NEW YORK, April 11 -- Billionaire investor Warren E. Buffett told state and federal investigators in an interview here Monday that he was briefed on a transaction between a unit of his Berkshire Hathaway Inc. holding company and insurance giant American International Group Inc., sources said.
But Buffett said he did not know much about the deal, which is being investigated, and did not press for details at the time it was executed, the sources said.
Warren E. Buffett makes his way past reporters as he leaves yesterday's meeting, during which he was questioned about a transaction between AIG and General Re Corp.
(Chip East -- Reuters)
Buffett acknowledged during the interview that in the current climate of intense regulatory scrutiny of corporate accounting he probably should have pressed harder for a precise description of the transaction, the sources said. The sources spoke on condition of anonymity because the insurance probe is ongoing and has reached a sensitive point.
Meanwhile on Monday, former AIG chairman and chief executive Maurice R. "Hank" Greenberg said through his lawyer that he plans to invoke his Fifth Amendment right against self-incrimination when he testifies in the probe on Tuesday.
Buffett made his comments in a three-hour interview with investigators from the Securities and Exchange Commission, New York Attorney General Eliot L. Spitzer's office, the Justice Department and the New York State Insurance Department.
Buffett, a major shareholder and director of The Washington Post Co., arrived for his testimony at the Woolworth Building in Lower Manhattan about 9 a.m. He entered through a side door, avoiding about two dozen TV cameramen and photographers, several of whom arrived at the building as early as 6 a.m. By mid-morning, financial news network CNBC had camera crews staked out at all of the building's entrances.
Buffett emerged about 2 p.m. and made only brief remarks before getting in a car and driving away. "I told them everything I know," he said, according to the Associated Press.
Investigators are looking into a series of complex reinsurance transactions, including one between General Re Corp., a Connecticut-based Berkshire subsidiary, and AIG. AIG acknowledged in a March 30 statement that its accounting for the General Re deal was improper.
Under terms of the arrangement, a General Re unit sent AIG $500 million in potential insurance liabilities and $500 million in premium revenue. AIG used the money to increase the cash it holds in reserve to pay claims, an amount some investors had criticized as too low, and added $500 million in revenue to its balance sheet.
The transaction was described as a reinsurance deal, a common transaction in which an insurer buys insurance to guard against potentially huge losses, such as from a class-action lawsuit or major accident.