WARREN BUFFET and STEROIDS?

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<TABLE cellSpacing=0 cellPadding=2 width="100%" bgColor=white border=0 xmlns:js="http://cbs.markewatch.com/xsl" xmlns:msxsl="urn:schemas-microsoft-com:xslt"><TBODY><TR><TD width="100%">Are we going to have to put an asterisk next to Warren Buffett's name in the investment hall of fame?

Now that the legendary investor has been dubbed a person of interest in the American International Group (AIG: news, chart, profile) scandal, which brought down insurance kingpin Maurice "Hank" Greenberg this week, the press has taken to the story like Sammy Sosa to a corked bat.

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</TD></TR></TBODY></TABLE>While all indications are that New York Attorney General Eliot Spitzer and the Securities and Exchange Commission only see Buffett as a witness in their case and not a target, just the hint of impropriety attached to his name has knocked Wall Street off its already shaky axis.

This is the Oracle of Omaha after all. A $44 billion man; investor in such home run companies as Coca-Cola Co. (KO: news, chart, profile) , and Gillette Co. (G: news, chart, profile) ; savior of Salomon Brothers in the late 1980s; and economic adviser to princes, presidents and California Gov. Arnold Schwarzenegger.

Writer of the only annual report in corporate America that investors ever read; main attraction at the annual spring pilgrimage by investors to Nebraska for his views on corporate governance; and finally, purveyor of that legendary "homespun" wisdom, not to be confused with wisdom spun at the office, or at the bar after work.

Now Buffett, his amazing performance record, and his insurance empire stand tainted by allegations that a $500 million deal they did with Greenberg and AIG in 2000 and 2001 might not have been above board. Greenberg is suspected of having used portfolio enhancing strategies, the steroids of Wall Street, which have already brought down the likes of Enron, Worldcom, and Adelphia.

Buffett's company, Berkshire Hathaway (BRKA: news, chart, profile) , issued a rare press release Tuesday proclaiming that the 74-year-old investor was not briefed on the details of how the transaction between AIG and Berkshire's General Re reinsurance business was structured.

Investigators are trying to establish whether it was just a risk-free way for AIG to book some extra reserves at a time when it needed to increase its reserves, a loan if you will. AIG admitted Wednesday that some of its dealings were "improper" and accounted for incorrectly, including the General Re deal. See full story.

Buffett is scheduled to sit down with the SEC and with Spitzer and Co. on April 11. Here's a tip from Mark McGwire, Oracle. Don't begin by saying you're not there to talk about the past. And don't rant and rave to the cameras outside like Barry Bonds that you're tired and you may never return, etc.

As far as I can tell, you're the only major player on Wall Street who hasn't been investigated yet in the analyst/mutual funds/IPO/insurance scandals. So it was only a matter of time before Spitzer's publicity machine rolled into Omaha.

Don't listen to the mindless speculation that this could indelibly stain your otherwise spotless career, dragging you down at the end like Dan Rather, a victim of fools and knaves. Even the idea of an asterisk on your record is too much, judging by your conduct over the decades and the wealth you're created for your shareholders.

Like baseball's steroids scandal, this has devolved into nothing more than a regulatory witch hunt. It will end up taking down some of Wall Street's biggest powers -- like Greenberg. But for the rest of the players and the fans, the game will go on and new performance records will continue to be set.

Come Opening Day for you, on April 30, when you host the Berkshire annual meeting in Omaha, you will inevitably have to field questions from the press about your role in the scandal. Don't channel Martha Stewart. Handle them with your usual aplomb.

Your shareholders and followers will be there for the same reason they are every year: to learn how to swing for the fences.

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David Callaway is editor-in-chief of MarketWatch</TD></TR></TBODY></TABLE>
 

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