Oracle Corp. co-founder Larry Ellison has begun settling a lawsuit with a hefty donation to his nonprofit medical foundation, but the flamboyant billionaire is hardly rushing to remit his $115 million pledge to Harvard University.
In an unusual settlement to an insider-trading lawsuit, Ellison has made the first payment of a $100 million donation to the Ellison Medical Foundation, said lawyers representing aggrieved shareholders who sued Ellison two years ago.
Ellison's initial $5 million payment of the total donation earlier this month is the result of a legal settlement of a civil complaint that revolves around a $900 million gain he generated by selling some of his Oracle stock shortly before the company's shares plummeted in 2001.
But the Silicon Valley tycoon's court-mandated largesse comes at a time when Harvard University officials are cutting staff of the planned Ellison Institute for World Health over fears Ellison is reneging on a $115 million gift he pledged the school.
Ellison's promise to Harvard last year created a sensation throughout the philanthropic community because it would have been the school's largest single contribution. The Ivy League school has the largest educational endowment at $25.5 billion.
The Harvard pledge propelled Ellison to seventh place on the Chronicle of Philanthropy's largest donors in 2005.
"To date there hasn't been a signed gift agreement," said Harvard spokeswoman Sarah Friedell, who declined further comment Monday. Dr. Christopher Murray, the Harvard researcher who was to head Harvard's planned Ellison Institute for World Health, declined comment.
The Financial Times reported Wednesday that Harvard has laid off three top officials it hired for the Ellison Institute and delayed plans to hire 130 people by next year because it hasn't received any money. Ellison stopped communicating with Harvard officials in November, the newspaper reported.
Oracle spokeswoman Deborah Hellinger declined to comment on the Harvard issue. Richard Sprott, the director of the Ellison Medical Foundation, also declined to comment because he said the organization was not involved with the Harvard negotiations.
Ellison, 61, co-founded Redwood Shores, California-based Oracle in 1977 and helped build the company into a business software giant.
Ellison ranks as the 15th-richest person in the U.S., based on Forbes magazine's annual wealth survey, with an estimated net worth of $16 billion — $2.4 billion less than the magazine's survey the previous year. Much of his giving has come through the Ellison Medical Foundation, a nonprofit corporation that has funded research on aging and global infectious diseases.
The new funding for the Ellison Medical Foundation, which he launched, comes amid a suddenly energized philanthropic movement led by the world's two richest men, Bill Gates and Warren Buffett. On Sunday, Buffett announced he would leave most of his roughly $44 billion (euro35 billion) to the Bill and Melinda Gates Foundation, which came on the heels of Gates' own bombshell that he would give up day-to-day oversight of Microsoft Corp. in 2008 to concentrate on philanthropy full time.
Like many other high-tech companies, Oracle's sales sagged badly in 2001 amid the aftershocks of the dot-com implosion that wiped out hundreds of companies. Oracle's shares plunged by 52 percent in 2001, erasing about $85 billion in shareholder wealth.
Ellison denied any wrongdoing in the lawsuit, but agreed to donate $100 million to charity in Oracle's name and pay $22 million to 13 law firms who represented Oracle shareholders in the San Mateo County Superior Court lawsuit. A special committee appointed by Oracle's board to investigate the allegations raised in the lawsuit also concluded Ellison did nothing wrong.