The Snowball_ Warren Buffett and the Business of Life - Alice Schroeder [364]
“It isn’t that we’re misunderstood, for Christ’s sake,” said Buffett afterward. “We don’t have a public-relations problem. We have a problem with what we did.”
On his birthday, August 30, Buffett went down to Washington. He had decided to prepare for upcoming congressional testimony and had arranged with Steve Bell, who ran Salomon’s Washington office, to gather a group to try to anticipate what questions the Congressmen might ask him.
He checked in to the Embassy Suites hotel next to GEICO’s offices. As the emergency continued, he holed up in his room for two days. He encountered a telephone operator at the hotel, Carolyn Smith, who became his de facto secretary and Daisy Mae, manning the phones and sending cookies upstairs for him to eat for dinner. They never met in person, but when Nick Brady from the Treasury Department called, she got word to Buffett even when he was tied up on the single line in his room.20
After a couple of days, Buffett found time to go over to Salomon’s fancy offices, where Bell had gathered people to brainstorm. Bell had called New York in advance, asking what to feed Buffett. “Something simple,” he was told. “Feed him hamburgers.” Bell was one of many people over the decades who thought this advice surely could not be literal. When lunchtime arrived, the chef sent out a plainly prepared fish course. Buffett didn’t touch it. Then came a pretty salad with a nice imported cheese. Buffett ignored it. Veal or something similar arrived as the third course. Buffett took a bite or two and pushed the food around on his plate. “Mr. Buffett,” Bell said, looking worried, “I’ve noticed you haven’t been eating your food. What’s wrong? Is there something else we can get for you?”
“I follow a very simple rule when it comes to food,” said Buffett. “If a three-year-old doesn’t eat it, I don’t eat it.”21
The following day, Buffett, Deryck Maughan, and Bob Denham went to the Rayburn House Office Building to testify before Congress. Katharine Graham showed up to lend moral support, sitting with Maughan and Denham in the first row. Buffett made a striking impression, seated alone at the subcommittee table and pledging extraordinary cooperation with Congress and the regulators.22 “I want to find out exactly what happened in the past so that this stain is borne by the guilty few,” he said, “and removed from the innocent.”
The Congressmen excoriated Salomon, postured as saviors of investors, and demanded a total break with the past. Nonetheless, they appeared slightly awed by Buffett. When he spoke, “The Red Sea parted, and the Oracle appeared,” says Maughan.23 Buffett laid the problems on Wall Street. “Huge markets attract people who measure themselves by money,” he said. “If someone goes through life and measures themselves solely by how much they have, or how much money they earned last year, sooner or later they’re going to end up in trouble.” Salomon, he said, was going to have different priorities from now on.
“Lose money for the firm, and I will be understanding. Lose a shred of reputation for the firm, and I will be ruthless.”
Those words have since been parsed and dissected in classrooms and case studies as the model of corporate nobility. Buffett’s unflinching display of principle summed up much about the man. In this statement, many of his personal proclivities—rectitude, the urge to preach, his love of crisp, simple rules of behavior—had merged. Openness, integrity, extreme honesty, all the things that he meant to stand for: Buffett meant for Salomon to stand for them too. If Berkshire Hathaway was his editorial page, Salomon would be the church of finance.
Buffett headed back to 7 World Trade Center and put out a one-page letter to employees, insisting they report all legal violations and moral failures to him. He exempted petty moral failures like minor expense-account abuses, but, “when in doubt, call me,” he told them. He put his home phone