B000U5KFIC EBOK (29 page)

During the time the Belous case was pending before the California
Supreme Court, Munger and Buffett sponsored a "church" called the Ecumenical Fellowship that counseled women on family planning. The
church, run by a legitimate minister who got in trouble with his own denomination for his pro-abortion activities, sometimes helped women get
safe abortions outside the United States.

"Warren and I were revolutionaries," said Munger. "We created a
church that was used as an underground railroad. We supported the
Clergy Counseling Service. The minister running it was cashiered by his
own church for helping women get abortions. First I tried to persuade the
church to let him continue. That failed. I called Warren and asked him to
help me establish our own church. That we did. For years this minister
ran the thing. That was our contribution, trying to help so that society
didn't force women to give birth-to be held in a system Garrett Hardin
called `mandatory motherhood.'"

When the Belous case was heard before the California Supreme
Court, the outcome became uncertain when one of the justices had to recuse himself because the abortionist was his family doctor. But in September 1969, Belous won a landmark victory in which, for the first time
in U.S. history, an anti-abortion law was declared unconstitutional by a
major court. The replacement justice was the swing vote in a four-tothree decision. Not only has the decision been the legal precedent used in
California ever since, "It was the first chink in the armor of abortion restrictions," said Munger.

The impact of the case widened even more when two years after the
California decision, Belous was cited in the appellants' brief in Roe v.
Wade, in which the U.S. Supreme Court established "the fundamental
right of the woman to choose whether to bear children."'

"Charlie gives more than time," says Ron Olson. "He transforms the
charities."

Indeed, the court ruling was not the end of Munger's work. Following Belous, he was for many years a trustee and the chief financial officer
for Planned Parenthood of Los Angeles, which offered family planning
services and, when necessary, referred patients to clinics where abortions were available.

"We were way ahead of the national office of Planned Parenthood in
arranging abortions," said Munger. "The Planned Parenthood chapter in
Los Angeles wanted to get into that business, but didn't know how. We
merged our church, the Ecumenical Fellowship, headed by the same guy
who headed the Clergy Counseling Service, into the Los Angeles chapter
of Planned Parenthood."

When he joined the Planned Parenthood board, there was only one
major benefactor, Anna Bing Arnold, the widow of the wealthy real estate
developer Leo Bing. Despite her dedication, the organization was small
and thinly financed.

"We were chronically short of money," said Otis Booth, who served
on the board with Munger. The board expanded its contributor base, but as usual, with Charlie the organization took contrary positions. "There
was a controversy over national dues. We told them [national] no. `You're
not contributing anything useful to us, we're not paying the dues.' We finally rejoined the national organization."

Despite the pressure from protestors and sometimes frightening actions of anti-abortion activists, Munger's fervor on the subject of abortion
and population issues have not changed over the years.

Barry Munger recalled that at a party for Keith Russell, a well loved
Los Angeles obstetrician who had been Charlie's stalwart ally in the abortion rights struggle, a patient toasted Dr. Russell for all the babies he'd delivered. Charlie raised his glass and declared, "I want to toast Dr. Russell
for the thousands of babies he didn't deliver."'

In 1990, Munger fired off a stinging letter to Fortune, claiming that a
review of Paul and Anne Ehrlich's book, The Population Explosion, had
missed the point. The book reviewer, said Munger, "argues that human
welfare will continue to improve as a result of desirable population
growth accompanied by even faster technological development. Alas, it is
not so simple. In a finite world system, subject to the laws of physics, two
variables (population and per capita welfare) can't both be maximized
forever."

Munger said it was nonsensical to expect, as the reviewer had suggested, that some technology, now unknown, will step forward to solve
all the problems of pollution, erosion, and so forth: "No one contemplating the prospective environmental burden described by the Ehrlichs can
be confident that such a 'benign demographic transition' will occur or
that the population-growth-driven conditions won't be ghastly in 100
years or less. For one thing, the technological development that is necessary to permit a peacetime population increase will also make weapons
both more effective and more generally available in a more crowded
world."'

Buffett is just as solid in his view. In 1994, Buffett declared that the
world would have far fewer problems, "if you could make every child
born in this country and this world a wanted child ... the closest thing
we have to that is Planned Parenthood. Until women have that right
to determine their reproductive destiny, we're in an unequal society,"
Buffett said.`

If thou faint in the day of adversity, thy strength is small.

The Bible, Proverbs

HE MUNGER CHILDREN HAVE NEVER forgotten the summer of 1977 after
their father and his partner Warren Buffett bought the Buffalo Evening News. The youngsters scurried around their lakeside Minnesota cabin
collecting coins, then went with Charlie to the telephone booth at the marina across the lake to help him feed money into the pay phone as he and
Buffett plotted their strategy for the paper.

"The Buffalo Evening News was a big deal. In my mind a really big
deal," said Molly Munger.

Molly said that with the acquisition of a well-known eastern newspaper, she felt that Buffett and Munger had stepped up to a higher plain.
They were taking on a broader scope, moving away from small, regional
companies and going for more visible properties. It was the beginning of
a trend to buy companies with names that other people would recognize
when you tried to explain what your father did for a living.

The Buffalo Evening News was among the most impressive acquisitions made with Blue Chip Stamps' float account, and for a long time, it
was the most aggravating.

The Buffalo Evening News was established in 1880, and for years
was operated by a single family, the Butlers. After Kate Robinson Butler
died in 1974, the establishment-oriented Republican-leaning newspaper
was put up for sale by her estate. It wasn't until the first Saturday after
New Year's Day, 1977, that Buffett and Munger arrived in Weston,
Connecticut, to talk to Vincent Manno, a newspaper broker who was handling the deal. Buffett first offered $30 million for the paper, but his price was refused. He then raised the bid to $32 million. The offer was high,
considering that the Evening News had earned only $1.7 million pretax in
1976. However, the offer again was rejected. Buffett and Munger excused
themselves to confer. They returned with a price written on a sheet of yellow legal paper. The amount, $32.5 million, was accepted. It was a daring
move, since the acquisition price represented nearly 25 percent of the net
worth of Berkshire Hathaway at that time.

Once the price was settled, Buffett and Munger flew to western New
York to work out the details of the contract. They arrived there in the
middle of the worst snowstorm in Buffalo's history. For someone who had
become acclimated to California, Buffalo's severe winter climate may
have been a shock to Munger. In a letter to Katharine Graham, Charlie referred to Buffalo as "a town where the statue of George Washington wears
a Masonic apron, and the wind blows so hard that the mail in the chute
goes up and not down."

When touring the newspaper's relatively new offices and printing
plant Munger snapped, "Why does a newspaper need a palace to publish
in?" Buffett jokingly dubbed it the Taj Mahal.'

Munger, with his passion for good architecture, was repelled by
the design of the building's famous architect, who had impressed old
Mrs. Butler by driving the same model of Rolls Royce that she did. He put
in big balconies that were unusable in windy Buffalo and employed an
"artsy-craftsy" construction method that caused unfixable leaks-all at
great cost. This was not Charlie's concept of successful design.

But in the year 2000, the boxy cement-like building in the center of
Buffalo's aging downtown seems reasonably spacious, though austere. It
certainly is no more opulent than most other metropolitan daily newspaper facilities.

Like Graham's Washington Post, a newspaper in which Buffett had
made a major investment in 1973, the Buffalo Evening News proved to be
a difficult business proposition. In both situations, Munger and Buffett
proved that though they prided themselves on fair dealing, they also
could take tough positions and stick to them.

When Blue Chip bought the Buffalo Evening News, it had a solid
readership base in western New York, although Buffalo was gradually becoming a classic rust-belt city. The newspaper had several other problems. Like the Washington Post, the Evening News had several extremely
active unions. It also had a strong competitor in the Buffalo CourierExpress, a historic newspaper once edited by Mark Twain. Additionally,
the Evening News published no Sunday paper. Though the Evening News
outsold the Courier-Express four-to-one during the week, its lucrative
Sunday edition kept the Courier-Express in business.

The new owners knew that long term, only one newspaper could survive in Buffalo, and that their new property would either perish or stand
alone. The Buffalo Evening News plainly required a Sunday edition, hazards be damned. Immediately after Blue Chip bought the newspaper,
Buffett and Munger dropped the "Evening" from the newspaper's name
and started to publish on Sunday. At first the paper was given away to current subscribers and for racks and news stands, the price was only 30
cents a copy. The Courier-Express and other newspapers in western New
York charged 50 cents for their Sunday paper.

The special introductory offers to subscribers and advertisers
prompted the Courier to sue the News, claiming that it was violating
the Sherman Anti-trust Act. On November 9, 1977, a U.S. District judge
agreed that it might be the case and granted injunctive relief that stopped
short of spiking the new Sunday paper.

"They bought a lawsuit when they bought that paper," said Al
Marshall, "But I never did believe they could lose."

Munger knew a good buy when he saw it, and his keen sense of what
legal points could be lost or won served especially well when he and Buffett acquired the Buffalo Evening News. They knew full well that launching a Sunday newspaper would not be easy and in fact, might instigate an
old fashioned newspaper war.

Despite the best efforts of Munger and lawyers he recruited to help,
the injunction remained in place for two years. A Los Angeles friend of
Munger and Marshall, Ernest Zack, was hired to help with the legal battle
in Buffalo, which was so difficult and trying that Zack became exhausted.
When Zack got so weary or frustrated that he complained, Munger admonished him, "Oh, it's good for you."