That disappoints people who hope the world-renowned Omaha investor would flex Berkshire Hathaway Inc.'s financial muscle with China to curb alleged atrocities in Sudan's Darfur region.

"I can be a direct descendant of William Jennings Bryan, but I will not be changing the Chinese government's policy," Buffett told The World-Herald in an interview last week. "I doubt I could change the policies of the Douglas County Board."

Berkshire's holds a 1.3 percent ownership of China's main domestic oil company, PetroChina. PetroChina is owned by China National Petroleum Corp., which in turn is 100 percent owned by the Chinese government. China National Petroleum Corp. owns 40 percent of a major oil operation in Sudan, which makes money for Sudan's government.

China formed PetroChina as a separate corporation to raise money from western investors like Berkshire, which paid $488 million for PetroChina stock now worth $3.3 billion. Berkshire is the largest foreign owner of the stock.

Despite his own views, Buffett will allow Berkshire shareholders to debate and vote on the issue at their May 5 annual meeting.

One of the groups pushing for action by Buffett is Fidelity Out of Sudan, whose goal, so far unmet, initially was to convince Fidelity Financial to sell its PetroChina shares.

The group, based in Boston, has seven active volunteer members and no employees or budget. It cooperates with a half-dozen Darfur-related groups, some with paid staffs. One of them, the nonprofit Genocide Intervention Network of Washington, D.C., reported its goal for 2006 was to raise $700,000 and create a 5,000-person "constituency" to help people in Darfur.

Among their goals, the groups believe western corporations with investments in China could exert economic pressure so that the Chinese government would allow United Nations sanctions that would curb violence in Sudan.

Buffett calls the situation in Darfur "deplorable" and said he sympathizes with the groups' intentions and efforts to publicize the issue.

"They're decent people, they're well-meaning," he said. "But they're on the wrong area in terms of actually getting anything done."

Even PetroChina itself couldn't influence the policies of the Chinese government, just like Nebraska Furniture Mart doesn't dictate policy to Berkshire, its parent company, Buffett said. "Those (Chinese) companies don't tell their government what to do."

The chairman of the Boston group is Eric Cohen, a retired information technology executive in Lexington, Mass.

"The Chinese do not have an interest in having the civilians in Darfur to be murdered," he said. "They're just trying to do business. They would like no problems to get in their way.

"If China decided to have a talk with the president of Sudan, to say that there is a problem starting to embarrass us and interfere with business and we want you to back off, it would be economic pressure. . . . That does have an impact."

Seven states and a dozen financial groups, including investment managers at Harvard and Yale Universities, have adopted policies to sell stock of PetroChina and companies that operate in Sudan.

Since 1997 the United States has forbade trade with Sudan, blocked its U.S. assets, worked toward U.N. Security Council actions against those responsible for genocide there and supported peacekeeping efforts.

Buffett said the United States disagrees with many other governments but still allows trade with them. "How much impact do we have on their domestic policies? Not much."

China's holdings in Sudan are physical assets that it can't remove, even if it wanted to "punish" Sudan, Buffett said.

Years ago, he said, a Berkshire subsidiary helped develop oil resources in Siberia and ended up losing money when the Soviet Union simply took over that property. "Essentially we were forced to leave, but we couldn't take any of it with us."

In Sudan's case, he said, Sudan likely would acquire China's holdings at a bargain price and make more money off the oil, thus improving its finances.

Cohen said China would never consider actually pulling out of Sudan but could influence Sudan's conduct.

He said he appreciates the upcoming discussion at the Berkshire meeting, even though the proposed resolution on the issue likely will fail. "I'd like to think there's some enlightenment."

Susan Morgan, a communications consultant from Wellesley, Mass., and a volunteer with the Boston group, said she sold her 12 shares of Class B Berkshire stock recently after learning of its PetroChina investment.

Stockholder actions sometimes can have the opposite effect from what's intended, Buffett said. When PetroChina sold stock in 2000 to raise money, opponents declared success when they reduced the sale's proceeds from an expected $4 billion to $2.89 billion. But China removed some assets from PetroChina to fit the smaller stock sale, and now those assets are worth seven times as much - a financial gain for China's government, Buffett said.

The discussion on the Darfur issue will occur during the business segment, starting around 3:15 p.m., of Berkshire's annual meeting May 5 at the Qwest Center Omaha.

The proposed resolution says Berkshire "shall not" invest in foreign corporations that "engage in activities that would be prohibited for U.S. corporations by executive order of the president of the United States."

Said Buffett, "We're going to have all the time people want, basically, and a really full discussion. Even if people don't own stock, I don't mind them speaking up on the subject.

"I really felt that some shareholders are interested in it, and the ones that are interested should have a chance to speak their views. I hope a couple thousand people stick around for the meeting."

Many Berkshire shareholders typically leave the arena before the official part of the meeting starts. "It won't be a captive audience," Buffett said.
 
 
 
 

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