Buffett Answers Tough Questions at Berkshire Meeti

Omaha, NE, May 3--Billionaire Warren Buffett played the ukulele, told jokes and answered tough questions about investigations into some of his insurance companies as about 20,000 people gathered for the annual meeting of Berkshire Hathaway Inc. Before answering nearly six hours of questions from shareholders Saturday, Buffett toured exhibits of Berkshire companies that sell products ranging from ice cream to car insurance and carpeting. The Berkshire chairman and chief executive even strummed the ukulele and sang at the Fruit of the Loom stand. "Good morning," Buffett greeted shareholders who were packed to the rafters in a 17,000-seat auditorium. "I'm Warren, he's Charlie," Buffett said, introducing Berkshire vice chairman Charlie Munger. "We work together. We really don't have any choice because he can hear and I can see." About 2,000 shareholders watched from a closed-circuit television screen in an adjoining room and still more roamed the display booths as Buffett and Munger talked about the prospects for their $130 billion company, the U.S. trade deficit and the qualities of good managers, which they said include a passion for business, intelligence and integrity. "If they don't have the last," Buffett said of managers, "the first two things will kill you." Buffett told shareholders Saturday that the Berkshire board would discuss the possibility of paying a dividend for the first time in the company's 40-year history. It won't happen in the near term, but if Berkshire cannot find good investments for its cash over the next few years, shareholders should have some access to that money, he said. Berkshire currently has about $45 billion in cash and no major acquisitions in sight, he said. Shareholders also voted Microsoft Corp. chairman Bill Gates onto the Berkshire board, marking the first time Gates, the world's richest man, and Buffett, the world's second richest, will serve on the same board. Gates and Buffett are friends, and both are worth more than $40 billion. Gates was at the meeting, but he did not address shareholders. Buffett faced questions about a federal investigation into a reinsurance transaction between insurance company American International Group Inc. and Berkshire subsidiary General Re. The transaction appeared to boost AIG's reserves when markets were uneasy about the company's outstanding liabilities, and AIG has acknowledged that its accounting for the transaction with General Re was improper. Buffett is not a target in the probe, but he did answer regulators' questions on April 11 in New York. Buffett told shareholders he could not comment on what he told federal officials, but he could comment broadly on the investigation. Buffett said the key to the investigations is whether someone knowingly participated in any accounting fraud. His insurance companies provide reinsurance _ which helps spread policy risk _ to hundreds of other insurance companies and cannot always answer to what those firms do with those contracts, Buffett said. "They could be doing anything with the accounting," Buffett said.

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