Warren Buffett, Schwarzenegger and Sudan

Gov. Arnold Schwarzenegger signed legislation Monday requiring California to shed its pension investments with companies that do business with the murderous regime in Sudan, where genocide has claimed as many as 400,000 lives.

"We cannot watch from the sideline," he said, "and be content to mourn this atrocity as it passes into history. We must act, and we must act now.... It is an action that says we will not cooperate with them, with the horrors of Darfur."

Just a few hours before the choreographed event, Schwarzenegger attended a fund-raiser with his friend and economic advisor, Warren Buffett. The breakfast fund-raiser took place at the lavish Fairmont Hotel atop Nob Hill in San Francisco, at a cost of $25,000 a person.

What Schwarzenegger didn't mention was this: Buffett is the largest individual U.S. investor in a Chinese oil conglomerate that does business with the regime in Khartoum. Buffett's company, Berkshire Hathaway, holds 2.3 billion shares of PetroChina, or 1.3% of the foreign ownership of the oil company.

Anti-genocide activists who stood with Schwarzenegger on Monday were well aware of the unspoken connection, and the contradictions inherent in the governor's day.

Adam Sterling, national policy director for the Sudan Divestment Task Force, said the Republican governor should now turn his attention to pressuring Buffett, just as he is demanding the state's massive pension funds to sever their relationship with companies propping up the genocidal regime.

"It goes along with the action Arnold made at the press conference Monday that he should encourage his friend to take similar action," said Sterling, who appeared with the governor at the ceremony.

This week, Sterling said, he his stepping up his campaign to pressure Buffett to change his relationship with PetroChina. The campaign can be followed on this link. Sterling said he did not mention the Buffett-Sudan relationship to Schwarzenegger on Monday, out of respect for his signing the landmark divestment legislation.

But in a report entitled "Berkshire Hathaway, PetroChina and the Darfur Genocide," Sterling's group reported substantial links between Buffett's investments and the government in Sudan. The Chinese oil business in Sudan is being directed by the China National Petroleum Co., the parent company of PetroChina, and is feeding the oil revenues in Sudan and thus the military.

"CNPC's operations in Sudan have also paved the way for a hugely concerning arms trade between China and Sudan. For example, Sudanese government troops and militias have used Chinese-made helicopter gunships, based at CNPC airstrips in the country, to conduct raids on civilians."

Sterling said requiring Buffett to divest his entire PetroChina portfolio would be a drastic measure that would likely sink the stock. Rather, he said, Buffett should use his financial clout to make changes from within PetroChina. "No single individual will have more of a voice in that company," Sterling said. "It's definitely something China would listen to."

This is happening more and more. "We are beginning to see a number of leading companies take seriously the actions and concerns of US investors," said Adam Pener, chief operating officer of Conflict Securities Advisory Group, a Washington research firm that specializes in identifying companies with ties to terrorist-sponsoring states.

California's largest pension fund, CalPERS, has investments in 39 companies that do business in Sudan, but PetroChina is not listed as one of those companies. But if CalPERS did invest in the oil company, it undoubtedly would be required to shed its holdings under the new law, anti-genocide activists said.

Sterling said his group has tried to contact Berkshire Hathaway, but their calls have been ignored. A secretary for Buffett told The Times that the billionaire investor was traveling and unavailable.

As for Schwarzenegger, spokeswoman Margita Thompson said: "Gov. Schwarzenegger signed historic legislation this past Monday that sent a clear message around the world that California would stand against murder and genocide." She referred calls about Schwarzenegger and his relationship to Buffett on this issue to Berkshire Hathaway.

Schwarzenegger made Buffett co-chair of his California Economic Recovery Council during the 2003 recall, and he remains an advisor. During the recall, Buffett appeared with Schwarzenegger and former Secretary of State George P. Shultz, to promote his campaign. Shultz also showed up Monday to the divestment bill signing, along with actors George Clooney and Don Cheadle.

(Photos: John M. Heller / Getty Images; David McNew / Getty Images)