CONTRARY TO HIS public assertions, Supreme Court nominee
Stephen G. Breyer will be unable to resign from his investment in
Lloyd's of London by the end of next year, a congressional opponent
said Tuesday. Some other Lloyd's investors agreed.
Sen. Richard G. Lugar, R-Ind., told reporters that Breyer would
continue to be liable for losses sustained by one of the Lloyd's
syndicates that insures companies against losses from environmental
cleanups. The extent of the syndicate's losses will be determined
largely by court rulings on environmental law, Lugar said.
"This is a gentleman who was either careless or injudicious in
the handling of his personal affairs," Lugar said. "It's not that
he made a bad investment, but that the nature of the investment is
inextricably involved in pollution and asbestos law and will
continue to be."
Lugar is the only senator to announce that he will vote against
Breyer when the Senate votes on the nomination this week. He said
"an increasing number" of senators had expressed concern to him,
although none has committed to joining his opposition.
"They're not necessarily convinced, but they're disturbed,"
The Lloyd's investments came up briefly in Breyer's three days
of testimony before the Senate Judiciary Committee, which
unanimously recommended last week that he be confirmed.
Breyer told the committee that he would immediately "ask the
people who handle my investments to divest any holdings in
insurance companies as soon as possible." He said he had resigned
as an investor in Lloyd's in 1988, although he could not quickly
extricate himself from the most controversial syndicate, "Merrett
418," the one that writes environmental insurance policies.
"I have been advised that I can leave altogether by the end of
1995, but I intend to ask the people involved to expedite my
complete termination of any Lloyd's relationship. I'll be out of
that as soon as I possibly can be," said Breyer, who is a federal
appeals judge in Boston.
Breyer's office referred reporters to the White House, which
did not return inquiries Tuesday. On Monday, it made public a
letter to Lloyd Cutler, the White House counsel, from Lloyd's of
London attorneys, saying that Lloyd's was forming NewCo, a
reinsurance company that would be established by the end of next
year to cover the syndicate's liabilities and take Breyer and other
investors off the hook.
Lugar and burned Lloyd's investors are skeptical about that
plan. They say that if the reinsurance company goes broke, Breyer
and others still will be liable for Lloyd's losses. …