Super-rich gunning for Bush

WHEN George W Bush decided to gift the rich of America a tax break it probably never crossed his mind he would be stoking the fires of a vociferous campaign by some of the wealthiest businessmen in the land to remove him from the White House.

And so when Warren Buffett last week announced he would be joining fellow billionaire George Soros in the fight to remove Bush, many might have been surprised. Only last August, the world’s second richest man was named as Republican Arnold Schwarzenegger’s senior economic adviser in the race for the California governorship.

But considering the man credited with being the greatest ever investor lives by the mantra "Rule number one: Never lose money. Rule number two: Never forget rule number one", his motives become clearer.

Buffett is just the latest member of the super-rich community to fight Bush after announcing he is to become an economic adviser to Democratic presidential candidate John Kerry. This comes after financier and philanthropist George Soros said he was devoting his life and personal fortune to getting Bush out of office.

At the core of their stand are Bush’s tax policies, such as estate tax repeal. Both men have publicly stated that they believe any tax cut plans for the rich will alienate the middle classes and do nothing to improve job creation.

But Soros says he has also been motivated by Bush’s foreign policy, once commenting that it was "destroying my business". He believes that the Iraq war is damaging US interests abroad. He wrote recently: "When President Bush says, as he does frequently, that freedom will prevail, he means that America will prevail. In a free and open society, people are supposed to decide for themselves what they mean by freedom and democracy, and not simply follow America’s lead.

"The contradiction is especially apparent in the case of Iraq. We came as liberators, bringing freedom and democracy, but that is not how we are perceived by a large part of the population."

But analysts point out that behind the public statements, although billionaires such as these may be advocating policies that broadly fit their beliefs, they also stand to gain financially and would never consider putting their heads above the parapet if they didn’t think they were going to get a return on their investment.

Tim Carney, author of the forthcoming book Regulatory Robber Barons, said: "Buffett and Soros aren’t just philanthropists, and these aren’t just political ideologues; these are people who stand to profit. They’re making investments and expecting a return on it."

John Berlau, a Republican commentator, said: "Buffett, Soros, Bill Gates Snr and some of the Rockefellers got great press for joining with a group called ‘Responsible Wealth’ that seeks preservation of the estate tax.

"These economic royalists regularly are described as acting against their interests, even though it has been found that Buffett, for instance, has businesses that actually profit from the existence of the estate tax."

Dena Battle, tax-policy analyst for the National Federation for Independent Business (NFIB), explained just one way in which Buffett benefits. Many of that group’s members have businesses worth $1m or more, but have take-home pay of around $50,000. Because the estate tax currently hits 55% of income over a certain threshold, the only way many small-business owners can pass on their businesses to their children is by buying a life-insurance policy to prepay the tax.

One of those companies is SAFECO Life and Investments, which was acquired recently by an investor group led by Warren Buffett’s Berkshire Hathaway, the publicly traded company that has served as his principal investment vehicle since 1969. It has a current market capitalisation of nearly $102bn, Buffett’s 31.5% economic stake is now worth about $32bn.

Born in the Depression, Buffett vowed never to be poor and set about making his first investment at the age of 14 with the proceeds of five paper rounds he ran simultaneously.

He was dubbed the "Oracle of Omaha" for the way he combines uncanny investment acumen with a heavy dose of casually irreverent folk wisdom. His huge stake in Coca-Cola netted him an 800% return. It was bought on the open market at a time when most analysts were too timid to say the stock was undervalued.

Soros, who famously made billions from the hedge fund he was running when the pound was forced out of the Exchange Rate Mechanism in 1992, is a leading light of the ‘Anyone But Bush’ campaign in the US and has pledged $75m of his own fortune to the cause.

Soros has given millions in so-called ‘soft money’ donations to Democratic Bush-bashing groups such as MoveOn.org, rather than directly to the party.

A spokesman for Soros Fund Management in New York City insisted personal wealth was not what motivated these developments: "There’s no relationship between the policy prescriptions George Soros recommends and his own financial holdings. He doesn’t make policy recommendations to increase his own personal wealth. That’s not what motivates him."

FRIENDS WITH DEEP POCKETS

Backing Kerry: John Kerry has so far raised more than $85m for the second phase of his election campaign. He trails Bush heavily in terms of funding.

George Soros, one of the world’s wealthiest financiers and philanthropists, has put more than $75m of his own money where his mouth is.

Warren Buffett, agreed to be John Kerry’s economic adviser, in a team that includes Roger Altman, deputy treasury secretary under President Bill Clinton, and former Clinton economic adviser Gene Sperling.

Backing Bush: George Bush has managed to amass a campaign fund of more than $185m so far and is on course to raise a record- breaking $250m before the US goes to the polls.

He has the backing of Richard Mellon Scaife, 71, right, a billionaire Republican newspaper mogul believed to have been the main money man behind the anti-Clinton campaign after the Monica Lewinsky affair.

Conspiracy theorists point to the Halliburton Corporation which was given a multi-billion, no-bid contract in Iraq by the Bush White House. Vice-president Dick Cheney is the former CEO of Halliburton.

Typical of the large corporations that have backed Bush is First Energy Corp, of Ohio. Bush’s Environmental Protection Act eliminated the very Clean Air Act provision the company had violated 11 times.

The pharmaceutical industry has contributed almost a million dollars to Bush. An old friend of, and donor to, the President, David Halbert, who is a drug benefit company CEO, drafted part of a Medicare plan rewarding drug and insurance firms.