Wednesday, May 16, 2007

Wealth Is A Common Factor Among 2008 Candidates

The NYT reports:
Former Mayor Rudolph W. Giuliani of New York, who just six years ago told a divorce court he had only $7,000 in assets under his control, has amassed a net worth of more than $30 million, much of it from paid speeches.

Former Senator John Edwards of North Carolina, who has spent the last three years crusading against poverty, also reported about $30 million in assets. His income included nearly half a million dollars for advising an elite investment fund and $40,000 for directing a poverty studies program at the University of North Carolina, Chapel Hill.

Mr. Giuliani and Mr. Edwards reported their assets in personal financial disclosure forms released Wednesday by the Federal Election Commission. Federal election laws require all the presidential candidates to file the forms. Together, they offer a glimpse of the general affluence of all the primary candidates and the truly extreme wealth of a few.

Neither Mr. Giuliani, a Republican, nor Mr. Edwards, a Democrat, is the richest of the White House hopefuls. That title belongs to Mitt Romney, a founder of the private equity firm Bain Capital, who has said he expects to report as much as $350 million in assets, including a trust for his heirs. Mr. Romney and Senator John McCain of Arizona, both Republicans, and Senator Hillary Rodham Clinton, Democrat of New York, have all received extensions of the filing deadline for their forms.

Mr. Giuliani’s $30 million fortune is the most unexpected information to emerge from the disclosure forms so far. During his divorce from Donna Hanover in June 2001, a lawyer for Mr. Giuliani said he had only $7,000 in personal money “under his control.” His salary as mayor of New York at the time was about $195,000, and his local financial disclosure forms showed less than $800,000 in deferred compensation, pension, retirement and mutual funds. He had also signed a contract to write two books for an advance of $3 million.

The latest disclosure form suggests that his biggest source of income was speeches, capitalizing on his celebrity after the terrorist attacks of Sept. 11, 2001. For the period covered by the form — roughly the calendar year 2006 — Mr. Giuliani reported making 124 speeches for as much as $200,000 each and earning a total of about $11.4 million.

Self-help and motivational rallies were his top audiences. He made about 26 speeches at events staged by Get Motivated Seminars, the company of the impresario Zig Ziglar, and 8 more at major events put on by the executive education group HSM.

Mr. Giuliani put a value of $5 million to $25 million on his stake in his consulting firm, Giuliani & Company, which he said paid him about $4.1 million last year. He said he received about $1.2 million in income from his law firm, Bracewell & Giuliani. Mr. Giuliani, who opened a New York office for what had been a Texas firm, said the $1.2 million he received reflected a guaranteed payment of $1 million a year from the firm, plus 7.5 percent of the New York office’s revenue.

Mr. Giuliani’s book has apparently sold well enough to earn royalties covering his $3 million advance; he reported $146,092 in book royalties in 2006. In addition, Mr. Giuliani reported $496 in theatrical royalties. A spokesman for his campaign said Mr. Giuliani earned that money for playing himself in the films “Anger Management” and “The Out-of-Towners,” as well as for guest appearances on the television programs “Law & Order” and “Saturday Night Live.”

Mr. Edwards, who earned his millions as a trial lawyer before running for the Senate in 1998, reported assets worth $14.3 million to $44.7 million in 2004. Since leaving office that year, he has devoted most of his energy to promoting efforts to help the poor, but he has recently faced questions about signing on part time in 2005 as an adviser to the hedge fund manager Fortress Investment Group.

Like many hedge funds — loosely regulated investment companies open only to the rich — some Fortress funds are incorporated in the Cayman Islands to avoid taxes. Fortress has invested in a firm that lent high-interest rate mortgages to low-income homeowners. A recent wave of foreclosures on such so-called subprime mortgages has elicited accusations from Mr. Edwards and others that some firms had engaged in predatory lending. Mr. Edwards has said he was not involved in any specific Fortress investments in that business.

Mr. Edwards’s financial disclosure form shows that he received $479,512 from Fortress in 2006; the forms did not cover 2005. In addition, the forms show that Mr. Edwards sold several million dollars in other assets to personally invest in Fortress funds. His disclosure form put the value of his holdings in Fortress funds at $11.2 million to $24.7 million.

Mr. Edwards has said he joined Fortress both to make money and to learn about finance.

Mr. Edwards’s campaign said he gave $350,000 to charities in 2006, including $333,334 in book royalties.

Eric Schultz, a spokesman for Mr. Edwards, said: “The bottom line is, if you look at where John Edwards comes from and his record, it’s clear what makes him tick: helping those who haven’t been as blessed as he has been. John Edwards is running for president to give every American the opportunities that he’s had.”

Senator Christopher J. Dodd of Connecticut, another Democratic candidate, also disclosed an investment of more than $50,000 in the Fortress Investment Group. Mr. Dodd reported total assets of more than $1.5 million and a cottage in County Galway, Ireland, that he valued at $100,000 to $250,000.

Not all the candidates were so flush. Representative Duncan Hunter, Republican of California, reported assets worth hundreds of thousands of dollars but also said he owed more than $30,000 in car loans and more than $75,000 in credit card debt. His was the only disclosure form to be filled out in handwriting.

Gov. Bill Richardson of New Mexico, a Democrat, reported owning more than $100,000 in stock and options worth at least $250,000 in a major oil refiner on whose board he once sat.

Former Gov. Mike Huckabee of Arkansas, a Republican, reported assets valued at less than $700,000, including his retirement benefits as a former Southern Baptist minister. He earned about $150,000 in royalties from his book about his weight loss.

Representative Ron Paul of Texas, a libertarian-minded Republican who often warns that excessive government threatens the economy, has put his pessimism into his portfolio. If the dollar collapses, Mr. Paul will be ready: his favorite investments are real estate, silver and gold.