DON KEOUGH, MEL GIBSON, AND THE BUFFETT GANG
By Jeff Cunningham
Some people leave a hole. Don Keough leaves a crater.
I’ll get to the Mel Gibson part shortly.
Donald Raymond Keough was born on Sept. 4, 1926, in Maurice, Iowa. His father was a farmer and cattleman who sank most of his money into the swamp known as the Great Depression. Let’s say that Don made up for it.
His legendary career emerged from humble roots followed by a stint in the US Navy, and eventually the presidency of Coca Cola and the chairmanship of Allen & Co, the venerable investment bank whose Sun Valley conferences are legendary for drawing together the who’s who.
I had a ringside seat where I got to hear Don’s business philosophy at a Fortune Magazine conference for board directors, just after the Enron implosion.
Board service was an unparalleled pleasure for Don: he loved the give and take of business, telling anecdotes and the loyal friendships that came with the territory. The parting words as he left the Fortune conference were: the chief financial officer of a company is there to guard the storehouse, not be a profit center. He held up a dollar bill and said, “When I was an officer of a corporation, the CFO would be the one to check the bills weren’t counterfeit, today they are told ‘go find us another penny per share’.”
Another fact about Don’s service to boards. He didn’t care much about the compensation, just the intellectual value and the relationships. Even at Allen & Co, he took no salary for his work as chairman. He was happy just to invest in deals with his own capital.
Don could have served on any board. But during his long career he only joined Berkshire Hathaway, The Washington Post and three others. But clearly his favorite was Warren Buffett’s company. When I went to talk to him about a deal in his office one time, he told this story:
Don Keough lived not far from Buffett in Omaha during the 1960's at the time Buffett was raising the fund that would one day become Berkshire Hathaway. Keough was a salesman for Butternut Coffee (which after several changes was acquired by Coca Cola). Warren wasn’t quite as rich then and looked to tap his neighbor for $10,000 towards his new private placement vehicle.
Keough’s children were playmates of the Buffett gang, and in an inspired stroke of due diligence, Keough asked them what they thought of Mr. Buffett. The Keough children all responded that Mr. Buffett was a swell fellow, and that he stayed home all day and would often have time to play with them. That was enough for Don to keep his wallet in his pocket, and he politely turned down Warren’s request.
Years later, Don’s punch line was that the investment today would be worth over $100 million. Then he would look around, “if any of you know Warren, tell him I’m willing to take the bet now.”
Another thing about Don was the twinkle in his eye which some chalk up to Irish charm, but frankly, he could have been Greek, Armenian, or Czechoslovakian. Ethnicity wasn’t the issue. Don simply adored people and they returned the favor in spades. You would see him at a cocktail party or board meeting, and he would walk over to someone, whisper in their ear, while putting his great big paw on your forearm and his other arm around your shoulder. His was a visceral affection, and you knew when he was honing in on you, you were his. Whatever favor he was going to ask, the answer was “I’m in.”
I met Don at a celebration of the Irish American 100, a group of New York based Irishmen and women who had climbed the corporate ladder. Don, naturally, was the Irish American of the Year. After the ceremony, I went up to him to chat and confessed that I was actually Scottish not Irish. Don’s response was, “You are on this team even if you aren’t wearing the uniform.” So Don Keough made me an honorary Irishman.
Two years later, I was sitting in my office at Forbes Magazine where I had become publisher, and Don called asking if I would join him on a trip to Ireland to help spread the word about the Irish miracle.
On our visit we met Albert Reynolds, the Taoiseach, or prime minister. We toured factories each day and had sumptuous Irish dinners at night. Don would go around the table asking us to tell our stories. No one wanted to compete with Don as a raconteur as he could read the Yellow Pages and it make it funny. He had a storehouse of anecdotes which could be summoned at will. Entering a story telling contest against Don Keough would be like a rookie landing in the Stardust casino at the Texas Hold ‘Em championships.
On our final day in Ireland, we ventured off to visit the set of Braveheart. Once we got there, Mel Gibson greeted us and proceeded to give the group a tour of the set and introduce us to the cast, chatting all the while about his first major directorial debut (as well as lead actor). To this day I don’t know if Mel is just charming or if he was asked to be particularly nice, or if he just knew that Don would put that bear hug on him. By the end of the day we had also met Patrick McGoohan, Brendan Gleeson, and others. Don never told us whether the Irish handlers had arranged this or whether he used his Hollywood contacts. He was a big star himself, he just didn’t shine it in your eyes.
Don wrote a book of recollections in 2004 in which he said, “I never changed businesses. I started in 1950… I jumped into a little creek, which became a river, which turned into a gulf, which grew into an ocean. All I ever did was swim.”
Warren Buffett issued a statement which speaks for all who knew Don: “You can sum up Don Keough’s life in three words: Everybody loved him.”