Tulsa World: SemGroup's shadow

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SemGroup's shadow
The bankruptcy of the philanthropic corporate citizen leaves a void for local nonprofits

By ROD WALTON World Staff Writer
Published: 7/12/2009 2:22 AM
Last Modified: 7/12/2009 8:36 AM

Complete coverage: Read all the stories and documents related to the SemGroup collapse.

Related story: SemGroup spiral.

Twelve months since SemGroup LP began its slide into Chapter 11 bankruptcy, the long-term impact of the company's collapse may be visualized best by what won't be seen around Tulsa in the near future.

When the Tulsa Drillers open their new downtown baseball stadium next spring, for instance, it won't be called SemGroup Field. The naming rights once under negotiation went away with the company's solvency.

The LPGA women's golf tournament, known last year as the nationally televised SemGroup Championship, doesn't even exist anymore.

And dozens of nonprofits are having to replace or write off millions of dollars in lost pledges by the financially strapped energy company and Tom Kivisto, its once generous and now embattled former CEO. Those agencies were hit twice by bad business news within months of each other.

"We lost SemGroup in July and the rest of the economy in September," Tulsa Community Foundation Executive Director Phil Lakin Jr. recalled recently. His organization was one of several that stepped

in to help meet community pledges left voided by SemGroup's losses last year.

SemGroup still lives and works as a weaker, smaller version of its once proud self nearly one year after its July 22, 2008, filing for bankruptcy protection in Wilmington, Del., federal court. The holding company since has sold off its SemMaterials asphalt assets and is trying to do the same for much of the SemFuels refined products business.

Hundreds of SemGroup employees who thought they held secure, high-paying jobs in a supportive, progressive workplace also learned the hard way that nothing good lasts forever. Those layoffs forced them into an already tight job market and perhaps caused some to look for help from social service agencies.

"It's a good thing in Tulsa that we have a lot of foundations focused on serving the disadvantaged," Lakin added.

SemGroup, in only eight years in business, had grown into one of the biggest financial givers around. That's why the shock waves in the community were particularly strong on July 17, 2008, when the company announced bankruptcy was a possibility.

The Chapter 11 filing forced SemGroup out of the giving business and left about 33 programs or nonprofit groups without $800,000 of the company's pledged funding, according to reports.

And that's not counting the community goodwill generated by supporting sports and entertainment events. There's no guarantee that SemGroup would have secured naming rights to the baseball stadium — ONEOK Inc. stepped up, instead — but Kivisto was in the ballpark with a reported $7.5 million offer.

Not every sporting beneficiary was able to replace those broken pledges. The LaFortune Tennis Center did not receive $480,000 of a $600,000 promise by the Tom and Julie Kivisto Family Foundation, according to reports.

The loss of revenue "has delayed construction of the clubhouse for at least a year, maybe more, until we find another source of revenue," Tulsa County Parks Director Richard Bales said.

The parks director was grateful for the $120,000 that did come through from the Kivisto foundation. The downfall of SemGroup and Kivisto, however, has thrown numerous nonprofits into uncertainty about the future.

Few of those efforts are more personal to the Kivistos than Project Single Parent. The one-time power couple started that organization as a means to help single parents with "bridge money," or funds to meet short-term expenses, Kivisto attorney John Tucker said.

"They are maintaining that all of the commitments to single parents are being honored and still are taking donations," he said. "It's unclear what the future of the project will be."

Project Single Parent still has a Web site soliciting donations. Its administrator is Sharon Pens, who was Kivisto's personal assistant while at SemGroup and placed on leave at the same time he was, according to court records.

About $85,000 was distributed to single parents last year, Tucker noted. Payments to existing participants have continued through this year, but no new applicants have been approved since the bankruptcy.

Tom Kivisto's own financial future also may be uncertain, despite the millions he was paid at SemGroup. An examiner's investigation, which did not have indictment power, has accused of him of setting SemGroup's collapse into motion with what the report called tightly controlled, risky oil futures trading that lost at least $2.4 billion.

SemGroup has sued its former boss and wants money back from trading losses via Kivisto's personal companies. His fortune, estimated in some court records at more than $200 million, is still overwhelmed by the $362 million in alleged personal trading losses that SemGroup wants back, according to reports.

Kivisto's support for the Tulsa Ballet stayed strong last year, according to reports. A $12 million gift made prior to the SemGroup bankruptcy survived intact, and the ballet seems to be adequately filling any other gaps so far this year.

"I'm impressed with the Tulsa Ballet," Lakin said.

All in all, the SemGroup story should be nothing new for nonprofits, he pointed out. Individual and corporate donors come and go over time, whether it is physical mortality or financial malady, and agencies must always be ready to line up new sources of giving.

"We all have a lifespan," Lakin pointed out. "A vast majority of nonprofits in Tulsa treat SemGroup as another donor that's no longer here. Certainly it was an unexpected death, but it happened. We still have programs and we still have services."

And, technically, Tulsa still has SemGroup. The company is working toward a possible reorganization and right now cannot make official charitable contributions, officials said.

But SemGroup still offers programs through which employees can give of their time and money to causes. If and when the proposed reorganization is completed later this year, the once-proud company name could enjoy a renaissance in philanthropy.

"Who's to say that SemGroup couldn't come back and be the same kind of company?" Lakin asked.

Tulsa World Staff Writer Kevin Canfield contributed to this story.

Rod Walton 581-8457
rod.walton@tulsaworld.com By ROD WALTON World Staff Writer

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	Report Comment FS, Broken Arrow (7/12/2009 11:29:40 AM) About all I've heard about SemGroup is whatever they did that was illegal should be overlooked because they did good, too. I wonder how well that would work if I get traffic ticket?
	Report Comment missy,,,m, no thanks (7/12/2009 5:04:24 PM) Well they should be thankful for what they have done for them and look for other ways to support these org.If a group depends entirely upon one co.then I suppose it wont exist if somethin happens to that co.
	Report Comment Bud Green, No (7/12/2009 9:35:04 PM) Crazy, Top picture, in the pink, is Paula Creamer LPGA golfer.
	Report Comment Bud Green, No (7/12/2009 9:36:57 PM) Good point, FS. Benevolence is admirable and great but in this case it seems to be "dirty" money.
	Report Comment olddude, tulsa (7/12/2009 8:58:07 AM) kivisto should be in jail,and why isn't he,money he bought his way out.
	Report Comment Tulsa Nurse, Tulsa (7/12/2009 6:35:34 AM) SemGroup used to be a big sponsor for the MS150 bike ride, helping to raise money to find a cure for Multiple Sclerosis. They will be missed this year.
	Report Comment Nuff, (7/12/2009 10:29:11 AM) "But SemGroup still offers programs through which employees can give of their time and money to causes. If and when the proposed reorganization is completed later this year, the once-proud company name could enjoy a renaissance in philanthropy." Seriously! Do the employees get a kiss before this takes place?
	Report Comment JoTulsa, Broken Arrow (7/13/2009 3:55:10 PM) "But SemGroup still offers programs through which employees can give of their time and money to causes. If and when the proposed reorganization is completed later this year, the once-proud company name could enjoy a renaissance in philanthropy." The employees MIGHT do this after they are "made right" on the pay they lost out on. Yes, the employees were SemScrewed too. Maybe the employees

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