Prescott managed $132 million of the foundation’s assets in 2011, according to its tax return for that year, when Frohlich collected $1.5 million in fees. He was a director of the foundation during that time.

Legal Independence

“Mr. Frohlich does not manage any funds for Mr. Kaiser and has no relationship with Mr. Kaiser, Mr. Lakin, or Mr. Dorwart, though Mr. Dorwart’s law firm provides immaterial legal services to Mr. Frohlich’s funds on occasion,” Dorwart said in an e- mail, responding to questions sent to Frohlich.

Dorwart said in a phone interview that the foundation’s board and charity meet the legal test of independence required by the IRS. Members of the Tulsa Community Foundation board include four executives of Kaiser’s BOK Financial, Dorwart and one of his lawyers, and an employee of Frohlich’s.

Management of the Kaiser charity’s assets involves a range of investments and strategies. It takes positions in derivatives -- more than $180 million worth at the end of 2011 –- sells stocks short and invests in diversified funds, including one focused on Australian beef farming and another on disaster- linked insurance products, according to IRS filings.

‘Reasonable Percentage’

During the past decade, the charity has spent more than $152 million on non-charitable expenses, including investment fees. Its last year of net unrealized gains was in 2009, when it earned $453 million. The foundation reported an unrealized losses of $721 million for 2010 and $424 million for 2011, much of that related to Solyndra, Dorwart said.

“If the suggestion is that, as a foundation, we ought not to allocate some reasonable percentage of investments to propositions that we think have a particularly high upside and thus attempt to achieve a return in excess of average, then I reject that notion,” Dorwart said by phone.

The charity also allocates assets to entities the billionaire profits from. The charity holds more than $500 million in Memjet IP Holdings Ltd., a San Diego, California- based printing technology company that Kaiser has a personal stake in; $300 million in stock of Kaiser’s majority-owned BOK Financial; and $577 million invested through Kaiser’s Sausalito, California-based venture capital company, Argonaut Ventures LLC, according to the 2011 tax return.

‘Alongside Investment’