Buffett Won't Have to Provide Documents in Trial (Update1)

By Josh P. Hamilton


Jan. 2 (Bloomberg) -- Berkshire Hathaway Inc. Chairman Warren Buffett won't have to turn over some records sought by the former head of a subsidiary whose fraud trial starts Jan. 7.

Judge Christopher Droney, of U.S. District Court in Hartford, Connecticut, ruled today to quash a subpoena from Ronald Ferguson, former chief executive officer of General Reinsurance Corp. Ferguson, 65, wanted records of communications between Buffett and two top General Re executives to help support his claim that Buffett approved sham reinsurance contracts that helped American International Group Inc. inflate reserves by $500 million.

Ferguson and four others face criminal charges of conspiracy, securities and mail fraud, as well as making false statements. Defense lawyers subpoenaed Omaha, Nebraska-based Berkshire and Stamford, Connecticut-based General Re for copies of all written communications between Buffett and current General Re CEO Joseph Brandon and President Franklin ``Tad'' Montross for the year 2000.

Ferguson sought the records to show that the other two men had such frequent contact with Buffett that Ferguson wouldn't have lied when he sent an e-mail to Brandon and Montross on Nov. 6, 2000, indicating Buffett had approved the AIG transaction.

Buffett, 77, has denied knowledge of improper dealings. He didn't immediately respond to a request for comment today through Berkshire spokeswoman Jackie Wilson. A call to Ferguson's attorney Douglas Koff at Cadwalader Wickersham & Taft in New York, wasn't immediately returned.

Request Rebuffed

Judge Droney ruled that the requested records weren't ``probative of whether Ferguson misrepresented Buffett's approval'' of the deal to Brandon and Montross. Any direct communications between Buffett, Brandon and Montross regarding Buffett's approval of the AIG deal would already be in Ferguson's hands, because General Re previously turned over all written communications regarding the transaction, Droney said.

Last month, in a win for Ferguson, Droney ruled that Berkshire and General Re must provide the court with records from interviews with former and current employees during the companies' internal investigations. If those individuals give testimony at trial contradicting their earlier statements, the relevant documents may be given to the defense, according to Droney's ruling, filed Dec. 20.

Droney also ruled today on subpoenas the defense issued to Verizon New York Inc. and Verizon Wireless Inc. seeking telephone records for numbers used by himself and other General Re executives. General Re opposed the subpoenas, and Droney ordered them enforced for the period from Oct. 1, 2000, through May 31, 2001.

Other Defendants

The other defendants are former General Re Chief Financial Officer Elizabeth Monrad, 53; Christopher Garand, 60, a former senior vice president; Robert Graham, 59, former assistant general counsel; and Christian Milton, 60, the former head of reinsurance at New York-based AIG, the world's largest insurer.

The case is U.S. v. Ferguson, 06-cr-137, U.S. District Court, District of Connecticut (Hartford).