Walter Scott, Buffett’s friend and business partner, dies at 90

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Walter Scott Jr.
Walter Scott Jr.
Suzanne & Walter Scott Foundation

Walter Scott Jr., the Omaha businessman and philanthropist who made a fortune teaming up with his friend Warren Buffett to buy electric utilities, has died. He was 90.

The Suzanne and Walter Scott Foundation announced Scott died Saturday, without disclosing a cause of death. 

"It is with great sadness that we recognise the passing of our founder, Walter Scott, Jr," according to a statement on the Foundation's website. "We are blessed to have known and learned from Walter as we continue his philanthropic legacy."

While Buffett put Omaha on the map for investors, Scott was in many ways the city's leading patron. He parlayed the money he made in the construction, telecommunications and energy industries into civic amenities, including the zoo and the local campus of the University of Nebraska, which was named after him.

"You have to give something back to your community that will allow people in the future a better education, a better opportunity, a better start in life," Scott said in a 1997 interview for the Horatio Alger Association of Distinguished Americans. "Wherever we are today as a society is built upon the past experiences of people and what they did to create a better world."

Scott had a net worth of more than $6 billion (~R89.5 billion), according to the Bloomberg Billionaires Index. 

Walter Scott Jr. was born May 21, 1931, in Omaha, soon after the start of the Great Depression. Growing up, he worked on farms and ranches during the summers. Later, to save for college, he took a job as a gofer for Peter Kiewit Sons' Co., a construction firm, fetching supplies and food for the employees.

He continued to work there while he pursued a civil engineering degree at Colorado State University and, after graduating in 1953, joined full-time. After a brief stint in the US Air Force during the Korean War, Scott returned to Kiewit.

The timing was fortuitous. The US was in midst of a construction boom. Kiewit won contracts to help build swaths of the nation's highway system, dams and other public works. Scott moved his family around the country to work at project sites, steadily climbing the ranks of the closely held company. In 1979, he was named CEO.

During the following decades, Scott helped plow some of Kiewit's cash into a variety of other businesses, from coal mines to toll roads. Ultimately, the firm began to focus these other investments on the telecommunications industry. In 1998, Scott spun off many of Kiewit's non-construction businesses into a company called Level 3 Communications Inc., which operated a fiber-optic network that served as a backbone for the internet.

It was the kind of idea that captured investors' imaginations in the late 1990s bull market - a marriage of Kiewit's construction skill and the vast opportunities of the Information Age. After going public, Level 3 briefly attained a valuation of more than $40 billion. But during the dot-com bust in 2000, the shares tanked. They never fully recovered, in part because other companies had built competing networks and there was a glut of bandwidth.

Scott stuck with Level 3 as it posted years of losses, finally stepping down as chairperson in 2014. Two years later, CenturyLink Inc. agreed to buy the company, drawing to a close a rare chapter of Scott's business career that lost investors' money.

Friends since their teens

His experience with utilities went far more smoothly. In 1999, Scott approached Buffett about making an investment in MidAmerican Energy, a sleepy electric utility in Des Moines. The two businessmen had known one another since they were teenagers; the headquarters for Buffett's conglomerate, Berkshire Hathaway Inc., was in Kiewit Plaza, an office building in Omaha; and Scott had served on the board of Buffett's company since late 1980s. But the purchase of MidAmerican would deepen their ties.

"From the start, the idea of being in partnership with Walter struck me as a good one," Buffett wrote in a letter to shareholders in 2000.

Berkshire went on to bankroll a takeover of MidAmerican with Scott, and it eventually formed the foundation of a vast energy empire. With Buffett's backing, the company bought utilities in the US and Canada, snapped up natural gas pipelines and invested billions in wind and solar power. 

Toward the end of his life, Scott devoted more time to supporting a range of educational causes and Omaha charities. He outlined his thoughts on philanthropy in 2010 when he signed the Giving Pledge, an effort by Buffett and Microsoft Corp. co-founder Bill Gates to get the world's richest to donate the majority of their wealth.

One of his priorities, Scott explained in a letter about his decision, was to focus on youth.

"I have nothing against old people. I am one!" he wrote. "But I believe society will get the most bang-for-the-buck if I invest in things that help us produce educated and productive citisens."

Scott's first wife, Carolyn, died in 1983. His second wife, the former Suzanne Marshall, died in 2013.

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