Warren Buffett’s Recent $2.9 Billion Donation to Charity Is a Slap in the Face to Asbestos Victims

by Sokolove Law

Warren Buffett, famed investor at Berkshire Hathaway Inc. and the world’s 3rd wealthiest person, just donated $2.9 Billion of his wealth to charity — sounds great, right? Buffett’s donation money is intended to benefit 5 charities: The Bill and Melinda Gates Foundation, along with 4 others that each have links to the Buffett family.

But don’t be fooled by this “display” of kindness. Warren Buffett, and Berkshire Hathaway, have a long and corrupt history of making money off of asbestos victims. This latest public relations ploy is just that — a ploy.

What Exactly Does $2.9 Billion Mean to a Billionaire?

Warren Buffet is worth at least $63.3 Billion. This amount is more than the combined GDP of Ghana and Cambodia.

Much more concerning than this, however, is the reality that Berkshire Hathaway is both one of the largest corporations in the world and one of the least transparent. Jim Shanahan, who works at the investment bank Edward Jones, remarks that one “cannot see into the actual economics” of Berkshire Hathaway, adding that the corporation falls “well short of the disclosure we’ve come to expect of other financial services companies, particularly in the insurance space.”

Given the sentiment that Jones communicates (and that many echo), it’s no wonder that Transparency International, a global watchdog group, gave Berkshire Hathaway a 35 out of 100 — one of the lowest scores in its annual report last November (just above 4 Chinese banks and Russia’s Sberbank).

Understanding How Asbestos Victims’ Rights Are “Bought and Sold”

As we reported earlier in the year, Warren Buffett and Berkshire Hathaway are literally gambling — and winning — on asbestos victims’ rights. This is how it works: in a high-stakes bet against victims and their attorneys, Berkshire Hathaway buys asbestos reinsurance policies from business such as Liberty Mutual, AIG, CNA, and Lloyd’s of London.

How exactly does this affect asbestos victims? For the answer, one must first consider an example of this type of transaction. In 2011, Berkshire Hathaway agreed to take on $3.5 Billion in potential asbestos liabilities from American International Group, Inc. in exchange for roughly $1.65 Billion. This means that Berkshire Hathaway “bought” a $3.5 Billion potential deficit for $1.65 Billion. Why would anyone in their right mind do this?

Berkshire Hathaway invests the money acquired from these newly absorbed (but not yet paid out) policies, and in turn, generates a profit. But, you might ask, what happens when these policies are eventually awarded to asbestos victims? Wouldn’t Berkshire Hathaway lose a lot of money?

No. In fact, here is the sickening truth: all along, Berkshire Hathaway has bet on the fact that these policies — and the money that they contain — will never find their way into the rightful hands of asbestos victims. The corporation literally runs on, and thrives on, dirty money and corruption. For someone suffering from asbestos-caused mesothelioma or other asbestos-triggered disease, business transactions like these only add insult to injury.

What This Means for the Future of Asbestos Liability

In light of all this information, the recently donated $2.9 Billion begins to seem more like an insult — but, perhaps even more unfortunately, the most disturbing aspect of this entire issue is something not yet mentioned.

Through a series of complex financial transactions such as the one illustrated above, Berkshire Hathaway now contains the biggest concentration of legacy insurance liabilities in history. As such, something resembling more or less a monopoly has been created.

Considering the powerful and corrupt influence that corporations have on Congress and legislation, the idea that justice for asbestos victims is placed in the hands of 1 corrupt and secretive corporation is extremely frightening — especially when that corporation specifically relies on the avoidance of justice in order to turn a profit.

What can one do? Well, for starters, it’s important to not be impressed by Warren Buffett’s recent charitable donation. Let’s instead share the fact that Berkshire Hathaway, and Warren Buffett, are operating a business that literally runs on injustice.

Warren Buffett himself is famously quoted as having said: “It takes 20 years to build a reputation and 5 minutes to ruin it. If you think about that, you’ll do things differently.”

It seems he should learn how to take his own advice.

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