Accuracy in Media

The first of many anti-Bush ads purchased by George Soros appeared in the Wall Street Journal at the end of September. Some of the questionable statements made in the ad concern Soros himself. He described himself as someone who “accumulated a large fortune through an international investment fund.” In fact, he is a billionaire and his “investment fund” is not available to investors like you or me.

There are some interesting facts about the ad itself. It was two full pages. It was placed in the “gutter” of the paper, which is the section that enables the two pages to be opened and pulled out at once. One page alone costs $177,000. The special placement was another 25 percent. So the full cost of the Soros ad was over $400,000. Similar ads will run in newspapers in a dozen or more cities. The Journal is supposed to insist that the ads it publishes, like its news stories, are backed up with facts. But Soros accused Bush of managing “to suppress all dissent” after 9/11. That’s false and absurd. It also appears that the facts are being suppressed about Soros and what his “investment fund” is all about.

This “investment fund” is actually a hedge fund. The Securities and Exchange Commission points out that “?unlike mutual funds, hedge funds are not registered with the SEC. This means that hedge funds are subject to very few regulatory controls. In addition, many hedge fund managers are not required to register with the SEC and therefore are not subject to regular SEC oversight? The SEC can take action against a hedge fund that defrauds investors, and we have brought a number of fraud cases involving hedge funds.”

In September 1998 the Federal Reserve bailed out Long-Term Financial Management, a very large hedge fund about to go bankrupt, with over $3.6 billion. The Fed intervened because it was concerned about the impact on world financial markets if the hedge fund failed. A manager of a New York-based hedge fund, the Sterling Watters Group, was recently indicted on charges of financial fraud.

What would Soros demand from a Kerry Administration in return for his backing of Kerry and the Democratic Party? A possible answer is continued lax or absent oversight and scrutiny from the SEC. In fact, one of the Soros companies is a member of the Managed Funds Association, which describes itself as “the global voice for the hedge fund industry,” and is now actively fighting an SEC proposal to impose more regulation on hedge-fund managers. The MFA represents 34 hedge funds that manage some $800 billion.

Some of the biggest Kerry supporters and fundraisers are hedge-fund managers. They include Orin Kramer, a partner at Kramer Spellman LP, a New York-based hedge fund, and James Chanos, the President of Kynikos Associates. Chanos was one of several wealthy Kerry backers who attended a New York Kerry fundraiser in the Park Avenue apartment of Blair Effron, vice-chairman of UBS Investment Bank. The Wall Street Journal noted that Kerry Is “courting” the super-rich while “using populist corporate-bashing rhetoric to woo the party’s liberal base?” The super-rich includes Soros.

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