Monday, July 21, 2008

Tom Kivisto Resigns From BOk Board

Until last Friday, Tom Kivisto was the CEO of Semgroup Energy Partners, LP. Apparently, until last Wednesday, Kivisto was on the Board of Directors of Bank of Oklahoma. He now is out at both entities.

It was July 10th that Mayor Kathy Taylor sent her company's Learjet 31a [Mayor Force One] to pick up Tulsa City Councilor David Patrick in Colorado. Patrick was fetched because Taylor needed insurance votes to get the Business Improvement District past the City Council that would supply the public financing component of the new downtown ballpark for the Tulsa Drillers. Taylor was in one heck of a hurry, if she was willing to pop for $4,500 in jet fuel to get Patrick Back. BOk must've shared that imperative, if they were willing to send a very senior manager on the flight to bring Patrick back to the council and ready to vote "the right way."

It was Tom Kivisto that took Kathy Taylor's spot on the BOk Board when she resigned to run for Mayor of Tulsa. It was Pete Boylan, another BOk board member and Stan Lybarger, the BOk President that served as Taylor's chief salespeople on the new ballpark for the Tulsa Drillers.

In fact, 8 out of the 11 "Ballpark Players" as cited in a July 13th Tulsa World story by PJ Lassek had or have direct ties to BOk. They are Taylor, Lybarger, Boylan, attorney Fred Dorwart, attorney Margaret Kobos, Stacy Kymes [who fetched Patrick with Taylor's jet], Eric Kessler and Kivisto. Only City Councilor Eric Gomez, John-Kelly Warren of "The Channels" fame and Jim Adelson didn't have any "direct links" to BOk.

But Adelson and his wife Ellen serve on the University of Tulsa Board of Trustees along with five members of the BOk Board. Those five are Sharon J. Bell, Chet Cadieux, Joseph W. Craft, III, Kivisto and Steven J. Malcolm.

Also on the TU Trustees with those five BOk Board members are Robert and Roxanna Lorton of World Publishing and Bill Lobeck, Mayor Taylor's husband and the other owner of that jet that fetched David Patrick. Another TU Trustee is Steve Turnbo, CEO of Schnake, Turnbo and Frank Public Relations.

Remember that World Publishing was the largest preferred stock holder and Turnbo was the largest common stock holder in the failed Great Plains Airlines. Remember also that it was Taylor and her City Attorney, Deidre Dexter [who used to work for Dorwart] that negotiated the Great Plains settlement.

During the July 10th City Council meeting, Taylor, Boylan and Lybarger repeatedly touted the fact that half of the ballpark's $60 million price tag would be supplied by private sources of funding. The Tulsa World reported in their Saturday edition that "Kivisto and SemGroup had discussed but not committed to a $7.5 million contribution and naming rights for the stadium, said Mayor Kathy Taylor."

Was this $7.5 million part of the $30 million sold to the Council? Kivisto left BOk effective July 16, just six days after the July 10 vote. Did Mayor Taylor or any of the BOk Board members selling the Business Improvement District and the ballpark and the need to rush a vote KNOW that all was not well at SemGroup and the money wouldn't be there? Pulling Kivisto's $7.5 million would have made the private contribution $22.5 million, which is less than the public contribution of $25 million.

According to Reuters:

Thomas Kivisto, who helped found SemGroup, had been on the board of directors of
BOK since 2006. Kivisto stepped down from the top job at SemGroup last week
after a cash crunch stemming from its oil hedging program forced it to consider
a bankruptcy filing.

BOK engaged in regular hedging transactions with
SemGroup, which trades over 500,000 barrels per day of crude oil. As of Dec. 31,
2007 SemGroup had hedged 21 million barrels of oil and some natural gas with
BOK, the bank said in its proxy filing with the Securities and Exchange

As of Dec. 31, 2007, the short value of these hedges with
SemGroup was $130 million, BOK said in its proxy filing.

BOk, Taylor, Boylan, Kivisto, Kaiser, Lybarger and a slew of other players were all very closely linked with four major stories of the past three weeks; the Great Plains settlement, the Drillers Ballpark, Taylor's use of "Mayor Force One" to fly her city council around the country and the financial troubles at SemGroup.

Coincidence? Get a life!


Anonymous said...

Chris, this former SemGroup employee was not surprised by the news this past week. Check out his blog posted on June 6.

Anonymous SemGroup Employee

Anonymous said...

This former SemGroup employee isn't surprised either. Current employees are already referring to the place as SemRon, like Enron.

Someone knew there was trouble almost a year ago. The SemGroup companies performed a stealth lay-off in November of 2007. They let go a number of people wihtout any cause and made every effort to make those let go feel like it was their own fault and not a lay-off.

I've seen a number of blogs and commentaries stating that people hope that the Kivistos are 'Okay' because they've done so much for the city. BS. They are bazillionaires already. Who cares how Tom 'helped' and how the SemGroup management 'went the extra mile' for the employees when the bottom line is they weren't looking out for the employees in the way that mattered most - building a stable sustainable business.

Did management 'know'? ABSOLUTELY.

Anonymous said...

Anonymous SemGroup Employee,

Could you be more specific as to what you experienced and saw there?

Curious SemGroup Vendor

Anonymous said...



Results of Operations and Financial Condition, Creation of a Direct Fina

ITEM 2.02. Results of Operations and Financial Condition
On July 22, 2008, subsequent to BOK Financial's earnings announcement for the second quarter of 2008, SemGroup L.P. and 24 related entities filed for bankruptcy protection. BOK Financial had credit exposure to SemGroup, L.P. through loans and derivative contracts of approximately $147 million as of June 30, 2008. As disclosed in previous filings with the Securities and Exchange Commission, the principal owner of SemGroup resigned from the Board of Directors of BOK Financial on July 16, 2008.

BOK Financial currently expects to recognize pre-tax charges of $71 million related to SemGroup for the second quarter of 2008 in addition to $16 million pre-tax charges recognized in the initial earnings release on July 15, 2008. The total pre-tax charges are based on an assessment of a range of values using information currently available, including information provided by a nationally recognized financial advisor to SemGroup. The range considers both the value of SemGroup as a going concern and its liquidation value. Our current estimate is based on the lower end of the range of values. BOK Financial's strong capital position will enable the company to absorb these pre-tax charges without impeding our operations and growth.

ITEM 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
On July 21, 2008, BOK Financial Corporation entered into a $188 million, unsecured revolving credit agreement with George B. Kaiser, its Chairman and principal shareholder. Interest on the outstanding balance is based on one-month LIBOR plus 125 basis points and payable quarterly. Additional interest on the unused commitment amount is based on 25 basis points and payable quarterly. This agreement has no restrictive covenants, which provides greater flexibility to fund the needs of BOK Financial and its subsidiaries. This agreement expires on December 2, 2010.

The credit agreement with Mr. Kaiser replaces a credit facility entered into on December 2, 2005 with a group of commercial banks which was terminated at the request of BOK Financial on July 21, 2008.

Anonymous said...

I can sum up what I saw at SemGroup with a single word. EXCESS. Many of the people I knew who worked there had the mindset of “this seems too good to be true, so it probably can’t last.’ I was among them. There were no suggested spending limits for the use of corporate credit cards for food and entertainment. The cards of course had overall spending limits such as so many dollars per day ($2,000 or higher) for retail purchases and a total spending limit (perhaps $10,000) or higher. In my first months at the company I was a witness to many evenings spent in bars with the company picking up the tab.

The building at 65th and Yale is absolutely amazing. The labs are state of the art and formed with large sections of thick glass walls so that the work in the lab can be seen by people on tours of the facility without having to go into the work space. There are break areas on every floor with granite countertops, Kraft Made cabinetry, stainless appliances, the drawers were stocked with all manner of free snacks, the fridge in the main break area had free drinks and the coffee machine was a single cup at a time Flavia machine.

The third floor of the building is made partially of a very swanky fitness center that is staffed with trainers. The cost for employees was free and the cost for each family member to use the facility was $20 one time (not monthly or even yearly, once!). The fitness facility had marble topped counters in the locker room, solid wood country club style lockers, free Aveda personal care products, free towel service and a very expensive body fat measurement tool called a Bod Pod.

There are a number of pieces of original art through the Warren Place headquarters and also in the South Campus building. These items may have been purchased in an effort to help Kivisto’s daughter’s Chicago art gallery. Interesting, no?

After the stealth lay off, I heard that the free snacks and drinks dwindled until finally they were discontinued. Management started advising their employees not to spend so much on company credit cards. I laugh now because the kind of steps they were taking to save money were like trying to stop the tide from coming in with your two hands. Not to mention that most of the controls they put in place too late were the kind of controls that should have been in place to start with.

Anonymous said...

Former, Elleron Oil Company Employee
In which Mr. Foxx owned, operated in 1991, state's in his biography that he sold it to Plains is not right!
He didn't have choice then either.
He still owe's me a week's pay and a week's vacation.
I feel sorry for the Semgroup employees.
They need to ban Foxx from running anything but, a lemonade stand.

Anonymous said...

Interesting that nobody has picked up on the fact that the bank that helped force SemGroup into bankruptcy (Bank of America) used to be represented by the same guy that now leads SemGroup--Terry Ronan.

Anonymous said...

I am a law student at the University of Tulsa. I am writing a paper for the Energy Law Journal about the SemGroup case, focusing on the class action in the SD of NY as well as any local lawsuits that may be in the works.

I am interested in two things right now:
1) Is there a current or former SemGroup employee that would like to speak with me?
2) Is there anyone who knows if BOK is filing a lawsuit? I have tried to contact BOK's legal team, but they are playing their hand close to their chest.

If there is anyone who would like to speak with me, my contact email is .

thanks in advance.