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By Root 3102 0

Buffett was going to make a lot of money, because with Berkshire’s hoard of capital and good credit rating, he could fund the Claytons, more or less forever, on terms more attractive than anyone except a sovereign government. It seemed almost unfair. Some of the shareholders were convinced that the Claytons had sold out to Buffett too cheap in order to keep their jobs and benefit themselves or to get access to that war chest. The potential conflict of interest when the management of a public company wanted to sell the company to Berkshire was about to set off a war.

William Gray of Orbis Investment Management, for one, thought the Claytons were heisting the company on behalf of Buffett. He filed a petition with the SEC and a lawsuit with the Chancery Court in Delaware, where Clayton was incorporated; his argument was that the Claytons were not trying to get the best deal for shareholders, because they had signed the exclusive clause preventing them from entertaining competing offers. He sought a ruling that they not be allowed to vote their shares on the deal and wanted a special shareholder meeting called to replace the Clayton board.25 After all, said one investor, “if Buffett bids for something, it must by definition be undervalued.”26

Buffett’s reputation, which had been an asset for so many years, had begun to work against him in certain other ways as well. He was such a magnet for publicity that anyone who wanted publicity for themselves or their cause could hijack his shareholder meeting or misappropriate his fame to get it. And so it happened that just before the shareholder meeting and around the time that Berkshire had announced the Clayton deal, Doris Christopher, CEO of The Pampered Chef, called him with just such a problem.

The Pampered Chef sold kitchenware at home parties through independent salespeople, mostly women. After Berkshire’s purchase of the company, members of pro-life organizations had begun boycotting their parties. Berkshire’s position was that it made no donations to pro-choice or reproductive rights groups, but only acted as a conduit for its shareholders, who through the charitable-contributions program had the right to allocate $18 per share to the charity of their choice. Of the $197 million that had been donated to nonprofit groups of all types, the largest number of recipients were schools and churches, many of them Catholic, and most of the money went to causes not related to abortion. But a significant amount of money had gone to reproductive-rights organizations.27 As it happened, Warren and Susie’s personal share of the contributions—about $9 million in 2002—went to the Buffett Foundation, where it mostly funded reproductive rights. That Berkshire’s money should be funneled this way was what was bothering the pro-life groups. The argument that the contributions were not Berkshire’s fell on deaf ears.28 In 2002, Buffett had tried to square things with one of these groups by showing them how much money went to causes other than family planning. He got a reply from the president of Life Decisions International, saying, “Even if only $1.00 went to Planned Parenthood and $1 billion was donated to pro-life organizations, the former gift would still land Berkshire Hathaway on The Boycott List.”29 If the price of filling a parking meter was enough to attract a boycott, that was a pretty clear sign that Berkshire would find little room for compromise.

Doris Christopher had tried to mediate, telling her people that while she personally did not agree with Buffett, “it is not my place to ask or to judge” how he donated money. Fewer than a thousand of the 70,000 Pampered Chef consultants were petitioning Christopher over this issue.30 Still, the boycott was affecting business and hurting the people involved. They were being intimidated by pro-life picketers who were now making appearances at the hosts’ houses during sales parties. Christopher called Buffett to tell him the disruption to her business was getting worse.

“She didn’t ask me, but I could tell she was hoping I would cancel the program.