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Cabinet OKs Cat Fund Deal With Berkshire Hathaway

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By CATHERINE DOLINSKI

The Tampa Tribune

Published: July 30, 2008

TALLAHASSEE - Despite misgivings, members of the state Cabinet voted 2-1 to pay $224 million to financier Warren Buffett in exchange for his pledge to buy up to $4 billion worth of state bonds in the event of massive property damage this hurricane season.

Of the three Cabinet members voting to finalize the deal, which would shore up the state's Hurricane Catastrophe Fund, Attorney General Bill McCollum cast the lone opposition vote. McCollum repeated the assertion he'd made at the July 2 Cabinet meeting that the federal government would likely act as a "backstop" aid if the state's cat fund faced more losses from an enormous storm or series of storms than it could cover.

"I just don't think it's a good deal for the state," McCollum said of the offer from Buffett's company, Berkshire Hathaway, "I don't think the risk is worth it."

Chief Financial Officer Alex Sink had signaled Monday that she still had concerns about the deal, and asked Tuesday whether it still contained loopholes that would allow Berkshire Hathaway to back out. Bob Milligan, head of the State Board of Administration which oversees the cat fund, said the "outs" had essentially been removed.

Sink voted with Gov. Charlie Crist to seal the deal, subject to a few last minor tweaks by Milligan. The vote follows their preliminary approval of the deal on July 2.

Reporter Catherine Dolinski can be reached at or (850) 222-8382 or cdolinski

@tampatrib.com.

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