How John Edwards makes his millions grow
Investments in limited partnerships, an offshore hedge fund and subprime-mortgage lenders have made this wealthy presidential candidate even richer
By Tim Middleton
The presidential candidate one newspaper has labeled "Richie Rich in bib overalls" is a remarkably sophisticated investor.
Former Sen. John Edwards has exploited the middle of his famous three H's -- his $400 haircuts, his hedge-fund consulting and his new 28,000-square-foot home -- to spread his fortune around a maze of trusts and accounts that total something between $29.5 million (his campaign's estimate) and $62 million (the high end of ranges described in his federal disclosure).
Edwards' sprawling, 48-page campaign-finance disclosure for 2006 (.pdf file) reveals substantial investments in limited partnerships, subprime-mortgage lenders and an offshore hedge fund. The latter two run contrary to stands he has taken as a candidate.
Man of the people -- and profits
Edwards is running as a populist, but profits on his stock investments alone would distance the candidate from the cause.
Edwards has raked in hundreds of thousands of dollars in capital gains from stock in Apple (AAPL, news, msgs), BP PLC (BP, news, msgs), Burlington Resources, Medtronic (MDT, news, msgs) and Schlumberger (SLB, news, msgs), the chief rival to Halliburton (HAL, news, msgs), where Vice President Dick Cheney was once CEO.
Edwards generated most of his wealth as a trial lawyer, but last year his principal employment was as a senior adviser to Fortress Investment (FIG, news, msgs), a large hedge-fund operator, for which he received $479,512. His and his wife's investment in Fortress Investment Fund III (Fund D) totaled between $1 million and $5 million.
Fortress, based in New York, owns subprime lender Nationstar Mortgage, formerly Centex Home Equity. The Dallas company calls itself "one of the nation's leading mortgage lenders offering nonprime mortgages and home-equity loans."
As a presidential candidate, Edwards has lashed out at subprime lenders, saying they are "pulling a fast one on hardworking homeowners."
Talk back: Will candidates' personal and campaign finances affect your vote?
Fortress Investment Fund III is based in the Cayman Islands. Edwards' campaign said he opposes offshore tax havens and, "as president, he will end them."
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