June 1, 2006
Warren Buffett’s Jewish Connection
Warren Buffett is not a Jew; in fact, he describes himself as an agnostic.
Still, the billionaire investment guru, who made big news in May when his Berkshire Hathaway corporation bought an 80 percent share in the Israeli metalworks conglomerate, Iscar, for $4 billion, for years has been making his mark on the U.S. Jewish community back home -- although sometimes in a roundabout way.
"Proportionally, if you look at the number of Jews in this country and in the world, I'm associated with a hugely disproportionate number," said Buffett, the second-richest man in the world. His life, he added, "has been blessed by friendship with many Jews."
The Israeli government stands to reap about $1 billion in taxes on Buffett's purchase of Iscar. Shortly after announcing the deal, Buffett said he was surprised to learn that a Berkshire subsidiary, CTB International, was purchasing a controlling interest in another Israeli company, AgroLogic.
In Israel -- which Buffett plans to visit in the fall -- the hope is that the deals will have longer legs: Buffett himself has not ruled out future purchases there and, considering his status as a leading investor, observers say others also may take a look at Israeli companies now that Buffett has done so.
"You won't find in the world a better-run operation than Iscar," Buffett says. "I don't think it's an accident that it's run by Israelis."
Among the first companies Buffett acquired after launching Berkshire Hathaway, the Omaha-based investment and insurance giant, was The Sun Newspapers of Omaha, then owned by Stan Lipsey, one-time chairman of The Jewish Press, Omaha's Jewish newspaper.
"At the time, the Omaha Club did not take Jewish members, and the Highland Country Club, a golf club, didn't have any [non-Jewish] members," Lipsey recalled. "Warren volunteered to join the Highland" -- rather than the Omaha -- "to set an example of nondiscrimination."
Buffett happily recalls the fallout from his application.
"It created this big rhubarb," he said. "All of the rabbis appeared on my behalf, the [Anti-Defamation League] guy appeared on my behalf. Finally they voted to let me in."
But that wasn't the end of the story, Buffett said. The Highland had a rule requiring members to donate a certain amount of money to their synagogues. Buffett, of course, wasn't a synagogue member, so the club changed its policy: Members now would be expected to give to their synagogues, temples or churches.
But that still didn't quite work, Buffett recalls with a laugh, because of his agnosticism.
In the end, the rule was amended to ask simply that members make some sort of charitable donation, and the path to Buffet's membership was clear.
"He's an incredible guy," said Lipsey, today the publisher of the Buffalo News. In 1973, The Sun won a Pulitzer Prize in local investigative specialized reporting for an expose on financial impropriety at Boys Town, Neb.
"Warren came up with the key source for us knowing what was going on out there," Lipsey said.
Buffett himself researched Boys Town's stocks to bolster the story, Lipsey added.
In the 1960s, Omaha Rabbi Myer Kripke decided to invest in his friend Buffett's new business venture. Their wives had become friendly, he said, and the foursome enjoyed playing the occasional game of bridge together.
"My wife had no card sense and I was certainly no competition to Warren, who is a very good bridge player and a lover of the game," said Kripke, rabbi emeritus of Omaha's Conservative Beth El Synagogue. "He's very bright and very personable and very decent. He is a rich man who is as clean as can be."
Kripke, father of the noted philosopher Saul Kripke, bought a few shares in Berkshire Hathaway and quickly sold them, doubling his money, he said.
Recognizing a good thing when he saw it, he bought a bunch more shares in his friend's company, shares that by the 1990s had made Kripke -- who says he never earned more than $30,000 a year as a rabbi -- a millionaire.
Asked if he credits Buffett with his financial success, he didn't hesitate.
"Entirely, yes," he said. "I never had much of an income."
The Sun newspaper group was not Buffett's only early purchase of a Jewish-owned company. In 1983, sealing the deal with a handshake, Buffett bought 90 percent of the Nebraska Furniture Mart from Rose Blumkin, a Russian-born Jew who moved to the United States in 1917.
In 1989, he purchased a majority of the stock in Borsheim's Fine Jewelry and Gifts, a phenomenally successful jewelry store, from the Friedman family.
"He has many friends in the Jewish community," said Forrest Krutter, secretary of Berkshire Hathaway and a former president of the Jewish Federation of Omaha.
Buffett's former son-in-law, Allen Greenberg, is a Jew, and now runs the Buffett Foundation, much of whose work has dealt with reproductive rights and family-planning issues. Buffett's personal assistant is Ian Jacobs, who goes by his Hebrew name, Shami.
Buffett himself counts the late Nebraska businessman Howard "Micky" Newman and philanthropist Jack Skirball as among his "very closest friends."
Further, Buffett said his "hero and the man who made me an investment success" was Ben Graham. Graham, along with Newman's father, Jerry, ran a New York fund called Graham-Newman Corp.
"After besieging Ben for the three years after I received my degree from Columbia, Ben and Jerry finally hired me," Buffett said. "I was the first gentile ever employed by the firm -- including secretaries -- in its 18 years of existence. My first son bears the middle name Graham after Ben."
Buffett "is very much honored in the Jewish community," Kripke said.