The Snowball_ Warren Buffett and the Business of Life - Alice Schroeder [373]
Gutfreund’s lawyers called Charlie Munger as a witness. Frank Barron of Cravath, Swaine & Moore had attempted to prepare Munger, who was utterly impatient with the process. Although Barron had prepared Munger by himself, Munger, a lawyer who disliked paying legal bills, extemporized to the arbitrators that, in preparing him for testimony, Cravath had employed an excessive number of expensive paralegals and “aspirin-carriers.”67 When he began to testify, every word that came out of his mouth “had nothing to do with what we had gone over,” says Barron. “Putting Charlie Munger on the witness stand was the most nerve-racking, hair-raising experience I ever had as a lawyer.”68
Munger’s confidence as a witness was unmatched. A number of times the lead abitrator, growing irritated, admonished him: “Mr. Munger, would you please listen to the questions before you answer them.”
Munger insisted that on the night when he had met with Philip Howard, he was “deliberately not listening…being polite, but I wasn’t paying much attention…I sort of turned off my mind…. I was just sitting there politely with my head turned off.”
Gutfreund’s lawyers asked him whether he had made a conscious decision not to talk as well as not to listen.
“No,” said Munger, “when the time came to talk, I talked. One of my faults—I am fairly outspoken. I may well have discussed some individual things that got through my band of indifference. This is one of my most irritating conversational habits. It followed me through the course of my life.
“So every time something would get through and I would see a counterargument,” he said, he would give it. Howard had asked for an indemnification for Gutfreund against lawsuits. Being a legal matter, this had gotten through Munger’s band of indifference.
“I think I said to him, You don’t even know what you are going to need. God knows there will be litigation, there will be a big mess, who knows how things are going to work out. You are misrepresenting your own client if you think it makes sense to get into any of those issues at this time.”
Was that also a conversation in which you were tuning out? asked Gutfreund’s lawyer.
“No, I tend to tune in when I am speaking myself,” said Munger, under oath. “I tend to remember what I say.”
Was this also a conversation in which you were deliberately not listening at various times?
“What did you say?” said Munger. “I just tuned out again, and I wasn’t doing it on purpose.”
Was this also a conversation in which at various times you were deliberately not listening?
“I am ashamed to say I have done it again. Will you please do it one more time? This time I will use an effort.”
Gutfreund’s lawyer repeated the question for the third time.
“You bet,” said Munger. “I was going through the motions.”
In what mental state the arbitrators, the lawyers, and Gutfreund heard these words can only be imagined. Regrettably, much of the misunderstanding seems to have lain in Philip Howard’s unfamiliarity with the outward signs of the workings of Charlie Munger’s mind. He had labored that night under the illusion that he and Munger were having a conversation. He did not recognize Munger’s occasional replies as intermittent thought-bursts ignited by some random mite that had pierced Munger’s band of indifference. Whenever Munger objected, Howard assumed they were negotiating, not that he was simply being lectured. When Munger said nothing or emitted a grunt to move the conversation along, Howard inferred that Munger agreed, or at least that he had no objection to whatever had just been said. Nobody had explained to him that Munger’s head was turned off.
Gutfreund’s lawyer reminded Munger of Buffett’s testimony, in which he had acknowledged saying to Gutfreund that he had the power to make all this happen. Did Mr. Munger recall Mr. Buffett saying that?
“I don’t remember Mr. Buffett’s words as well as I remember my own,” said Munger. “But certainly the gist