New rule: When the media reports on a screwup at Berkshire Hathaway, it can no longer call it a "rare mark" on Warren Buffett's sterling reputation. After all, the word "rare" should be used only to describe events that occur at fairly lengthy intervals, like solar eclipses. But Buffett has been mucking up his image with surprising regularity these days, whether he's haughtily defending the credit agency Moody's for its role in the financial crisis; profiting from derivatives after famously terming them "financial weapons of mass destruction"; or allowing General Re to engage in sham transactions with now-notorious AIG.
Despite all this, the media for the most part was shocked -- shocked! -- to learn that one of Buffett's top lieutenants, David Sokol, had resigned under a cloud of suspicion over the timing of his trades in Lubrizol, a company Berkshire has recently agreed to buy. Not only did outlets including the New York Times and the Associated Press feel compelled to note how "rare" it is for the Sage of Omaha to be involved in -- quelle horreur! -- a potential scandal, but most of the media, at least initially, focused less on Sokol's and Buffett's behavior and more on the comparatively benign issue of what it would all mean for succession at Berkshire Hathaway.
A snoozefest, to be sure, but convenient for Buffett, who had informed the media, via a press release-letter -- how folksy! -- that he would not be answering any further questions on the Lubrizol matter.
Of course, the coverage did become more biting as days moved on and opinionators, including the Times' Joe Nocera and the Wall Street Journal's James B. Stewart, began to observe there was something rotten, or at least smelly, in Omaha. The Harvard Business Review chided Buffett for not calling Sokol's actions "unethical," and corporate governance experts wrung their hands over Berkshire's lax internal controls. But the coverage remained relatively tame, especially compared with how the media has treated other finance types caught in potential insider trading scandals, no matter how flimsy the evidence. In 2006, the Times blithely fingered then-Morgan Stanley CEO John Mack as a co-conspirator in one such scandal without providing a shred of proof. And the paper did it on its front page no less -- a news placement that Buffett and Sokol, at least in the Times, happily avoided.
To really understand the special treatment Buffett is receiving, imagine what the coverage would look like if the exact facts of the Buffett-Sokol-Lubrizol situation were playing out at another company -- say, oh, I don't know, Blackstone Group. Not only would the media be calling for Steve Schwarzman's head, but accusations of greed, avarice, stone crab lunches, criminality and general odiousness would be flying. Amazingly, the media never accuses Buffett of anything so crass as greed, even when he's profiting from and defending bubble-era conspirators such as Moody's and Goldman, Sachs & Co. As hedge funder Michael Steinhardt told CNBC after the Sokol news broke, "[Buffett] is the greatest PR person of recent times. He has managed to achieve a snow job that has conned virtually everyone in the press, to my knowledge, and it is remarkable that he continues to do it."
Indeed, Buffett demonstrated his PR prowess early on in the Sokol affair when it was Sokol, not Buffett, who sat down with CNBC's Becky Quick to try to explain what had happened. Though Quick is a frequent Buffett interviewer -- she recently accompanied him on a trip to Asia -- she didn't get access to Buffett this time, as he probably realized what a PR folly that could be. Better to send a lawyerless Sokol to take the fall instead.
How long Buffett can keep his one-man PR machine going remains to be seen. But it's likely to be answered at the Berkshire annual meeting on April 30 when once again, Quick, the Times' Andrew Ross Sorkin and Fortune's Carol Loomis have been handpicked by Buffett to ask the questions, gleaned, in part, from thousands that have been e-mailed directly to them by the great unwashed. Of course, Buffett has already stated that he has nothing more to say about Sokol and Lubrizol, which leaves the journalists in a tough position. Here's a suggestion for them: Unless Buffett starts providing some answers on Lubrizol (not to mention sidekick Charlie Munger's stake in China's electric carmaker BYD), they should refuse to play their parts as the interlocutors of the Berkshire jamboree. After all, Saint Warren is exceptional no longer. And the media needs to stop treating him as if he is.
Yvette Kantrow is executive editor of The Deal magazine.