Warren Buffett Forced to Testify Before Financial Crisis Commission

Warren Buffett
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Warren Buffett

Warren Buffett's appearance next week before the Financial Crisis Inquiry Commission is a "command performance," after he was subpoenaed to testify at a hearing focusing on the credit rating agencies.

Berkshire Hathaway is Moody's largest shareholder, although Buffett's company has been reducing those holdings in recent months. Several Moody's executives, including its current CEO, will also be answering questions.

Fortune's Carol Loomis reports tonight (Thursday) that the Commission had to resort to what Gary Cohen, the FCIC's general counsel, called a "compulsory process" after Buffett turned down several invitations to be questioned.

Loomis is a long-time Buffett friend, editor of his annual letter to Berkshire shareholders, and a Berkshire shareholder.

She quotes Buffett as saying, "This is an offer you can't refuse."

Loomis writes that Buffett decided to politely decline the Commission's initial request on May 12 for a "private interview" and possible follow-up appearance at a hearing. The letter to Buffett said his views would be of "great value" to the panel:

"Buffett had by that time watched some of the Commission's hearings and knew that the witnesses had mainly been people implicated in the crisis -- bankers, notably -- or charged with regulating it out of existence.

Knowing that he was in neither camp and doubtful that his testimony would indeed be of 'great value,' he decided to say no to this surprising invitation."

A May 17 "renewed request" from the Commission included the line, "We would prefer not to use compulsory process to secure your cooperation, and are sure that it will not be necessary."

After Buffett told Cohen he would not appear voluntarily, he received another "respectful request" on May 25, accompanied by a subpoena that said he had been "COMMANDED to appear and give testimony."

Loomis says Cohen, and two other FCIC representatives came to Omaha Wednesday for a preliminary "private interview" that covered the credit rating companies and other subjects associated with the financial crisis.

Buffett tells Loomis that he "liked the men and enjoyed talking to them." The two men accompanying Cohen brought books for him to autograph.

She concludes, "Provided that the commission members ask intelligent questions and don't try to grandstand, this writer predicts that Buffett will enjoy the hearings as well."

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