A food fight broke out in the Ole Miss Alumni Association after several members questioned the investing of Association funds. The leadership claimed it investigated the claims, found nothing there, and told the main crusader to leave them alone. Kosciusko attorney Bubba Petit issued the following statement:
A group of donors to the Ole Miss Foundation has leveled accusations of corruption at the Foundation stemming from an analysis of a $20 million timber investment made in 2008. The poor performance was discovered by a donor who has been donating money through timber sales for over 25 years. His conclusion has been confirmed by numerous timberland owners, foresters, lawyers, trustees of public and private trusts, and investment advisors: Something stinks and the odor needs to be eliminated.
The investment is one of many “private equity” investments held by the Foundation. These investments are not regulated by the Securities and Exchange Commission and have been criticized for years by Warren Buffet because of their risky nature, poor performance, lack of inherent systems of checks and balances, and for being such fertile fields for fraud and corruption.
The Foundation acquired approximately 11% of a large tract of timberland in which an Ole Miss alum’s company is the General Partner or management company. One of the Foundation’s investment committee members was a salesman for the general partner. A typical commission for the sale of such an investment is often as high as 5% or $1 million, but the Foundation claims that it does not know how much or to whom a commission was paid. This same salesman is a 10% owner in the timber management company (the general partner). Another investment committee member’s son was also a part owner in the management company but his percentage of ownership is unknown. He has left the company since the donors’ investigation began.
The timber investment lasts for 14 years. Every investment comes up for review at least annually. Every year since 2008 these same two Foundation directors have served on the investment committee and shared the responsibility for assessing and reporting on this investment to the full board. Neither director ever offered to remove himself from the Board or the investment committee. One of the members even donated $50,000 for the establishment of a scholarship fund in honor of one of his fellow board members and investment committee members who has continued to not raise the issue of the replacement of the two board members with the conflict.
The disgruntled group of donors allege that the management fees are an unconscionable 8 to 10 times too high for this investment and cite personal examples as well as the costs of management of other foundations, pension funds and timberland owners throughout Mississippi and the south. They allege and give a detailed analysis showing that the fees the Foundation is paying are about $32 per acre annually. Explained another way, the Foundation is paying around half of the annual timber income to the timber manager while the going rate for competent timberland owners is around 6%. The Foundation does not dispute these figures. The management fees for 2017, a fairly typical year, in the the 83,000 acre tract in which the Foundation owns 11% were $2,664,728. This excludes operating expenses of $850,757 ( planting, taxes, etc.). By contrast, one of the foresters who is advising the donors manages around 55,000 acres with no assistant or technician. He also does independent appraisal work on the side.
The donor group contends that if the Foundation makes anything at all on this incestuous investment it will be less than the inflation rate for the 14 year period. However, not everyone will go hungry. In addition to the huge commission one of the investment committee members is believed to have received, this same member and the son of the other member will receive their part of the management group’s income of at least $30 million from the total investment. The Foundation’s portion is 11% of that amount.
The Aloomni Grand Poobah's had enough of Mr. Pettit's crusade and told him in somewhat professional terms to um, get lost.
48 comments:
Tally Ho!
Follow the money-
Guess he found a “media outlet” that would publish his allegations.
Oops....sounds like somebody is not gonna be hanging a chandelier in the grove anymore.
The comments are going to write themselves on this one.
Proceed with literary freedom and aplomb.
Check mark another reason the alumni mailers and email/phone requests get flushed. You already took my money while I attended.
I'll continue contributions to The Human Fund...."money for people".
@10:46 AM -- there's gonna be hell to pay when they dig into the investment in Vandelay Industries, amirite?
Hotty toddy, another scam surfaces. "Timber sales," why does that sound familiar? Ha!
Attorney for the foundation earns bonus points by deciding to go familiar in his salutation: "Dear Bubba:"
If Bubba ends up being correct this letter will live in in infamy on Bubba's office wall, just like a roadkill possum.
Do the timber cruisers have MBAs and wear Top Siders and Izod when cruising the investment's groves?
(Asking for a friend!)
If there is ONE Ole Miss Alumnus who is NOT out to screw his fellow man, Please let him come forward at this time.
I have owned timber (pines) for 30 years. If you have received a return of 4% a year over that time period you were lucky. The few mills that are left don't want to pay you much for any of it. CRP plantations were oversold as giving you a great return in the future. It might have been ok had 2 million acres not been planted in MS. all at once.
Where’s Lamar Adams in this?
https://www.djournal.com/mbj/the-wood-gap-lumber-prices-set-all-time-high-while-trees-are-stuck-in-the/article_03c6b7ac-29ca-11eb-811e-3780b98fe411.html
This is somewhat on the subject, and an interesting read about lumber and timber prices in Mississippi.
It seems as if this sh*t doesn’t happen at Southern and Ms. State. It appears non stop at Ole Miss. No wonder we are losing new students right and left. Is there any chance we can find a decent chancellor. Here is a novel idea. Do away with the chancellor (whatever that is?) and get a president like all of the other 2 and 4 year schools.
12:16, you show your lack of knowledge, which is not surprising since you are bashing Ole Miss and fashion at the same time. The little alligator on a shirt was basically the uniform of preppy rich kids in the 60s and 70s, so unless you are in a nursing home, this is not what Ole Miss students wore when you were in school. In the 80s, Izod flooded the market with cheap crap and the alligator became an emblem of poorly-made department store trash and quickly faded into oblivion. The shirt's original designer Lacoste (not Mississippi State's Lacoste so don't even go there) split with Izod around 2000 and now the Lacoste alligator has regained its status as a high-end pretty attire, but it is no longer called Izod, its Lacoste.
Sooo, your post simply tells me you probably went to State in the 90s when they were just catching on to the alligator craze while the rest of the world had moved on and quit thinking it was cool. Typical fashion cycle for our MSU cousins. In recent years, Izod makes mostly urban fashion that you would buy at Belk.
There's plenty to slam Ole Miss about, but please raise your game a bit if you want to play.
"The management fees for 2017, a fairly typical year, in the the 83,000 acre tract in which the Foundation owns 11% were $2,664,728."
Where is this "timber investment" located. I spend a lot of time looking at land and wooded properties and I can't put my finger on a single tract in Mississippi that is owned by the same entity that is 83,000 acres, much less 83,000 in multiple tracts owned by the same entity. The closest single entity tract(s) of land I can think of is not close to 83,000 and it's owned by an oil & gas guy would doesn't give two chits about Ole Miss or other people investing in it. This smells to high heavens.
Dick Molpus the old democrat Sec of State?
2:41 thanks for giving us a history lesson on Ole Miss and its fashion history. We are proud the Rebs stay on the cuspid of fashion. That is a lot to be proud of. Maybe the significant drop in enrollment has something to do with the extra expense of keeping up with the fraternity next door but it apparently has to be done. I know you are proud!!!!!!
Timber investment from people outside the Timber industry is rife with fraud. It is something the skinned ones can't. put their finger on.
Ole Miss graduates all look so wealthy but I have more trouble getting money out of them, the ones I have tried to do business with do not have the money to pay enough to get our services. They look prosperous though.
" 2:41 thanks for giving us a history lesson on Ole Miss fashion, (to paraphrase).
Well . . . 2:41 was accurate.
The alligator (actually a crocodile) fell out of fashion overnight.
Not only at Ole Miss, but all over the country's IHL's.
(Mississippi State College excluded).
Also . . . the students at that little school in Hattiesburg were too stoned to notice fashion trends.
Tee shirts, shorts, flip flops and a three chambered bong were all that was required on Hardy Street.
But I digress.
I really wish the Ole Miss Alumni would have a "blow up" about what that school has become.
2:41 - bash all you want but you just exhibited your OM education and ability to compute.
I wore Izods in the 60's and 70's and I am far from being in a nursing home. In fact, my age starts with a 6 and while I do know a couple of people (with debilitating diseases) at that point, most do not enter said facilities until the first digit in their age is either an 8 or a 9.
So while you might be all up to date on fashion - as any good OM grad would of course be required to be - your other skills are missing (which is also true for many of your fellow alums.)
And while being taken to the woodshed (a hidden comment for the political junkies on the site) next time you come on to tell us all your wonderful fashion knowledge, hold back and try to stick to the subject at hand. You failed at trying to shame someone else's comment.
3:51 - who first said the tract was in Mississippi. Since the foundation outed the Molpus Companies in their letter, you need to check their timber investments; last time I looked you could have added a couple of zeros to the acres they have under management or have sold or held investment in.
All you “straight” fashionistas shut the hell up.
(Polo was the rage queens)
So back to the topic - it’s rather opaquely written.
Who are the guys who are fleecing ole miss on their “investments?”
Names?
2.6 mm is quite the haul annually for watching a product which is not highly valued at the moment.
83,000 acres is quite a swath....I watch after 1,000 acres and it’s not that hard.
Where is Lamar when you need her?
The Izod comment was clearly directed at an MSU guy who made the Izod comment originally. Don't let the truth butt hurt you. If you think Izod is a badge of affluence, you are either 70 years old, or a state fan. Not even a grad, a fan.
Sorry, if it can’t be said in 3 paragraphs or less, I loose interest.
It's amusing that a news item about a controversial timber deal has turned into a debate about 40 plus year old fashions.
But I guess I understand the passion.
From what I've witnessed in Starkville, Mississippi . . . overalls are still the primary fashion statement.
" Sorry, if it can’t be said in 3 paragraphs or less, I loose interest."
So the question is . . . why did you even post a comment if your not interested ?
@4:56 As an Ole Miss grad from a long time ago, I must agree with you - and being the betting man I am, I would wager that most of the people you are talking about live, not in Jackson itself, but in the "metro Jackson" area. Just check the "past due lists" of the various fraternities and sororities at "Your University".
Lawd, I am glad I got in and out of timber, before they figured it out.
7:38. "Lose" JPS, not "loose". Lord!
This may wind up as an episode of American Greed.
What kind of fucking loser keeps with the history of Lacoste clothing and the current relationship with Izod. Belk sales both brands. Freakin weirdo
Meanwhile, I'm working toward my goal in life: To have a truck tag emblazoned with a little red image of the Lyceum Building. Say what you will about fashion statements - THAT, my friends, is a financial statement!
For the win...
I notice Ole Miss uses a non ole Miss law educated attorney living out of state to handle their problems. Hypocratcy
ole miss alumni . the epitome of the eternal sophomores who just can seem to leave college behind. they have to relive it everyday of this lives.
god must love those types cause he makes so many of them.
they are easy to spot. fat, middle-aged , patagonia fishing shirts, costa sunglasses and $90,000 pickup trucks with the yeti cooler in the bed filled with the drink of choice,micholob ultra....hey, only 2 carbs per can.......and running their mouths at 300 words per minute telling them selves how important they are.
oh, and don't forget all of their expensive hunting clubs that they brag about belonging to.
for all you wives and girlfriends out there, you need to realize that" hunting clubs" are where your stud muffin goes to get away from you and get drunk, high and chase around every stripper and road ho they can rustle up.
Anybody got a list of the OM Foundation Investment Committee, and/or the Foundation Board?
Obviously we know from the lawyer's reply probably who one of the accused may be, but inquiring minds who are not so much into fashion want to know. Or at least, they have a friend who wants to know. And Bubba got told to STFU so not sure if he will be telling.
@8:32, where did you go to college?
@8:17, Cal Mayo lives and practices law in Oxford.
Hypothetical scenario, just trying to learn the rules. Say I received monies from an entity that are "restricted" in their purpose for only approved uses. Let's also say that I do some consulting work that is an approved project, well within the scope of the restrictions. Now once I receive that money for my approved project, would I then be able to donate it BACK to the same entity with NO restrictions?
Asking for a friend.
10:41 I think they tried that at the Meeks school of journalism. That did not work out very well.
Bunch of white folks with too much money is what this is all about.
Someone who probably works for or did work for a clothing store.
A Clue If I May...
RAGS to riches and tattling bitches,
Of Hotty Toddy and NOooo-BODY!
It seems like it could be a target rich environment.
Schedule D has some interesting numbers.
@2:41 Well, trying to appear smart and erudite seldom works. It's a crocodile not a "little alligator". If you really want to peg the um look, bleach your hair and get plastic tits. Uniform of the day.
I don't know anything about timber, but I did go to college in the late '70's and early 80's (not at State or UM) and remember the "preppy look." Younger folks have to remember the preppy look came after the grubby hippie look and the disco polyester era. Every college had it, but Ole Miss in particular embraced the prep look and was known across the south for that. As evidence, I recall one of our football cheers when we played UM that we can't do anymore because the kids today wouldn't understand it (clears throat):
Izod, Izod
Alligator piss!
If shit was a college
They'd call it Ole Miss!
Wish I could take credit for writing it - sure used it a lot back in the day!
Allegations are just that... until investigated, substantiated, or disproved. At a minimum there's likely gross negligence, disregard for ethical standards, and/or conflict of interest involving self dealing on both sides of this transaction. Even worse probably collusion, intent to commit fraud, misuse of private funds meant to benefit public interest. True SEC jurisdiction doesn't cover limited partnerships but MS Secretary of State does and should investigate these allocations. If not true, then there's still the issue that croneyism has riddled the Foundation for years and needs to be exposed and perpetrators held accountable...Regardless, then the Investment committee needs to take a long hard look at its investment policy that allows this to event be "a thing" and ask themselves why they largely missed out on one of the greatest securities markets for stocks, bonds, and real estate in the history of mankind with these funds. Molpus'timber management company surely didn't, nor the slick broker who sold the Foundation shares of an illiquid timer limited partnership. I'm sure they took most of their money from these deals and and put it in the stock market. If Pettit is blowing smoke, then come clean and invite the Secretary of State and his office up for an investigation party after he gets his vaccine, clear the Air! Then get on with cleaning up your investment committee and investment strategy and follow the investment principles of other big league institutions of higher learning, successfully managing their endowments. Otherwise you'll remain stuck in the Bush League. Come Clean Now!
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