While John Edwards has positioned himself as being antipoverty during his bid for the Democratic ticket to the White House, another presidential hopeful has used the topic of filing bankruptcy as a means to challenge Edwards' campaign messaging.
Specifically, Senator Chris Dodd of Connecticut has pointed out John Edwards' bankruptcy voting record as clear evidence that the former injury lawyer in North Carolina is not antipoverty but rather more about special interests.
Edwards has been campaigning that he would rewrite bankruptcy laws in favor of people who need to stop foreclosure and also said that he would target predatory mortgage lending practices as President of the United States.
While admitting that Edwards may not accept money from lobbyists in Washington, Dodd noted in an August 19th press release how his opponent has voted on bankruptcy legislation in the past as if he had other interests than those of the financially needy in mind.
The Dodd camp specifically pointed out Edwards voting actions on the Bankruptcy Overhaul bill in 2000. According to the press release, that bill would have essentially made it easier for courts to make debtors repay their debts rather than allowing them to discharge them. While Dodd and 11 other Democrats rejected this bill, Edwards voted in favor of it. Dodd even noted in the press release how President Bill Clinton vetoed this bankruptcy bill because it was too tough on debtors.
Dodd further questioned Edwards as a poverty fighter by saying that his opponent voted in favor of a similar version of the Bankruptcy Reform bill in 2001. Specifically, that bill required debtors to pay $10,000 or 25% of their debts over time under a Chapter 13 bankruptcy plan rather than letting them seek a discharge via Chapter 7 bankruptcy.
Questioning his opponent's political allegiances, Dodd noted how Edwards sided with Republicans in favoring the 2001 bankruptcy bill. Dodd said that Edwards even aligned with the Republican caucus in rejecting an amendment to the bill by Senator Paul Wellstone of Minnesota. That amendment would have given an exemption to debtors who were forced into bankruptcy because of medical expenses. Naturally, Dodd was one of 34 Democrats to vote in favor of this amendment.
Edwards' voting record on bankruptcy issues gets worse, according to the Dodd camp. Dodd detailed how Edwards once again lined up with the Republicans in rejecting an amendment that would have included a more consumer-friendly means test than in the original Bankruptcy Overhaul bill of 2001. That amendment would have required the Chapter 7 means test to average the debtor's last two months of income and taken into account sudden job losses or disabilities. The original bill mandated a means test averaging the debtor's last six months of income, which can make it harder to qualify right away when you've had a sudden, drastic change in finances.
Dodd concluded the press release by saying that Edwards ultimately supported a bankruptcy bill that not only punished the financially vulnerable but also aligned with big banks and credit card companies.
Dodd's scathing press release of his opponent came just a couple of days after Edwards said that he would end his investments with lenders offering subprime mortgages.
Edwards found himself in a bit of foreclosure pickle when it was revealed in May that nearly $16 million of his investments were in a hedge fund company that owned parts of two companies filing foreclosure lawsuits in New Orleans. Edwards denied knowledge of this link with subprime mortgage lenders and said that he would ask the hedge fund, Fortress Investment Group (FIG), to help Katrina victims facing foreclosure.
Why was this bad for Edwards? To begin with, he has said in his campaigning that he would go after predatory mortgage lending practices like subprime loans; thus creating a conflict of interest when your money is invested in companies specializing in that niche.
Furthermore, Edwards has campaigned as being for the poor. He has even toured and worked in Hurricane Katrina-ravaged areas of New Orleans. Having interests in a company that's going after New Orleans residents via foreclosure lawsuits can certainly be interpreted as a contradiction.
While announcing that he would have no investments in companies working with subprime mortgage lenders, Edwards said that this controversy would not affect his image as being for the poor. While that remains to be seen, we've already seen how Dodd has used the controversy to his advantage!
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