BECKY: Do you think Goldman Sachs committed fraud?
BUFFETT: From everything I know about the Abacus transaction, the answer to that is no, and I'll go through that transaction in detail at the meeting and we'll see what people think when I get through explaining it. It has not been explained well in the media, so it is part of my job today to actually lay out the facts on it.
BECKY: Where do you think we got it wrong in the media?
BUFFETT: I don't think that the media - I think it came out on a Friday, I think the stories were written very quickly. It was a 22-page complaint, as I remember. I read it. But I think people tried to explain it too fast. And the other side of it is Goldman did not have an immediate response because my understanding is they did not know it was coming, so they have to vet something through lawyers and all of that, and so they missed the news cycle.
BECKY: Fraud is a legal term. Back with Salomon you said, 'If anyone at the firm lost a shred of reputation you'd be ruthless.' Did anyone at Goldman lose a shred of reputation?
BUFFETT: If they lost it for a reason. If they lose it because somebody makes an allegation in the paper, I do not consider that - They may be behind the eight ball for awhile, but when they get all through, if they have cost the firm reputation and they are in a position of responsibility, they should leave. But I have not seen any evidence of that.
BECKY: How would you 'act ruthlessly' if that's the case? Do you sell the stock?
BUFFETT: Well, if I were in the company I would fire the people responsible. And we did that at Salomon. But I certainly would wait until the facts got in. And I think, I really think - We'll have 40,000 people here today and I think 39,900 of them do not understand the Abacus transaction and I'll do my best to clear it up.
BECKY: Do you think Lloyd Blankfein has performed admirably as the CEO?
BUFFETT: Yeah. But I think that Goldman, and I can understand the reasons why, but it's essentially the PR battle. If you're slow these days in news cycles, you've got a real problem. (Laughs.)
BECKY: So you think they were slow in the news cycle?
BUFFETT: Well, I think they had a problem in that they heard about something at 11 in the morning, and it's a 22-page complaint, and they want to draft a response, probably the lawyers get involved and various people. I would have tried to write something in a couple of hours at the most, because you miss that cycle and then the other side has defined the issue.
BECKY: Lloyd Blankfein just went on with Charlie Rose and did an hour.
BUFFETT: Good for him.
BECKY: A little bit after the fact, but do you think that's the right way to be getting at it?
BUFFETT: Yeah, I do. You tell what happened. And I think the American people are fair if they get the facts in front of them. But Goldman has lost the PR battle at this point. But at Salomon they lost the PR battle, too. I've seen that happen before.
BECKY: Do you think Goldman did a good job in front of Congress?
BUFFETT: Well, I think they were in a very tough spot. (Laughs.) I mean, if you get a whole bunch of people that are there to grill you and make you look bad, you'll probably look bad. But I think they, I mean, different ones, some of them were probably very nervous and who knows what. And if I'd written a few emails they'd written, I'd probably be fairly unhappy, too. (Laughs.) But I think that considering the circumstances, they were not, that was not an educational hearing. That was a hearing of a different sort.
BECKY: You were disappointed in the Senators?
BUFFETT: No, it's just the nature of the process. You get something that the whole country is watching and people behave differently. (Laughs.)
BECKY: Lloyd Blankfein says that he's spoken with you. Have you advised him on what he should be doing?
BUFFETT: If I had any good advice, I'd give it to him. But I think in terms of getting the facts out, the sooner you do it, as I've said, get it right, get it fast, get it out, get it over. That's easier said than done, but I do think that's generally a good guideline whenever some event causes you a problem. You know, we had our problems with Gen Re. If you have 260-thousand people working for you, it's not a monastery. (Laughs.) You're going to have somebody out there who's doing something. You may wish they weren't, you hope you find it out fast and then you've got to move to correct it.
BECKY: The whole situation with Goldman Sachs is, at this point, you said even (two months ago on CNBC) that they're going to be blaming him for, Goldman Sachs for giving the apple to Eve at some point.
BUFFETT: That's right. In fact, I think they'd settle for that right now if they could make that deal. (Laughs.)
BECKY: Also, when it comes to the weapons of mass destruction. When it comes to derivatives as weapons of mass destruction, how do you now come back and say that you think that you shouldn't have to post collateral for these contracts that have been done retroactively?
BUFFETT: We have no problem if Congress says, 'Post collateral on every transaction starting tomorrow.' Those rules are fine. Past transactions we've negotiated over whether to post collateral or not, and there are different prices for the two transactions. If we are told by the government we should post collateral on past transactions, that's fine as long as we get paid for the differential in the contract value because of that. That's all we care about. And incidentally, the present law, I mean the one they're talking about, I should say, does not give the counterparties the right to force us to post collateral. It does say that if the government decides we're sort of dangerous to society, they can require that we do it. All we say is that if they do, if they say I sold a house unfurnished, and now you've got to throw in the furniture, I just want to get paid for the furniture.