Saint Warren’s Dark Side

Ugliness the media overlook

 

Last Updated: 10:52 PM, January 31, 2012

Charles Gasparino

Imagine a Republican president regularly invoking the wisdom of a multibillionaire businessman who had profited off companies with questionable business practices, and who law-enforcement officials had recently asked to provide information about his own company’s questionable practices. No question about it: Democrats and the media would be having a field day.

So why do we hear so little about the dark side of Warren Buffett?

True, the double standard involving Buffett’s business record is longstanding. But now President Obama is using him as a central prop in his class-warfare strategy for winning a second term.

AP

Getting a free pass from the press? The SEC recently questioned Warren Buffet over some nasty corporate cronyism.

Yes, Buffett is a great investor; his Berkshire Hathaway company has made him a multibillionaire and earned shareholders lots of money over the years. But in all my years in journalism, I’ve never seen a business figure get such a free pass from the media even when his public pronouncements are oozing with hypocrisy, let alone when he steps over the line into sleaze — as Buffett has done on more than one occasion.

But then “St. Warren” wears his liberal politics on his sleeve: He wholeheartedly backed Obama back in 2008, and now is lending his name (and his secretary’s) to Obama’s cockamamie tax scheme, a k a the Buffett Rule — which would barely make a dent in the federal deficit, but would certainly squeeze small-business owners and other job-creators.

Now, Buffett’s hypocrisy on taxes is well known to readers of these pages: He decries the fact that rich investors like him get taxed mainly at the lower capital-gains rate of 15 percent. Yet he made his vast fortune enjoying that favorable treatment, and largely kept his mouth shut until now, as he nears the end of his long career. Plus, he plans to use a charitable trust to further shield much of his income from taxes.

Much less has been said about Buffett’s unsaintly investment record. I won’t bore you with every gory detail of his questionable associations, which include no-lose investments in Goldman Sachs and General Electric just before the companies received massive federal aid during the financial crisis.

But other items really take the shine off St. Warren’s halo — like his insistence that the ratings agencies didn’t play a key role in setting up the 2008 financial meltdown.

In fact, the ratings biz was rife with conflicts of interest, since the agencies were paid by the same entities they were rating. Most people figure that’s why these “watchdogs” ignored major signs of trouble in the housing markets as they slapped all those Triple-A ratings on the toxic housing-related debt that was at the heart of the financial crisis.

But Buffett has publicly defended the rating agencies as bit players in the debacle, caught up in the mania much like nearly everyone else. His obvious motive: He held a major stake in rating agency Moody’s Investors Service, so Berkshire got a nice cut out of all those fees that Moody’s “earned” as it fueled the crisis.

It’s hard to believe a conservative businessman would be able to get away with that hypocrisy — not to mention the association with a business that helped do so much damage to the US economy.

It’s also hard to believe that any conservative businessman who was just interviewed by the Securities and Exchange Commission over some corporate sleaze would be getting invitations to the White House, much less be touted at the State of the Union Address.

The SEC interviewed Buffett last year over one of the most sordid corporate affairs I’ve seen in a long time: His longtime aide and one-time heir-apparent bought shares in a company called Lubrizol just before Buffett purchased the outfit.

The executive, David Sokol, made a hefty profit from the purchase, and even advised Buffett to buy the company in the first place.

Insider trading? I can’t say if it was outside the law. But the SEC is looking into the matter. (SEC and Sokol spokesmen declined to comment on the probe’s status; Buffett didn’t return repeated calls seeking comment.)

Yet I don’t recall any major media outfit bringing up the sordid affair while Buffett was lecturing the nation on tax fairness. Nor did any jump on Buffett’s bizarre initial reaction as Sokol was resigning from Berkshire last year: He defended Sokol’s actions — which, even if they weren’t illegal, still smack of the kind of corporate favoritism that Obama and the rest of the left continually denounce.

Buffett later issued a statement that, after reviewing the facts, he’d changed his mind: What
Sokol did was bad, after all. But why did it take Buffett so long to realize that corporate cronyism reeks?

You’ve also got to ask why the president has embraced a businessman with this type of record — and why the media are letting him get away with it.

Charles Gasparino is a Fox Business Network senior correspondent.

Sophie:  Guess which Liberal Saint has a contract to deliver Canadian oil to the Pacific Coast by rail, which would have been negated by the Keystone XL pipeline?  He is the same Liberal Saint, whose "poor" secretary earns between $250,000 and $500,000 and year and just purchased a second home in a very tony area in Arizona.