The Snowball_ Warren Buffett and the Business of Life - Alice Schroeder [224]
This Forbes piece struck a very different tone than the glowing article the magazine had published two years before. It described a San Jose Water Works shareholder who wanted to unload his stock. He went to a company director who sent him to Buffett. The article insinuated that Buffett must have known that a deal was brewing for the city to take over the water works at a higher price than he was paying for the stock—simply because a director had referred a seller to him. He had connections, so he must have known something—right? The article ended: “…the American Stock Exchange and the San Francisco office of the Securities Exchange Commission are making inquiries and asking questions.”14
But there was nothing illegal about a director referring a seller of stock to a buyer.15 Indeed, no deal ever took place. Yet to anyone checking him out, this would be the most prominent, public, recent mention of his name apart from Supermoney.16 Buffett felt like a cat’s scratching post. If this cascaded into a series of expanding stories, it could wreck his newly gilded reputation even though the story had no substance to it. He was not the type to storm and shout, however, but to brood and plan. Thus, while angry, he was too clever to confront the magazine and denounce its nameless reporter. He wanted retribution and vindication, so he used the opportunity to bring himself to the attention of magazine publisher Malcolm Forbes, writing him an artfully worded letter in which he talked of the pitfalls of journalism, complimented him on the magazine’s good “batting average” in investigative reporting over the years—to which the article on San Jose Water Works was some kind of unfortunate exception—and mentioned the Sun’s Pulitzer.17 On the same date he wrote a crisper letter, sans the flattery, to the editor, stating the facts to support his innocence.
Sure enough, Forbes ran a correction. Buffett knew, however, that corrections were rarely read and had no impact as compared to the initial story. So he also sent one of his proxies, the loyal Bill Ruane, to talk to the editors, not to complain but to position Buffett as an expert who could write an article about investing.18 The attempt failed, at least initially.
Buffett now had a new cause—outrage at bias in news reporting—which wound itself around his sense of justice and his interest in journalism in general. That a reporter could lie by inference or omission without any accountability drove him wild. He knew that even well-intentioned news publications flew into a state of high dudgeon and defended their reporters’ dubious behavior on the premises of newsroom morale and press independence. This stance, he would later learn, was referred to at the Washington Post as the “defensive crouch.”19
Eventually, he would end up helping to fund the National News Council, a nonprofit organization that arbitrated complaints of journalistic malpractice. The council’s position was that media had become dominated by monopolies and concentrated in a few hands; this lack of competition meant that the First Amendment’s right of freedom of the press gave publishers “power without responsiblity.” The council offered redress to victims who had been “traduced, misquoted, libeled, held up to unjustified ridicule, or whose legitimate views have been ignored in a one-sided report.” Unfortunately, those very monopolies and the few publishers who dominated the media had no interest in publishing the News Council’s rulings, which exposed their biases and the carelessness and incompetence of their reporters. The News Council eventually folded after its findings were spiked,