John Edwards has spent plenty of campaign time talking about the Bush administration's callousness towards the victims of Hurricane Katrina. He's also hurled some invective at the latest economic villains for the Democrats, subprime lenders. According to the Wall Street Journal, Edwards knows more than he lets on about both:
As a presidential candidate, Democrat John Edwards has regularly attacked subprime lenders, particularly those that have filed foreclosure suits against victims of Hurricane Katrina. But as an investor, Mr. Edwards has ties to lenders foreclosing on Katrina victims.
The Wall Street Journal has identified 34 New Orleans homes whose owners have faced foreclosure suits from subprime-lending units of Fortress Investment Group LLC. Mr. Edwards has about $16 million invested in Fortress funds, according to a campaign aide who confirmed a more general Federal Election Commission report. Mr. Edwards worked for Fortress, a publicly held private-equity fund, from late 2005 through 2006.
Asked about the matter, Mr. Edwards yesterday pledged that he would personally provide financial assistance to New Orleanians who are facing foreclosure by Fortress-affiliated businesses or have lost their homes already. "I intend to help these people," the former North Carolina senator said.
Bear in mind that this is not a case of a blind-trust investment choice, like the silly meme regarding Mitt Romney and stem-cell research. It's not even about a personal investment choice supposedly made in ignorance. John Edwards worked for the owner of a subprime lender during 2005 and 2006, when Hurricane Katrina hit and the company initiated foreclosures on the victims. In fact, he made almost a half-million dollars advising Fortress while it purchased a second subprime lender during that period.
Nor did he cut all ties to Fortress after he stopped consulting for them. He invested half of his net worth in Fortress, according to the WSJ. Fortress employees have contributed $150,000 to his presidential campaign in the first two quarters of this year.
Edwards has conducted a "poverty tour" as part of his campaign this year, emphasizing his Two Americas theme. One of the stops was in Cleveland, where he walked a neighborhood particularly affected by foreclosures. He told reporters, "This is not complicated, this is wrong," as he walked the streets, but the WSJ did some checking afterwards-- and four of the foreclosures came from Fortress Investment lenders.
Apparently it's more complicated than Edwards knows.
Remember this the next time Edwards attacks "shameful lending practices". His own firm, the one who used his consulting to operate and acquire companies like Nationstar, conducts those same practices. Will Edwards return the $150,000 in contributions to Fortress managers who run these lenders? Will he return to that Cleveland neighborhood and apologize for his hypocritical posturing on their streets?
And will Edwards finally get seen for what he is -- an ambulance chaser, a poseur, and a fraud?