An oil-company founder places a bet on Denver's needy students
Mr. Marquez (pronounced "Markus") attributes his business success to "calculated gambles" — and he's now using that philosophy in his philanthropy. Last November, he and his wife, Bernadette, both 48 years old, pledged 2.5 million shares of Venoco stock (currently worth more than $40-million) to the Denver Foundation to start the Denver Scholarship Foundation, which promises to provide full tuition college scholarships to low- and lower-middle-income students who graduate from Denver public schools.
He also has put an equal number of shares in the Marquez Foundation, and the newly established family foundation is expected to support a variety of charities, although it has yet to make its first grant.
If the scholarship fund is as successful at creating a college-going culture in Denver as Mr. Marquez and education leaders here hope it will be, the fund will eventually spend $20-million per year. The foundation will need an endowment of $200-million to $400-million to support the grants.
Beating the Odds
No one questions the importance of the foundation. In a country with dozens of troubled inner-city school districts, the Denver school system has received more than its share of attention recently, thanks to the failure and closing in 2006 of Manual High School, in one of city's poorest neighborhoods. More than two-thirds of students in the system receive a subsidized lunch. And only 9 percent of students who start high school in the district go on to earn a diploma from a four-year college.
But tough questions remain. Can Denver get its students prepared well enough to take advantage of the scholarships? And if so, can the scholarship fund raise enough money from other donors to pay for the students to go?
Janet Gullickson, executive director of the fledgling scholarship foundation, which shares office space with Venoco on the 32nd floor of a Denver skyscraper, says that when fund-raising pressures weigh on her, she heads to Mr. Marquez's office for a jolt of confidence.
The Marquezes owned all of Venoco before it became publicly traded in November; the company is valued at nearly $700-million.
"I started an oil company with $3,000 and built it into this," Mr. Marquez says during an interview in his office. "By comparison, building the scholarship fund just seems a whole lot easier."
Mr. Marquez has long been associated with Denver Public Schools. His father, who is Hispanic, was a biology teacher at several Denver high schools for four decades, and his mother was a substitute teacher at some of the city's roughest junior high schools. Tim and Bernadette Marquez live just east of downtown, and have sent all three of their children to Denver's East High School. (Two are still there.)
Mr. Marquez himself attended Abraham Lincoln High School, which is in a largely Hispanic neighborhood in southwest Denver, and is one of three city schools that will benefit from the scholarship fund during a pilot project this year. Next year, students at all public high schools — the city has nine large traditional high schools, and several alternative and charter schools — will be eligible for the scholarships.
The college-going rate for Lincoln graduates was just 17 percent in 2004 — the year before a program that inspired the Denver Scholarship Foundation went into effect — and Mr. Marquez attended the school during an equally difficult time in the late 1970s.
He recalls losing two schoolmates to violent deaths, and friends who could have gone on to college but didn't, due to lack of money and encouragement. Mr. Marquez's family stressed the importance of education, and he took challenging courses that helped him gain admission to the Colorado School of Mines, in nearby Golden.
He says he hated his time at the university. Between long hours working at the nearby Coors plant and the grueling study required of a petroleum-engineering student, Mr. Marquez says he had "zero social life." But when he graduated from the university in 1980, he had his pick of jobs.
For years he didn't give a penny to the Colorado School of Mines. But in recent years, he has come to credit much of his business success to the skills he acquired at Mines. In December 2005, he gave the institution $10-million to help construct a new petroleum-engineering building. Aside from the scholarship-foundation pledge, it is his only gift to a charity worth $1-million or more.
"I went from saying I'd never give them a dime to giving them the biggest gift in their history," Mr. Marquez says.
Creating a Company
After graduation, Mr. Marquez landed a job with Unocal in Southern California. He rose to a prominent position at the oil company — he handled one of its largest property acquisitions — but he chafed under the corporate hierarchy. "I was a square peg in a round hole," he says.
Coworkers thought he was crazy to give up a stable, well-paying job — just after his youngest daughter was born — to start Venoco in 1992 with his partner, Rod Eson.
But the duo had a knack for spotting bargains among low-producing oilfields. The company bought its first oil field, in Whittier, Calif., for just $150,000, Mr. Marquez says. The company put in new pumps that produced higher volumes, and within a year, the field was producing a profit of more than $100,000 each month.
The majority of Venoco's operations have historically been in California, where it has both off-shore platforms and inland wells. The company mantained headquarters outside Santa Barbara until Mr. Marquez moved them to Denver in 2005. Venoco got serious about corporate philanthropy a decade ago, mostly for strategic reasons — oil companies aren't exactly popular in California, which is known for its environmentalism.
But along the way, the Marquezes discovered that they really enjoyed giving money away. (Bernadette Marquez still handles much of the company's philanthropy.) Venoco is a major supporter of Computers for Families, a Santa Barbara charity that provides free refurbished computers to students from low-income families. This year, Mr. Marquez says, Venoco will give a total of more than $1-million. (The company earned nearly $22-million through the first nine months of 2006.)
"What impressed most of us here in Santa Barbara is that he actually sat on boards," says Thomas C. Parker, president of the Hutton Foundation, which is located in the city and makes grants to charities in three local counties. "It wasn't about just getting a better image for the oil company. You could tell that he really cared."
Wealth and Controversy
Not everyone was impressed with Venoco. In 2003, a law firm that employs Erin Brockovich — the same woman who discovered a cover-up involving contaminated water, recounted in a movie starring Julia Roberts — sued Venoco and other companies that had operated an oil field on the campus of Beverly Hills High School.
The firm alleged that contaminated air produced by the oil wells had led to cancer in hundreds of plaintiffs. But air-quality experts found little evidence of harmful air pollution, and a judge in Los Angeles County dismissed the lawsuit in November.
Venoco's rapid growth attracted the attention of Enron, and the company, then among the most-glamorous stocks on Wall Street, invested $60-million in Venoco in 1998. But Enron sought to get its money back as it plummeted toward bankruptcy in 2001, resulting in a battle for control of Venoco that eventually led to Mr. Marquez's ouster as chief executive officer.
He returned to Denver and founded a new oil company, but retained his 40-percent ownership in Venoco. In 2004 — as lawsuits with Enron weighed on Venoco's prospects — he bought out his partners in the company, purchasing the 60 percent he didn't own for $14-million. That stake in the company is now worth more than $400-million.
Tim and Bernadette Marquez like to travel and eat at nice restaurants, and they own homes in Denver, Santa Barbara, and near the Beaver Creek Resort in the Rocky Mountains. Mr. Marquez enjoys running, snowboarding, and reading (he's working his way through a list of presidential biographies), but the family has no jet or yacht — common indulgences among people worth more than half a billion dollars.
"We have a really nice lifestyle," Ms. Marquez says. "At a certain point, it's just money and what do you do with it? You can help a lot of people with millions of dollars."
Mr. Marquez says he will pay for college and a down payment on a home for his three daughters, and that's it. (His wife echoes this general view, but hints the couple might share a bit more.)
"In Santa Barbara, I saw a lot of 'trustafarians,'" Mr. Marquez says, referring to young people living off trust funds. "People need motivation. The worst thing we can do to our kids is give them a bunch of money and take away their incentive to want to do something on their own."
Ms. Marquez is passionate about health care, and continues to work one day each week as a nurse. She would someday like to make a major gift to help make health care more affordable to poor people.
Mr. Marquez is primarily interested in education. He has a friend in Tanzania who asked him to support education for students in that country. While Mr. Marqeuz says he would consider giving internationally, for now he doesn't know where he would start.
"I'm opportunistic," Mr. Marquez says. "If something speaks to me, we could do it pretty quickly."
A College-Bound Plan
In 2004, Scott Mendelsberg, then the principal at Lincoln High, came up with a radical idea: Have students stick around for a fifth year, even if they have enough credits to graduate, and use the same state funds Lincoln receives for regular students to send the fifth-year students to college. His idea riled some bureaucrats, but it increased the college-going rate at Lincoln to 73 percent in 2005, from 17 percent in 2004.
Mr. Marquez could see that state officials would quash the program, so he called Mr. Mendelsberg and offered to use his own money to send kids from his alma mater to college.
Denver's mayor, John Hickenlooper, had earlier made a similar promise to a group of kids at another school. In late 2005, the mayor and Mr. Marquez hatched plans for a more-ambitious effort — the Denver Scholarship Foundation.
The scholarship foundation already has "future centers" operating at Lincoln and two other high schools that are part of the pilot project this year. Each is staffed by a full-time coordinator, employed by the foundation, who focuses solely on helping students identify and apply to colleges or trade schools, and pursue scholarships.
"We're the most inclusive, intrusive scholarship provider ever," says Tonda Potts, the foundation's director of student services. "We're not asking students to get in the game. We're going out and grabbing them and saying, 'You will get in the game.'"
Michael F. Bennet, superintendent of the Denver Public Schools, says the scholarship fund puts heat on the system to better prepare students for college.
"There's no longer the financial barrier that there was before," Mr. Bennet says. "This gives us one more reason to get our act together."
One tough issue is how the scholarship fund will handle undocumented immigrants; more than half the students in Denver Public Schools are Hispanic. Undocumented students are ineligible for state or federal financial aid, and must pay out-of-state tuition. At the University of Colorado at Boulder, that's nearly $23,000 per year.
Even though the scholarship fund is private, and isn't limited to supporting legal residents, such expenditures on undocumented students could prove costly and controversial.
Mr. Marquez, who thinks his father's father may have entered the United States illegally, says he and his wife may tap their own bank account to provide scholarships to those students. "These kids are here not of their own choosing — their families brought them here," he says. "We can't just forget about them."
The foundation assumes that the number of graduates from Denver Public Schools who go on to college will rise sharply. Last year, only 400 graduates of the system earned a college degree, but the foundation's plan for spending $20-million per year assumes that 6,000 kids will eventually be taking college courses. Foundation officials know that some students will go part time, and they are eligible to receive a scholarship for up to eight years.
Mr. Marquez thinks the foundation can raise a total of $200-million over the next few years for its endowment — enough to provide $10-million in scholarships annually — and that it can raise another $10-million each year for operating support.
"Everyone wants to help out education, but people sometimes feel lost because it's such a big thing to tackle," he says. "This is something that people can get their arms around."
Ms. Gullickson, the foundation's executive director, thinks raising $10-million each year will be a challenge. She would prefer to have more money in the endowment.
But Ms. Marquez, who volunteers at the scholarship foundation and serves on its board, says she's learned in nearly 25 years of marriage not to doubt her husband's strategic thinking.
"You have to think big sometimes," she says. "When you think big, big things happen."