A May 17 Washington Post article by staff writer Matthew Mosk on the release of personal financial disclosure forms by several 2008 presidential candidates reported that former Sen. John Edwards (D-NC) "has faced questions about" his one-time employment with Fortress Investment Group "because Fortress owned offshore funds that served as tax havens for investors and because the firm's portfolio included subprime lenders, which provide high-risk loans that often target minorities." Mosk added: "As a candidate, Edwards has railed against both practices." In fact, Edwards has not "railed against" subprime lending, and his campaign website refers to it as "a valuable alternative for families with poor credit."
Edwards' campaign website draws a clear distinction between what it deems "predatory lending" and subprime lending -- a distinction the Post article did not make clear. According to Edwards' website, predatory loans "carry abusive terms that deceive and exploit borrowers, such as excessive and hidden fees, large prepayment penalties, mandatory arbitration clauses, unnecessary insurance products, and broker 'kickbacks' for steering borrowers into more expensive loans. Predatory terms are more common among subprime loans."
The May 17 article was not the first time a Post reporter has misstated Edwards' position on subprime lending, as Media Matters for America documented. During a May 16 online discussion on washingtonpost.com, Post money and politics reporter John Solomon claimed that the articles he has co-authored on Edwards' connections to Fortress "legitimately raised" the question of "whether a candidate who says he opposes offshore tax havens and subprime lending should have worked for a firm that engaged in both practices." Solomon was identified as a contributor to the May 17 Post article.
Politico chief political writer Mike Allen, in his May 17 "Political Playbook," highlighted the Post article as containing the "sentence of the day," and specifically highlighted the Post's mischaracterization of Edwards' subprime lending position as "too seminal to pass up."
From the May 17 Post article:
And John Edwards, a trial lawyer who earned his initial fortune by defending the ill and injured in the courtroom, made $479,000 last year in salary and held more than $7.5 million in investments with Fortress Investment Group, a New York hedge fund.
Edwards has faced questions about the hedge fund -- where he said he worked only a few days a month -- because Fortress owned offshore funds that served as tax havens for investors and because the firm's portfolio included subprime lenders, which provide high-risk loans that often target minorities. As a candidate, Edwards has railed against both practices.