Is someone not doing their homework at the Bill and Melinda Gates Foundation?
If you read a recent LA Times article the way I did, then it's apparently more difficult that it seems to do the world good without relying on a bit of evil. In what appears to be a deeply researched article by Times staff writer Charles Piller, The Bill and Melinda Gates Foundation is exposed for seeking returns on its financial investments from institutions that could simultaneously be undermining the efficacy of its altruism. For example, on the one hand, many of the Foundation's resources are dedicated to eradicating disease and it avoids investments in tobacco. On the other, writes Piller:
As of December 2005, it held at least $43 million worth of investments in companies tied directly to tobacco profits. They included Alcan Inc., one of the largest producers of cigarette packaging; and President Chain Store Corp., the Pantry Inc. and Seven & I Holdings Co., which earn a substantial part of their revenues from the sales of tobacco products.
Further expounding on the Foundation's investments in human vices, Piller wrote:
The Gates Foundation has at least $224 million invested in companies dedicated to gambling, such as the Las Vegas Sands Corp., MGM Mirage Inc. and Penn National Gaming Inc.; or dedicated to alcoholic beverages, including the Tsingtao Brewery Co.in China, Kirin Brewery Co.in Japan, and the United Kingdom's Diageo, maker of Smirnoff vodka, Guinness beer and Johnnie Walker whiskey.
Not that these are necessarily unwise investments for the Bill and Melinda Gates Foundation. They just may not be consistent with the Foundation's overall philosophy.
Piller's story opens with an elderly couple's tale of woe that ended in the loss of their nestegg home as a result of a lender's alleged unscrupulous acts -- a lender that the Foundation invests in. At the same time, the Foundation donates money to "Solid Ground, a Seattle nonprofit that counsels victims of predatory lenders." Ironically, the wife of the couple works for Solid Gound. The story goes on to cite how the Foundation has investments in:
- Mortgage companies that were accused in lawsuits or by government officials of making it easier for thousands of people to lose their homes.
- A healthcare firm that has agreed to pay more than $1.5 billion to settle lawsuits accusing it of medical lapses and fraud going back a decade.
- Chocolate companies said by the U.S. government to be profiting from the slave labor of children.
In fairness to the Foundation, there's a difference between accusations/settlements and actual indictments. On the other hand, if what Piller is reporting is true (and we have no reason to believe it isn't), then it does appear as though it's time for the Foundation to reroute some of its resources to better screening processes. In addition to identifying several organizations that the Gates Foundation could outsource such screening to, Piller also uses the Ford Foundation as an example of how large charitable organizations can also use their giving power to improve how socially responsible the beneficiaries are. Wrote Piller:
That $66 billion will give the Gates Foundation more than 10% of the assets of all of the charitable foundations in the United States and provide it with unmatched muscle and potential moral authority. Though it does a vast amount of good with its grants, the foundation declines to use its influence in efforts to reform companies whose business practices flout its goals.