WASHINGTON -- Warren E. Buffett, the homespun billionaire on a mission to clean up Salomon Bros. Inc., bowed to the inevitable yesterday and said he welcomed the tighter controls Congress is aiming at the $2.3 trillion government securities ZTC market.
"I have no trouble with there being very tough penalties administered by very tough people . . . [against] anybody that fools around with the auction process," Mr. Buffett told the House finance and telecommunications subcommittee of the House Energy and Commerce Committee, which oversees the securities markets.
Mr. Buffett, the buy-and-hold investment guru from Omaha, Neb., who took over as Salomon's interim chairman last month, began his testimony at hearings on Salomon's bond-trading scandal by "apologizing for the acts that brought us here."
He said that "almost all" of Salomon's 9,000 employees regretted the firm's shady moves to exceed government trading limits, which led to the resignation of Chairman John H. Gutfreund and the suspension of several top executives.
Subcommittee members railed at Wall Street greed and promised to push through tougher oversight legislation, while at the same timetreating Mr. Buffett with respect bordering on worship.
Representative John D. Dingell, D-Mich., attributed the Salomon scandal to "wrongdoing, incompetence and bungling by greedy, avaricious and incompetent people." But even Mr. Dingell, chairman of the Energy and Commerce Committee and a man not known for being deferential, told Mr. Buffett: "It's a matter of some comfort to me that you're going to be in charge."
Mr. Buffett called Salomon's actions "inexcusable and inexplicable." He singled out for particular scorn Paul Mozer, the firm's chief trader in Treasury bonds, saying he "was not acting as a rational man at all."