Billionaire booster T. Boone Pickens and the fundraising arm of Oklahoma State’s athletic department are suing a life insurance company over a program aimed at bringing in millions of dollars, the university announced.
Oklahoma State said it hoped to recover some of the $33.3 million in premiums it paid Lincoln National Life Insurance Co. through the “Gift of a Lifetime” program. The fundraising effort, announced in March 2007, involved the university taking out $10 million life insurance policies on 27 donors with OSU as the beneficiary.
The university claims the insurance company charged inflated premiums and fabricated information that led the school to believe the program would be a sound investment strategy.
Messages left with spokeswomen for Lincoln Financial Group weren’t immediately returned.
The lawsuit filed last week claims John Ridings Lee, the CEO of Dallas-based Management Compensation Group and an agent for Lincoln National Life, and others projected the insurance program could make $350 million over 20 to 25 years. Cowboy Athletics Inc., a fundraising foundation for OSU’s sports teams, now claims those estimates were “pure conjecture.”
Lee didn’t immediately return a call seeking comment late on Feb. 3.
According to the lawsuit, the university was told it would have to pay 15 annual premiums of more than $16 million to enforce the insurance policies for the lifetime of the insured donors. The school says it paid the first two premiums but Cowboy Athletics did not receive the actual terms of the policies until March 2009, when the third premium was due, and decided at that time to cancel the policies.
Pickens, a Texas oilman who has donated hundreds of millions of dollars to the university, was credited with presenting the idea for the program to the university. He also serves on the Cowboy Athletics board of directors.
The lawsuit says Pickens provided approximately $10 million to help Cowboy Athletics obtain and keep loans to pay the premiums.
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