“Don’t You Live In The Ghetto?” – Bill Gates Ignored Complaints About Top Money Manager’s Racist, Sexist Behavior

Since Bill and Melinda Gates first announced their divorce earlier this month, barely a day has passed without some unflattering new revelation, as the American media apparently scrambles to compensate for all those years where it treated Bill Gates with kid gloves.

It’s bad enough that Melinda reportedly divorced Bill over his insistence on maintaining ties with Jeffrey Epstein, something that has stoked speculation about whether Gates might face more sexual harassment allegations (sure enough, reports have emerged claiming he was essentially pushed out at Microsoft over improper behavior involving a female subordinate) or that he might be caught up in the Epstein drama.


While that so far hasn’t happened, the allegations of sexual improprieties have been enough to shatter his “dad geek” image. And now, the NYT has published a #MeToo-style report alleging that Gates’ main money man, Michael Larson, has a long history of sexual harassment and Scott Rudin-style abuses, and that Gates has repeatedly been warned about Larson’s antics, but neglected to act. Perhaps because Larson helped Gates grow his assets from $10 billion to $130 billion-plus through a strategy of low-profile investments, including buying up so much land that Cascade is believed to be the largest owner of farm land in the US.

Larson has managed Gates’ money since the early 90s; before that, he was a portfolio manager at Putnam Investments. Cascade was incorporated in 1995 in Washington State. The generic-sounding name allowed Larson to runa  vast investment operation with a relatively low public profile. The perception that Larson had Gates’ unwavering support allowed him to do essentially whatever he pleased. And his employees, most of whom were hired directly out of college, never felt empowered to speak up.

The list of allegations is pretty typical: Larson was accused of sexual harassment, racist remarks, acting extremely vindictive toward employees who left the company as well as his extremely blunt and degrading comments made in meetings, which his staffers described as “Larson bombs”. Overall, he was described as a “bully”.

But what’s more, Bill and even Melinda Gates had been made aware of Larson’s behavior as early as the mid-2000s.

But Mr. Larson, 61, also engaged in a pattern of workplace misconduct at Mr. Gates’s money-management firm, Cascade Investment, according to 10 former employees as well as others familiar with the firm.

He openly judged female employees on their attractiveness, showed colleagues nude photos of women on the internet and on several occasions made sexually inappropriate comments. He made a racist remark to a Black employee. He bullied others. When an employee said she was leaving Cascade, Mr. Larson retaliated by trying to hurt the stock price of the company she planned to join.

Cascade paid off at least seven people , including former employees, who witnessed or were the victim of Larson’s inappropriate behavior. The fact that Gates was so reluctant to reprimand Larson is “at odds with his image as a roving global do-gooder and champion of women’s empowerment,” the NYT said.

While spokespeople for Larson and Cascade denied the allegations, a representative for Melinda Gates offered a cryptic statement saying she was unaware of “most” of these allegations, but at any rate had zero power to do anything about it since she had zero control over Cascade.

Courtney Wade, a spokeswoman for Ms. French Gates, said, “Melinda unequivocally condemns disrespectful and inappropriate conduct in the workplace. She was unaware of most of these allegations given her lack of ownership of and control over B.M.G.I.”

One particular incident, where Larson made a joke about a black employee living in “a ghetto”, was even brought to the Gates’ attention back when it happened in 2005. The employee who was the subject of the joke was also targeted with other harassing behavior, including Larson allegedly shorting the stock of a company that made her a competing offer.

Ms. Ybarra, then 30, had joined Cascade three years earlier as an investor relations analyst. After she announced her planned departure, Mr. Larson became so angry that he shorted the stock of InfoSpace, according to three people familiar with the episode. (Short selling involves placing bearish bets on the company’s shares, which sometimes causes the stock to fall.) Two of the people said they saw Mr. Larson’s trades on their computer terminals.

Mr. Larson told Ms. Ybarra and others that he had shorted InfoSpace’s stock out of spite, according to the three people, who heard about his remarks at the time.

Mr. Giglio confirmed that Cascade shorted the stock but denied that Mr. Larson did it to spite Ms. Ybarra.

At the same time, Mr. Larson repeatedly pressured Ms. Ybarra to remain at Cascade. She ultimately agreed to stay.

On Election Day that November, Mr. Larson asked some Cascade employees in the office about the best time to go vote. Ms. Ybarra, who is Black, replied that she had voted that morning without having to wait in line. Mr. Larson responded: “But you live in the ghetto, and everybody knows that Black people don’t vote.” The scene was described by two people who heard the comment and a third who was told about it later.

Mr. Giglio denied that Mr. Larson made the remark.

At least one employee at Cascade complained to human resources about Mr. Larson’s remark. The complaint made its way to Mr. Gates and Ms. French Gates, who later spoke to Ms. Ybarra as part of an internal investigation, according to people familiar with the matter.

In January 2005, she quit Cascade, received a small payout and agreed to not speak about the firm in the future.

Another anecdote used in the report involves California fund manager Robert Sydow, who had been close friends with Larson until he tried to confront Larson about his behavior, at which point Larson retaliated by allegedly pulling money he had with Sydow’s firm.

In November 2006, Mr. Gates and Ms. French Gates were sent another complaint about Mr. Larson. This one was from Robert E. Sydow, a California fund manager who had been close friends with Mr. Larson and whose firm, Grandview Capital Management, Mr. Larson had hired to manage a $1.6 billion slice of the foundation’s endowment.

Mr. Sydow wrote a six-page letter to the Gateses accusing Mr. Larson of abruptly severing Cascade’s ties with Grandview after a dispute between him and Mr. Sydow. (The dispute, Mr. Sydow wrote, came after Mr. Sydow warned Mr. Larson that he needed “to stop using his power to hurt others in anger.”) The letter, reviewed by The Times, said Mr. Larson had harmed Grandview’s reputation in part by spreading “false and defamatory” lies about it in the market.

Mr. Sydow, the godfather to one of Mr. Larson’s children, went on to describe multiple instances of Mr. Larson seeking to punish employees who left Cascade and retaliating against those who cooperated with the investigation into his treatment of Ms. Ybarra, among other things.

Mr. Larson has “the potential to greatly embarrass both you and the foundation,” Mr. Sydow wrote.

“We exit agreements with third-party investment managers for a variety of reasons,” Mr. Larson said in a statement sent by Mr. Giglio.

The sexual harassment allegations involving employees chiefly revolve around two incidents:

  • At a work Christmas party in the mid-2000s, Mr. Larson was seated outdoors with a small group of male employees after dinner, according to one of the men. Three female colleagues were standing about 20 feet away. “Which one of them do you wanna” have sex with? Mr. Larson asked the men, using a profane verb.
  • On at least one occasion in recent years, with employees looking on, Mr. Larson displayed photographs of naked women on his phone and compared them to Ms. Berman, the human resources executive, according to a former employee who witnessed the incident and another person who was told about it. (Ms. Berman left Cascade in 2015.) Another woman who worked at Cascade said Mr. Larson asked her if she would strip for a certain amount of money.

Larson apologized for using “harsh language”, but said he only did so early in his career.

But by far the most egregious allegations involved Larson’s alleged harassment of a bike shop manager, who eventually received a monetary settlement after she hired a lawyer who sent a letter to the Gates’s attorneys warning them about Larson’s behavior.

Around the time of the complaints involving Ms. Harrington, Mr. Larson was repeatedly propositioning, and being rebuffed by, the manager of a local bicycle store that was mostly owned by a firm, Rally Capital, that Cascade had invested in.

In 2017, the manager hired a lawyer, who sent a letter to Mr. Gates and Ms. French Gates warning them that if Mr. Larson did not stop harassing her, she would sue them. The letter said Mr. Larson had exposed himself to the manager and had told her that he wanted to have sex with her and another woman, according to someone who read the letter.

Mr. Gates agreed to settle the matter by having a payment made to the bike store manager. Ms. French Gates insisted that an outside investigator review the incident and Cascade’s culture, people familiar with the matter previously told The Times. In 2018, Mr. Larson went on paid leave while the investigation took place.

When Larson left Cascade on a temporary leave in 2018, Gates confided in another senior employee that Larson likely wouldn’t return. However, he did return the following year, after an investigation into the bike shop manager’s allegations found that they could not be substantiated.

Rumors about Larson’s behavior have percolated for years, but now that the NYT has targeted him with a #MeToo-style expose, it’s likely his days atop Cascade are numbered. The last money manager fired by Gates was Andrew Evans, who served a six-month prison sentence for bank fraud (Gates even visited him in jail). When WSJ published a front-page story about Evans’ criminal record in 1993, Gates was forced to seek out somebody else to manage his personal fortune. That’s when he met Larson.

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