money-making securities, whatever they may be.
Did it occur to anyone that by being shareholders in these companies the Gates foundation can help affect changes in their enviromental policies?
#19,
And thanks to this great L.A. Times article, they just might now.
The Gates Foundation is run from the conscience of Bill Gates Sr. a partner at Preston, Gates, and Ellis law firm: in the IDX tower on floor 29, across from the downtown Seattle Public Library.
Gates Sr. and his wife are living in the illusion that they are loved here in Seattle. The reality is one of much more decline, as the people of Seattle are only becoming more frustrated with the ELITE, whom think they run the city, and that we should bow down to them.
I'd like to know how The Gates Foundation's mission statement of all people being equal when Bill and Melinda Gates live in a $70 Million house on Mercer Island. Does The Gates Foundation realistically think that everybody in America can live in a house that expensive?!
As a buddy told me in jail...They are people of the world....
Agree with JMW #2,
Interesting article, and Josh added some interesting insight, but really, anyone with a decently managed 401k will find those same investments in there portfolio.
What is the nature of international responses to health problems? What assumptions and intentions underlie aid programs? WBR LeoP
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