John Edwards 2008: What’s not to like

Since his stint as the Democrats’ vice presidential candidate in 2004, the tension between Edwards’ private life and his politics has been growing. In recent years, Edwards, 54, has adopted a more populist tone at the same time he’s taken on more of the accoutrements of wealth.

That tension may be one reason that Edwards has struggled against Sens. Hillary Clinton of New York and Barack Obama of Illinois.

“I think it does hurt him, because it calls into question his sincerity,” said former South Carolina Democratic Party Chairman Dick Hartpootlian, who backs Obama. “If you base your campaign on where you come from, the haircut, the corporate portfolio, all that is inconsistent with that.”

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As a lawyer, Edwards went for the big payoffs, making millions suing doctors, hospitals and corporations and building a net worth he’s reported at about $30 million. Edwards wasn’t an anti-poverty lawyer, and he did little pro bono work. He didn’t emphasize fighting poverty when he ran as a moderate in 1998, defeating Republican Sen. Lauch Faircloth, or during his six years in the Senate.

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But since his Senate election, he’s traded up to progressively tonier residences: a $3.8 million house near Embassy Row in Washington, a $5.2 million house in Georgetown and finally a $6 million house, which includes a full-size indoor basketball court, built in 2005 outside Chapel Hill.

Edwards also took a part-time consulting job with Fortress Investment Group of New York in October 2005. Fortress raises money from wealthy individuals and institutions, pools the cash in private equity or hedge funds and invests it in alternative ways - buying public companies and taking them private, for instance - to beat usual market returns.

With $43 billion under management, including $16 million of Edwards’ personal fortune, Fortress is among the major firms in its class. While Fortress was incorporated in Delaware, its hedge funds were incorporated in the Cayman Islands, allowing partners and investors to avoid or defer paying taxes. That’s a practice that Edwards frequently has criticized.
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Democratic presidential candidate John Edwards, who made his fortune as a trial lawyer, says attorneys should have to show their medical malpractice cases have merit before filing them.

He also said attorneys with a history of frivolous suits should be barred from filing new cases.

Edwards’ proposal is similar to “certificates of merit” laws that have been adopted in several states in recent years. Those laws usually require that an independent doctor assert the validity of a malpractice case before it is filed.

Edwards also said that while reducing malpractice lawsuits, as many have advocated, is a good idea, it won’t significantly affect health care costs.

The Associated Press

http://ap.google.com/article/ALeqM5g2256WHmHfmTC9KGk67Luy9UD75A

There are plenty of causes for this sad heath-care situation. But Edwards wasn’t talking about one of the biggest causes - the cause he is among the most responsible for.

“The primary factor is liability insurance,” said Dr. Stuart Weinstein, an orthopedic surgeon at the University of Iowa. “It’s either too expensive in areas like that or simply not available anymore.”

Virginia’s medical-liability insurance rates - driven largely by the very types of lawsuits that made Edwards a multimillionaire many times over - have more than doubled in three years, according to the nonpartisan Medical Liability Monitor.

In Edwards’ home state, those premiums quadrupled. As a result, doctors have fled rural areas or quit practicing altogether.

New York Post 7/20/07
http://www.nypost.com/seven/07202007/news/columnists/edwards_got_rich_hurting_the_poor_columnists_charles_hurt.htm

John Edwards, being neither a woman nor a racial minority, isn’t doing especially well in his campaign to become the Democratic Party’s candidate for the U.S. presidency. Alas for him, if he were half as successful in campaigning for America’s top job as he was as a trial lawyer, he might be sworn in tomorrow. Edwards won at least 94 cases, according to Lawyers Weekly, of which 54 netted more than $1 million each. Normally attorneys take a 40 percent cut of cases that go to trial. In his last year as a practicing attorney, 1997, he reported an adjusted gross income of $11.4 million. Of course, despite their slimy reputation, trial lawyers can be on the side of right. It just happens Edwards wasn’t.

Medical malpractice was his specialty, and he reportedly tried more than 60 such cases, winning more than $1 million in over half of those. Most involved Ob/gyns. Indeed, he was so feared, according to the Center for Public Integrity, “that doctors would settle cases for millions of dollars rather than face him at trial.”

 The American Spectator–Michael Fumento 3/21/07

http://www.spectator.org/dsp_article.asp?art_id=11179

High-earning self-employed professionals are likely hearing one word from their accountants these days: incorporate. It might make sense in light of President Bush’s recent comment that he’s “open-minded” to an increase in the amount of salary–now $90,000–that the Social Security payroll tax is levied on.

The idea is to do what Democratic vice presidential candidate and former North Carolina Senator John Edwards did back when he was a trial lawyer: Set up your practice as an S corporation, pay yourself a reasonable salary as an employee and then take the rest as S corp profits that are subject to income but not payroll taxes. (S corp profits aren’t subject to corporate tax but are all passed through to an owner’s return and taxed at ordinary income rates.)

Right now wages of more than $90,000 a year are subject to the Medicare tax, which amounts to 2.9% when both the employer and employee contributions are counted, but not to the combined employer-employee levy of 12.4% for Social Security.

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But before you rush to incorporate, consider this: If Congress raises the ceiling on the Social Security tax, it’s also likely to crack down on the John Edwards ploy. In a recent report on possible loophole closers the staff of Congress’ Joint Committee on Taxation suggested that partners and S corp. owners in service businesses like law be subject to payroll taxes on all of their S corp. or partnership income. Even with the existing $90,000 cap, this and some less drastic tightening on other S corp. owners and partners would raise $57 billion over ten years, the report projects. Get rid of the $90,000 cap and you’re talking real money.

Forbes 3/14/05
http://www.forbes.com/free_forbes/2005/0314/046a.html

While it might be that Edwards was something of a late bloomer when it came to politics and government, it appears that his interest in politics and political issues has been superficial at best:

Will Americans really want a candidate who was so disengaged from government that he voted in only 7 of the 13 elections before his own race? Who has so little regard for his own political history that he cannot recall whom he supported for the nomination in 1992? (”My guess would be Kerrey,” Mr. Edwards said of former Senator Bob Kerrey. “But I don’t remember.”)

Because of Edwards’s relative lack of experience, it should come as no surprise that even Kerry family members were skittish about him being chosen as the Democratic Vice Presidential candidate. Indeed, it should come as no surprise that Kerry himself expressed concerns about Edwards’s qualifications during the Democratic primaries — concerns that Republicans are all too happy to throw back against the Kerry-Edwards campaign. And why shouldn’t they? From discussing how we must deal with Iraq to discussing the issue of gay marriage, Edwards has been consistently found wanting in his knowledge of policy issues.

Edwards won national attention and acclaim thanks to his stump speech about “Two Americas” and thanks to his image as a former trial lawyer who is a champion for the average American. Of course, as a lawyer myself, I certainly don’t begrudge Edwards his decision to follow a career in the law, and certainly, plaintiffs’ attorneys are needed to keep excesses in check. But that does not justify Edwards’s contribution to the propagation of unsound medical care thanks to his work in one particular trial. Edwards’s “Two Americas” speech is similarly off-base. Indeed, if it is the case that the economy will grow faster this year than it has in the past two decades, Edwards’s pessimistic speech and populist arguments will seem especially hollow.

America’s first ever Vice President, John Adams, once remarked that “Today I am nothing, but tomorrow I may be everything.” In an age where we are fighting a war against terrorists whose last attack in the United States sought to destroy major government buildings and kill government leaders, Adams’s words serve emphasize the importance of selecting a Vice President who is knowledgeable about the issues. Instead, John Kerry has wasted his first Presidential choice by selecting a charming man who at best does not care, and at worst is genuinely confused about the policy issues of the day. Democrats will inevitably counter that George W. Bush was/is clueless as well, and if that is what they think, then they can cast their votes accordingly. But apart from this being nothing more than a fallacious tu quoque reply, it begs the following question: If Democrats are so repulsed by the caricature of an out-of-his-depth George W. Bush, then why did they agree so willingly with the choice of a Vice Presidential candidate who fits that caricature in so many ways?

Tech Central 7/15/04
http://www.techcentralstation.com/071504F.html

But doctors say there is another side. Insurance companies may cut the checks for the big awards and settlements. But the price is being paid by doctors and hospitals who ultimately pass the costs to patients through higher medical bills, the doctors say. And they say such malpractice cases cause doctors to practice defensive medicine, ordering unneeded tests.

One Charlotte obstetrician quit her practice after losing a $23 million suit that was handled by Edwards. The St. Paul Group of Minnesota, the main medical malpractice carrier in the state, stopped offering insurance to obstetricians, citing high settlements.

Dr. David Newman, a Charlotte obstetrician, says trial lawyers such as Edwards are a major reason that malpractice insurance premiums are rising so rapidly. Faced with annual increases of 25 to 30 percent, Newman said he has cut his OB-GYN practice in half to reduce his liability exposure.

“For the last 10 to 15 years, people have gotten very relaxed into thinking no one is getting hurt — we are just suing insurance companies; we are not suing your doctor,” Newman said. “It just isn’t true. Everybody pays . . . for John Edwards’ $50 million.” (more…)

For next year, the administration is considering a Legal Consumers’ Bill of Rights. Modeled after the patients’ bill, the legislation would require trial lawyers to give detailed information to consumers about how their frequently complicated fee systems work. Proponents liken it to consumer-protection measures the Federal Trade Commission requires of funeral homes and used car dealers. Trial lawyers bristle at the thought, but counter it only with the most bloodless legal arguments. “Congress doesn’t have the authority to regulate lawyers in a given state,” complains Carlton Carl, spokesman for ATLA. “Lawyers and what they do are governed by court system. It’s a violation of the separation of powers to try and do that. It’s an effort to intimidate injured people into not hiring attorneys.” But trial attorneys really fear that the public will learn of their questionable contingency arrangements—such as taking one-third of a million-dollar settlement that took only a few phone calls to negotiate, or sticking clients with the bill for litigation expenses without disclosing that policy up front. “Educating consumers,” says Victor Schwartz, a former trial lawyer and tort reform proponent, “is going to change the way lawyers do business.”

Edwards himself won’t discuss what or how he charges clients. Like other personal-injury lawyers, he worked on a contingency basis, whereby he earned nothing if he lost, but stood to receive between 30 and 40 percent of the award if he won. But he’s never accepted that such information should be part of the public record. He has boasted—and why not?—of winning large sums for deserving plaintiffs ($152.4 million in 63 cases, by one count), but refuses to reveal his own take. Disclosure statements filed when he ran for the Senate established his net worth to be somewhere between $13.7 million and $38.6 million. But the appearance that he’s trying to conceal the scope of his earnings plays directly to the Republican contention that fees must be brought to public view.

Washington Monthly, October 2001
http://www.washingtonmonthly.com/features/2001/0110.green.html