Posted by: Kevin | August 17, 2007

John Edwards, Looking Stupid

From today’s Wall Street Journal:

“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.”

In general, I don’t believe in harassing people, even politicians, about the misdeeds of every single company in their portfolio.  A balanced portfolio will include a lot of companies.  Inevitably, some of them will turn out to be crooked.  That said, $16 million is a lot of money and he worked for this company.

“At the time in late 2005 when Mr. Edwards went to work for Fortress, it already had a stake in one subprime lender that subsequently foreclosed on some Katrina victims, Green Tree Servicing LLC. While he was there, Fortress acquired a second, Nationstar Mortgage LLC. Fortress paid Mr. Edwards $479,512 in 2006 for part-time work, a Federal Election Commission report in May showed.

After leaving the firm, he kept about half of his net worth in Fortress funds. And Fortress employees have collectively made up the largest class of political contributors to Mr. Edwards. Workers there put up more than $150,000 toward his presidential run in the first six months of the year.”

Some distinction should be made here between Fortress Investment Group, which is an investment vehicle, and the mortgage companies in question.  Even when John Edwards was doing work for Fortress (lobbying?) he wouldn’t have any input in their investment decisions.  There’s nothing criminal going on here, just a whole lot of stupid.

Why is it stupid?  John Edwards has been pushing the whole “2 Americas” idea in his campaign.  As part of that theme he has been making a big deal of mortgage companies foreclosing on people in distress.  To take that stance while being unaware of where his money is being parked is just dumb.  It makes him look unserious and conjures up images of the Limousine Liberal. 

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