Billionaire hypocrisy has been in the news of late and it turns out the world’s ultra-rich don’t always practice what they preach. Take George Soros for instance, who publicly states that the wealthy should pay more taxes in order to promote a more stable society via the equitable distribution of wealth but who has for years used a tax loophole [6] that allows him to avoid paying taxes on management fees, a practice that Bloomberg says has magnified his AUM exponentially and may ultimately mean Soros owes more than $6 billion in back taxes.
Then there’s Warren Buffett, the affable Omaha octogenarian whose railroad holdings and close ties with the President make the White House’s position on the Keystone Pipeline seem rather convenient [7], and who Dan Loeb recently blasted [8] for being a habitual hypocrite on everything from taxes to hedge funds. As a reminder, here’s what Loeb said at the SALT conference earlier this month:
“I love reading Warren Buffett’s letters and I love contrasting his words with his actions. I love how he criticizes hedge funds, yet he had the first hedge fund,” Mr. Loeb said. “He criticizes activists, he was the first activist. He criticizes financial services companies, yet he loves to invest in them. He thinks that we should all pay taxes, yet he avoids them himself.”
Today, we get another example of what appears to be egregious Buffett belief bifurcation, this time in the form of green energy policy because as Bloomberg reports [9], when it comes to saving the environment, it’s a great idea — unless it eats into profit margins. Here’s more:
Warren Buffett highlights how his Berkshire Hathaway Inc. utilities make massive investments in renewable energy. Meanwhile, in Nevada, the company is fighting a plan that would encourage more residents to use green power.
Berkshire’s NV Energy, the state’s dominant utility, opposes the proposal to increase a cap on the amount of energy that can be generated with solar panels by residents who sell power back to the grid in a practice known as net metering.
While the billionaire’s famed holding company has reaped tax credits from investing in wind farms and solar arrays, net metering is often seen by utilities as a threat. Buffett wants his managers to protect competitive advantages, said Jeff Matthews, an investor and author of books about Berkshire…
In an April presentation to investors, NV Energy laid out its strategy for addressing the growth of home solar. The utility said it would “lobby to hold the subsidized net-metering cap at current 3 percent of peak demand"...
Sellers of rooftop-solar panels are pushing Nevada legislators to raise the cap, and one plan called for the ceiling to be lifted to 10 percent. Nevada State Senator Patricia Farleysaid she is proposing that Nevada’s utility regulator study the issue before lawmakers act.
“Across the country the utility industry is pressuring regulators and elected officials to limit solar energy’s growth, and the same thing is happening in Nevada,” said Gabe Elsner, executive director of the Energy & Policy Institute, a Washington, D.C.-based clean energy think tank. “NV Energy is trying to protect their monopoly by squashing competitors.”
That’s a pretty unequivocal assessment and it also comes as no surprise that NV’s Energy lobbyist advised Nevada Governor Brian Sandova on two campaigns:
The Republican governor is “a confidant of the big lobbyist on this,” said Bryan Miller, vice president of public policy and power markets at Sunrun, a San Francisco-based solar-leasing company. “Berkshire and the governor could not be closer.”
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The bottom line: it’s all about the bottom line for Buffett.
“It always comes down to money,” Matthews says.
