Buffett's Crisis Control: 'Lay It Out As You See It'
Sep. 03, 1992
OMAHA, Neb. (AP) _ Warren Buffett has some simple advice: When you're caught in a scandal, tell the truth.
The billionaire investor used his folksy manner to woo the press and his non-nonsense style to restructure and save Salomon Inc. after a Treasury bond scandal at the Wall Street firm last year.
On Wednesday, Buffett offered some chestnuts about coping with troubles - hold a news conference early, waive attorney-client privilege, share information with the media and government.
''Never lie under any circumstances. Don't pay any attention to the lawyers,'' Buffett said at the Omaha Press Club. ''If you start letting lawyers get into the picture, they'll basically tell you, 'Don't say anything.'''
''You'll never get tangled up if you just basically lay it out as you see it,'' the Omaha resident said. ''It's very fortunate when you aren't implicated in any way yourself.''
After Salomon last August admitted it repeatedly submitted false bids during Treasury auctions from 1989-91, Buffett, who owns a large stake in the firm, took over as interim chairman.
He overhauled management and restructured operations before stepping down in June after Salomon agreed to pay $290 million in penalties but avoid criminal charges.
Buffett, believed to be worth more than $4 billion, heads Omaha-based Berkshire Hathaway Inc., an investment conglomerate with holdings in such companies as Capital Cities-ABC and The Washington Post Co. Berkshire also publishes the Buffalo (N.Y.) News.
He has a media background. Buffett's grandfather bought the Cuming County Democrat in West Point in 1905 and his family lived above the paper. His mother worked at the paper to earn money for college, where she met her husband, editor of the campus newspaper.
Buffett said he delivered newspapers as a boy and worked for a newspaper during college.
Sipping a can of Cherry Coke, the usually low-profile Buffett said he has ''probably spent more time over the last 10 years ... with reporters then any other CEO I know.'' He said he averages about two hours a week on media calls.
On topics such as banking and savings & loans, Buffett said he tries to talk to people who know the subject, ''otherwise you just go 45 minutes or an hour and you're basically giving a course in Insurance 101 or something, and in the end they don't know enough to write a good story.''
And he cautioned about what he views as the media's power.
''The tough part about it is that essentially there is no one, virtually with the exception of an assassin, that can do you as much damage as somebody can in the press if they do something the wrong way,'' he said.
''There may be doctors out there who can do you just as much harm, but you initiate the transaction.''