Money clashes with mission

The agent was a smooth talker, and the Busbys were not concerned that he didn't offer them a chance to study the documents.

They later found that their interest rate was 11% -- far too high. Assuming an honest mistake, the couple returned to Ameriquest. The agent said he would get them a better loan. Things moved so fast, they said, that they had no opportunity to read the dozens of pages of fine print.

The new terms were worse. The payments nearly equaled their entire income.

Ultimately, they sued, saying Ameriquest had invented a car sales business for Cheryl to improve her financial status, complete with a phony business card. Cheryl was 63 and had never sold a car in her life. Their lawsuit also said the agent had fabricated a higher income to "flip" the Busbys into a bigger loan, larded with illegal charges.

The Busbys couldn't make the payments and were forced to sell. The bungalow had been in Cheryl's family since 1935. It was where she had grown up and where her parents had died. It was 100% of the Busbys' retirement nest egg.

Now it was gone.

"It was a traumatic experience," Jeff Busby said, sitting with his wife in the small rented house where they ended up, awaiting the outcome of their lawsuit. Both talked at once, pouring their story out.

"Jeff went into the hospital for a month -- a depression," Cheryl said, her eyes brimming. It was his first relapse of bipolar disorder in many years.

White-haired at 65, Jeff Busby still had the barrel chest of a former athlete who once played scratch golf, but he moved and talked nervously. Losing their home had taken a toll.

"I kind of went berserk," he said.

The Busbys found a lawyer through Cheryl's employer, Solid Ground, a Seattle nonprofit that counsels victims of predatory lenders. Since 1998, the Bill & Melinda Gates Foundation has awarded the nonprofit grants totaling $1.2 million. Yet at the end of last year, the Gates Foundation had more than $2 million invested in securities from Ameriquest.

The conflict is one of many that a Times investigation has found between the foundation's investments and its good works. The Gates Foundation reaps vast profits every year from companies whose actions contradict its mission of improving society in the United States and around the world, particularly the lot of people afflicted by poverty and disease.

The Times has found that the Gates Foundation had major investments in:

* Mortgage companies that were accused in lawsuits or by government officials of making it easier for thousands of people to lose their homes.

* A healthcare firm that has agreed to pay more than $1.5 billion to settle lawsuits accusing it of medical lapses and fraud going back a decade.

* Chocolate companies said by the U.S. government to be profiting from the slave labor of children.

Critics fault the Gates Foundation most for failing to use the power of its immense wealth to improve the behavior of the companies in which it invests. At the end of 2005, the foundation's endowment stood at $35 billion. In June 2006, Warren E. Buffett, the world's second-richest man after Bill Gates, pledged to add about $31 billion.

That $66 billion will give the Gates Foundation more than 10% of the assets of all of the charitable foundations in the United States and provide it with unmatched muscle and potential moral authority. Though it does a vast amount of good with its grants, the foundation declines to use its influence in efforts to reform companies whose business practices flout its goals.