[lbo-talk] The Opposition to Bush, a subsidiary of Soros Fund Management

Curtiss Leung curtiss_leung at ibi.com
Thu Feb 5 14:38:50 PST 2004



>From an article in today's WSJ, "Soros Has a Hunch Bush Can Be Beat":

But Mr. Soros isn't just writing checks and

watching; He is also imposing a business model

on the notoriously unruly world of politics. He

demands objective evidence of progress, and assigned

an aide to monitor the groups he supports. He studies

private polls to track the impact of an anti-Bush

advertising campaign, and he is delivering his money

in installments, giving him leverage if performance

falters.

This makes my head spin, and not in a good way. "[H]e is delivering his money in installments, giving him leverage if performance falters." So if $X million to whomever fails to give the desired downtick to Bush's approval ratings, he'll just take his checkbook and go home? And am I supposed to believe that his checks come without recommended positions?

Am I just being too cynical, or does this give others here a bad, bad feeling?

NB: I found the official webpage for Soros' Open Society Institute, but nothing for the Quantum Fund, or Soros Fund Management--plenty of stuff *about* them, sure, but no official webpage. I guess openness only goes so far.

Entire article follows. Snarky comments in parentheses.

Curtiss

-----------------------------------------------------------

Soros Has a Hunch Bush Can Be Beat

Billionaire Puts His Weight, Money Behind Democratic Effort to Oust President in '04 By JEANNE CUMMINGS Staff Reporter of THE WALL STREET JOURNAL

NEW YORK -- When he was an active currency trader, George Soros bet heavily on his hunches, most famously when he made a $1 billion profit on a 1992 bet that the British pound was overvalued. Now convinced that President Bush is overvaluing America's supremacy, he's betting at least $15 million that he can help oust him in November.

The 74-year-old billionaire's clout and largess has made him the most important money man in the Democratic Party this election year, as he raises funds for candidates, donates to left-leaning activists and lobbies wealthy friends to do likewise. Wednesday night, he co-hosted a New York event to help a new voter-registration project.

Republicans are concerned enough to mount a legal assault to slow him down. They have appealed to the Federal Election Commission to hem in Soros-backed, tax-exempt advocacy and voter-mobilization groups by forcing them to adhere to limits on political donation and spending. The FEC will take up the matter Thursday.

But Mr. Soros isn't just writing checks and watching; He is also imposing a business model on the notoriously unruly world of politics. He demands objective evidence of progress, and assigned an aide to monitor the groups he supports. He studies private polls to track the impact of an anti-Bush advertising campaign, and he is delivering his money in installments, giving him leverage if performance falters.

Certainly Mr. Soros -- whose estimated fortune of $7 billion puts him 28th on the Forbes 400 list of the world's richest people -- is one big reason new channels for political money have become such a hot subject this year. He doesn't sit on the boards of the groups he supports, or weigh in on day-to-day strategy. Still, his opinion matters, and the group organizers give him early warning of any brewing controversies -- such as the time when one mistakenly posted on the Web a proposed anti-Bush commercial that compared the president to Adolf Hitler. The ad was never broadcast commercially.

Of course, Mr. Soros doesn't always enjoy the golden touch. His two early Democratic presidential primary picks -- Howard Dean and Wesley Clark -- are struggling. But that may not matter to Mr. Soros, who said in an interview that Massachusetts Sen. John Kerry's foreign policy best reflects his own global thinking. (Oh yeah, something else to give me the warm and fuzzies about Soros --CL)

It was the Iraq war that prompted Mr. Soros to break his tradition of staying out of presidential campaigns. As troops were sent to Iraq, he began writing "The Bubble of American Supremacy," which was recently released and argues that the administration's reliance on military power to impose its global vision is dangerous and as untenable as the inflated technology stocks of the late 1990s.

His next step was to amplify other voices of dissent. Early in 2003, he pledged $3 million over three years to the Center for American Progress, a think tank founded by former Clinton aide John Podesta to counter conservative voices.

After an April dinner at his Manhattan apartment to discuss Mr. Podesta's project, Mr. Soros pulled aside two senior aides, Morton H. Halperin, a former Clinton aide who directs Mr. Soros's Washington-based Open Society Institute, and Michael Vachon, a personal assistant who is overseeing Mr. Soros's political projects. Mr. Podesta's think tank was a good long-term project, he said, but was there a role Mr. Soros could play in the 2004 campaign?

To ensure an unbiased assessment, he hired two separate political teams to evaluate Mr. Bush's strengths and weaknesses, the tactics needed to beat him and how much it would cost. Heading one team was Tom Novick, a former Oregon state legislator who had recently done a report concluding that voter mobilization was a better investment than last-minute television ads. The second group was lead by Mark Steitz, a Washington-based political analyst who had done a similar assessment of President George H.W. Bush's 1992 re-election chances for some wealthy Democratic donors.

Working independently, both teams reached the same conclusions: The electorate remains split, and Mr. Bush is vulnerable because of the troubled economy and messy aftermath of the Iraq war. They found that 17 states, most in the Midwest, are in play, but the only way Democrats could win was to upgrade their voter-mobilization machine and come up with cash to pay for TV ads during the spring when Mr. Bush is expected to use his nearly $200 million war chest to try to bury the Democratic nominee.

On July 17, Mr. Soros and other potential donors gathered in his Southampton, Long Island, home to receive the findings, and soon began peppering Mr. Novick with questions about how old-fashioned get-out-the-vote operations had become an increasingly scientific business in modern politics.

Mr. Novick, for instance, told Mr. Soros that 70% of union members who got a call from unions voted for Al Gore in 2000, according to the AFL-CIO. Only 61% of union members who weren't contacted voted for the losing candidate in that close election.

A strategy for defeating Mr. Bush by activating new voters appealed to Mr. Soros because it reflected tactics the Hungarian native -- he is a naturalized U.S. citizen -- began using in the early 1980s to help promote democracy in Eastern Europe. He bought copying machines for Hungarian dissidents, for example, and connected Russian college instructors to the Internet.

But he wanted a sound corporate structure, and under his prodding the group stopped thinking about "what can we imagine getting" and started focusing on "what is necessary to win," says Mr. Steitz. By morning, the outlines of a new organization began to emerge, and Mr. Soros pledged $10 million to get it started. His friend, Peter Lewis, chairman of Ohio's auto-insurance giant Progressive Corp. and an attendee at the Southampton sessions, agreed to match the gift. To give his newest venture some leverage with other potential donors, Mr. Soros agreed to announce his donation early to stimulate other giving. In August 2003, the new organization was unveiled under the name: America Coming Together.

Mr. Soros then set out to diversify his political investment. On Sept. 17, Wes Boyd, the California-based founder of MoveOn.org, a liberal online organization founded during the Clinton impeachment trial, arrived in New York for what he thought would be a get-acquainted session with Mr. Soros.

Mr. Soros said he was prepared to offer the group a $2.5 million "challenge grant" and asked Mr. Boyd what he thought would be an appropriate match to seek from MoveOn members. "I was caught flat-footed," says Mr. Boyd, who offered a 2-to-1 deal. "I will never live it down," he says. Funded by the effort, MoveOn recently launched the first in a series of ads criticizing Bush policies.

"Lord of the Democrats," shouted a Republican fund-raising letter shortly after Mr. Soros's third donation to a liberal organization became public. The National Republican Senatorial Committee called him an "out-of-touch, left-wing radical" pushing an "extremist agenda on America." Republicans in Washington combed through newspapers and books and quickly circulated anything provocative about Mr. Soros. He gave them a fair amount to work with.

He helped finance voter referendums allowing first-time drug offenders to receive treatment rather than jail time and one legalizing doctor-assistant suicide, and helped pay for distribution of the so-called morning-after pill, which is the next abortion battleground. "I stand on those issues," he says. As for his conservative critics, he shrugs and says: "I'm on the other side." (Give the devil his due: these I like --CL)

Write to Jeanne Cummings at jeanne.cummings at wsj.com

Updated February 5, 2004



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