Who's the Biggest Phony Of Them All?
By Paul Greenberg
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.