The `Buffettgate' Scandal and U.S. Left `Movement': Part 6

By the time Omaha, Nebraska’s former right-wing GOP Congressman and early 1960s John Birch Society member Howard Homan Buffett died in 1964, his then-34-year-old son and business partner’s Buffett Partnership Ltd. [BPL] had begun using the $17.5 million [equal to around $157 million in 2022] in stock market speculation money it had pooled from all of BPL’s partners to purchase stock of American Express, Texas Gulf Producing and Pure Oil, between 1964 and 1966, in an apparently secretive way.

As Alice Schroeder’s The Snowball book noted, “during” former Rep. Buffett’s “last weeks,” his son, Warren Buffett “began to invest in American Express…to get as many shares as he could” and “two months after” former Rep. Buffett’s death, the NoVo Foundation co-president’s father “had put almost $3 million [equal to over $26 million in 2022] into the American Express stock” so that it was now his BPL “partnership’s largest investment.”

As the same book recalled:

"By November 1964, the partnership owned more than $4.3 million [equal to over $38 million in 2022] of American Express stock…Buffett…would keep buying into 1966 until he had spent $13 million [equal to over $116 million in 2022] on American Express…”

Also, according to The Snowball, by the end of 1965, Buffett Partnership Limited had accumulated $35 million [equal to around $300 million in 2022] in profits alone from its post-1964 speculation in American Express stock.

In the 1960s the American Express company, that the NoVo Foundation co-president’s father began owning, controlled 80 percent of the traveler’s check market; and it was still then profiting from using “the float” money that consumers paid for its traveler’s checks to also speculate on the stock market during the weeks or months between the time the consumers bought their traveler’s checks and the time the consumers cashed their checks—without paying the purchasers of the traveler’s checks any interest, in exchange for using their money as “float money” to profit from its stock market investing activity. In addition, in the 1960s American Express still also controlled a big share of the credit card market.

By the time over one-third of former Rep. Buffett’s son’s BPL portfolio was invested in American Express in 1966, an investment firm that had previously profited from underwriting municipal and government bonds, W.H. Morton & Co., was then purchased by American Express; two years before Warren Buffet’s American Express also later purchased one of the largest property and casualty insurance companies in the USA, Fireman’s Fund Insurance Co., in 1968—which by 1979 was insuring 70 percent of the movies made in the USA and accounting for about 50 percent of American Express’s total profits.

Not surprisingly, during the Vietnam War Era of the 1960s the BPL firm of the NoVo Foundation co-president’s father—“who placed a large portrait of” the NoVo Foundation’s grandfather “on the wall across from his desk” in his Omaha office, following former Rep. Buffett’s 1964 death, according to The Snowball book—was the largest single stockholder of American Express. And by October 1967, 40 percent of the BPL portfolio of the now-deceased former Rep. Buffett’s son—who was now personally worth $10 million [equal to around $83 million in 2022]—consisted of American Express stock.

At the same time the NoVo Foundation co-president’s father was pouring BPL capital into accumulating American Express stock, former Rep. Buffett’s son was also using part of BPL’s American Express profits to purchase enough Berkshire Hathaway stock to gain control over the textile manufacturing mills of the New Bedford, Massachusetts-based company.

And before becoming, in May 1965, board chairman of the Berkshire Hathaway company whose business was then employing 2,300 U.S. blue-collar workers to manufacture textile products within the USA, the NoVo Foundation co-president’s father “flew into New Bedford” and “vowed to the press that he would carry on business as usual,” according to the The Snowball book. In addition, Warren Buffett also “denied that mill closings would result from the takeover” of Berkshire Hathaway by his BPL stock speculation firm in 1965.

Yet in 1967, the Berkshire Hathaway textile industry firm of the NoVo Foundation co-president’s then-37-year-old father laid off 450 workers at its division in Rhode Island, despite the fact that Buffett Partners Limited was “swimming in sea of money” by that year, according to The Snowball, in part from its stockholdings in American Express; and in mid-1968 former Rep. Buffett’s son shut down the Apparel and BoxLoom division of the Berkshire Hathaway textile manufacturing firm.

By the 1980s, the NoVo Foundation co-president’s father had reduced the number of textile workers employed by his Berkshire Hathaway company from 2,300, when he became board chairman in 1965, to only 400 workers. According to The Snowball, “most” of Berkshire Hathaway’s remaining textile workers in the early 1980s “were of Portuguese descent” who spoke “limited English;” and “many” were “in their fifties or older” and “some” were “deaf from the roar of the” Berkshire Hathaway textile factory “machines.”

Yet when the then-55-year-old multi-millionaire Berkshire Hathaway owner Warren Buffett laid-off his 400 remaining textile blue-collar workers in 1985 and “the workers asked for severance above their contract guarantee,” but “only got a couple of month’s extra pay,” the NoVo Foundation’s co-president’s father refused to discuss their grievances about the lack of severance pay with them,” according to The Snowball.

Despite his 1965 denial that mill closings would result from his takeover of Berkshire Hathaway, American Express stockowner Warren Buffett had decided “to transform Berkshire from a…New England textile manufacturer into a media, insurance and industrial conglomerate,” according to Roger Lowenstein’s Buffett book.

As Roger Lowenstein’s Buffett book also recalled, “as Buffett plowed Berkshire’s capital into insurance, banking and publishing, he continued to siphon it out of textiles,” before dissolving his BPL stock speculation firm in 1970; and in the following decades the NoVo Foundation co-president’s father mainly used the transformed Berkshire Hathaway stock-holding company that he chaired (and individually owned between 29 and 36 percent of its stock in 1970) as his device to continue engaging in Wall Street stock market speculation activity.

In the 21st-century the Berkshire Hathaway textile factories in New England that NoVo Foundation Co-President Peter Buffett’s father owned and shut down have long been closed. But in 2021 the Berkshire Hathaway company—in which the “non-profit” Brooklyn and Kingston, NY-based NoVo Foundation that funds many U.S. left “movement” NGOs has owned a lot of stock of in recent years—still profits from owning a lot of American Express corporate stock.

As Theron Mohamed noted in an Oct. 20, 2021 Market Insider website article, between January and October 2021, Warren Buffett’s Berkshire Hathaway “made almost $9 billion on American Express,” during the second year of the continuing U.S. public health system crisis and American Express was now the third-largest holding in Berkshire's US stock portfolio; and in October 2021 Berkshire Hathaway “owned 152 million shares of the credit-card company at the last count, a position worth $27 billion."

And not surprisingly, as The Nation magazine noted in a Feb. 13, 2018 article, titled “Special Investigation: The Dirty Secret Behind Warren Buffett’s Billions,” by David Dayen, the father of the co-president of the NoVo Foundation that funds many U.S. left NGOS “has a hand in every major credit-card issuer: American Express, Visa, MasterCard, and Synchrony Financial, which provides private-label credit cards to retailers.” (end of part 6)