John Edwards, the presidential candidate, has been outed by the Wall Street
Journal as the kind of investor in subprime real estate that he's been
blasting on the campaign trial.
It turns out that the hedge fund Mr. Edwards has a long and profitable
connection with - Fortress Investment Group - invests in the kind of
"shameful lending practices" that Candidate Edwards denounced when he kicked
off his presidential campaign in New Orleans' Ninth Ward last December.
The very model of the populist orator, Candidate Edwards took out after
those nasty subprime lenders who've been foreclosing on poor folks in
Katrina's wake. The candidate felt no need to go into detail - and mention
that his hedge fund's lending unit was doing just that.
One of Fortress' subsidiaries was trying to hold a 67-year-old New Orleans
resident in default on her mortgage just two months after she was flooded
out of her home.
According to the Wall Street Journal, a total of 34 homeowners in New
Orleans were facing foreclosure suits filed by Fortress' subprime lending
operation.
Mr. Edwards earned almost $480,000 as a consultant to Fortress last year,
has picked up about $150,000 in campaign donations from its employees, and
has invested $16 million of his own $30 million in assets in the company.
Fortress in turn has taken the precaution of incorporating its hedge funds
in the Cayman Islands, which lightens its investors' U.S. tax load.
Naturally enough, that's another practice John Edwards has criticized.
Fortress' well-paid consultant claims he had no idea the investment firm was
expanding its subprime lending, even though its involvement in such loans
was reported back in May.
Maybe he should start reading the papers.
And do you remember his fiery speech about "Two Americas," a grand
oratorical performance in the spread-eagle tradition of William Jennings
Bryan's populist classic, "Cross of Gold"? It turns out that John Edwards
belongs to the America he's been lambasting.
Quite an orator, that John Edwards. He delivered a rousing speech on the
evils of poverty - a cri de coeur entitled
"Poverty, the Great Moral Issue Facing America" - at the University of
California-Davis for a mere $55,000. (His spokeswoman noted that part of his
fee went to a booking agent, and that Bill Clinton had charged $100,000 for
his speech there, as if any of that mattered.)
Taking everything into consideration, some of us could better understand why
it would be worth $55,000 not to hear John
Edwards deliver a speech about the moral challenge poverty presents. The
poverty he's most successfully combated has been his own.