Buffett and Forest River

http://www.futureofcapitalism.com/2010/08/buffett-and-forest-river

At a certain point, you start to wonder how many of these awkward situations Warren Buffett can be involved in and still retain the kindly squeaky clean image. First General Re, then, no matter what you think of the underlying case, Goldman Sachs, and Moody's. Now, according to the Bloomberg wire, there's a lawsuit from a former executive, Brad Mart, of a Berkshire-owned recreational vehicle company, Forest River, who says that he raised allegations of fraud at the company in six phone calls with Mr. Buffett:

Liegl required Forest River to buy parts at inflated prices from a company he owned and appropriated cash from factory vending machines, Mart said. Liegl also reneged on a promise to make Mart CEO, according to the complaint. Mart alleged in the suit that Liegl threatened his life.

The company denies the allegations of fraud and of threats, and this could just be the complaint of a disgruntled former employee seeking a financial settlement. In a company as vast as Berkshire, it's impossible for the chief executive to keep track of everything that is going on, or even to keep track of all the laws that a company is supposed to obey.

Still, you'd think that at a certain point, the gauzy, almost worshipful press coverage the guy attracts might fade into some more skepticism. At the very least, it puts Mr. Buffett's encouragement of billionaires to pledge 50% of their money to charity in a different light. "Every saint has a past, every sinner has a future," Mr. Buffett says. He seems to be placing himself in the "saint with a past" category, while those who haven't yet done what he's asked in terms of the charitable pledge fall into the "sinner with a future" category.

by Ira Stoll  |  Aug 5, 2010 at 9:07 am Related Topics:  Goldman Sachs, Non-Profits, Press, Warren Buffett receive the latest by email: subscribe to the free futureofcapitalism.com mailing list