Prosecutors Allegedly Pressing Berkshire to Remove Gen Re Head

April 11, 2008

Federal prosecutors want Berkshire Hathaway Inc. to replace the chief executive of its reinsurance subsidiary after four former executives of the company were convicted in February, according to a person familiar with the negotiations.

Prosecutors and Berkshire Hathaway attorneys on Thursday discussed the possible removal of Joseph P. Brandon as CEO of General Re Corp. as a way to end the investigation into the company, according to a person familiar with the talks, who asked not to be named because the issue is unresolved.

Prosecutors declined to comment about the negotiations, which were reported Monday by the Wall Street Journal. Berkshire Hathaway spokeswoman Jackie Wilson said Monday there was no one available to comment. A message also was left with Brandon, who has not been charged with any wrongdoing.

A Connecticut jury found four former executives of General Re Corp. and a former executive of American International Group guilty of a scheme to manipulate the financial statements of AIG, the world’s largest insurance company.

Brandon’s name surfaced during the trial when a postal inspector testified that one of the defendants said he told former AIG CEO Maurice “Hank” Greenberg that Brandon and billionaire Warren Buffett wanted the defendant to be involved in the deal.

Buffett, Berkshire’s chairman and CEO, also is not accused of wrongdoing. Berkshire owns furniture, insurance, jewelry and candy companies, restaurants, natural gas and corporate jet firms and has major investments in such companies as The Coca-Cola Co. and Anheuser-Busch Cos.

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