NEW YORK (CNNMoney.com) - Boone Pickens got a special tax break when he donated $165 million to the sports program at Oklahoma State University, his alma mater, last year, and the school then turned around and invested the money with Pickens' own hedge fund, according to a published report.

The New York Times reported Friday that records show that Pickens' donation spent less than an hour on Dec. 30 in the account of the university's charity, O.S.U. Cowboy Golf Inc., before it was invested in BP Capital Management, a hedge fund controlled by Pickens.

Pickens, whose name graces the school's football stadium, is one of the board members of Cowboy Golf, according to the Times, which said the charity is now being turned into a charity to benefit the school's athletics at large.

The newspaper also reports that Pickens also benefited from a provision in Hurricane Katrina relief legislation that allowed him a deduction for a charitable gifts made in 2005 equal to 100 percent of his adjusted gross income, double the normal limit of 50 percent.

If he does not have that much income in 2005, he can carry the deduction into future years, according to the paper, which added the size of the donation propelled Pickens into the ranks of the nation's top philanthropists last year.

Mike Holder, the university's athletic director, who is also on the board, defended giving Pickens continued control over the donation through the investment with BP Capital.

"If a person's making a gift of that size, he can stipulate what he wants it invested in," Holder told the paper. He said that previous investment of Cowboy Golf assets with Pickens have more than quadrupled in value.

"I may not be the smartest person around, but when you've invested $6 million with someone and they've turned it into $31 million, it makes you feel confident enough to have all your investments with that person," he said, adding that he has invested some of his personal money with the fund.

Jay Rosser, a spokesman for Pickens and BP Capital, told the paper that the fund has waived all fees and its share of the profits on the Cowboy Golf investment.

Forbes magazine estimates Pickens' net worth at $1.5 billion, ranking him No. 207 on the list of the richest Americans. That was double his estimated net worth of a year earlier.

The investment of the donation, while unconventional, appears to be legal under tax law, the paper reports. But there were still some who criticized the way the donation was handled.

"Sadly, it's another case of a rich man manipulating charity for his own benefit," Marcus Owens, a lawyer who formerly headed the division of the I.R.S. that oversees tax-exempt groups, told the Times.

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