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Page 7
1ST STORY of Level 1 printed in FULL format.
Copyright 1995 The New York Times Company
The New York Times
October 8, 1995, Sunday, Late Edition - Final
SECTION: Section 7; Page 34; Column 3; Book Review Desk
LENGTH: 1728 words
HEADLINE: Breaking the Bank
BYLINE: By Adam Smith; Adam Smith is the author of "The Money Game" and the
creator and host of the weekly PBS series "Adam Smith."
BODY:
SOROS ON SOROS
Staying Ahead of the Curve.
By George Soros with
Byron Wien and
Krisztina Koenen.
326 pp. New York:
John Wiley & Sons.
Cloth, $39.95. Paper, $19.95.
SOROS
The Life, Times,
& Trading Secrets
of the World's
Greatest Investor.
By Robert Slater.
Illustrated. 269 pp.
Burr Ridge, Ill.:
Irwin Professional Publishing. $25.
IT was after Sept. 15, 1992, that George Soros became a world celebrity. He
was already well enough known in the investment community; he had been on the
cover of Institutional Investor back in 1981. But that one Tuesday in September
Mr. Soros made a billion dollars. The Bank of England, under pressure, detached
sterling from the other currencies of Europe, and everybody who had borrowed
sterling Monday night could buy it cheaper on Wednesday morning, pay back the
borrowing and keep the difference. This action didn't create much attention
here; it didn't affect the United States directly, and, anyway, it didn't sound
like much: the pound went from 2.77 German marks to 2.65 by the end of the week.
But in the world of currency futures, three cents is all you need to buy a
dollar. Mr. Soros had put all $10 billion worth of the Soros funds on the line,
and the 12-pfennig drop, magnified, was a billion dollars. It was the coup of a
generation.
I had him as a guest on my PBS show shortly thereafter. He was ironic,
detached, charming, self-deprecating, and he sounded like Claude Rains in
"Casablanca." He wished he could live in a world of stability, but, alas, the
Page 8
The New York Times, October 8, 1995
financial systems of the world were unstable, and he was an expert in
instability, an insecurity analyst, able to take advantage of -- a favorite
phrase "disequilibrium." The same bet, after all, had been open to anyone,
especially anyone who could read the speeches of Herr Doktor Helmut Schlesinger,
the head of Germany's powerful Bundesbank, who had virtually invited the pound
to tumble.
The general press discovered, perhaps six months later, that the Man Who
Broke the Bank of England had also been giving money away in the hundreds of
millions of dollars mostly to Eastern Europe. Mr. Soros established the
Central European University, donated money for the reconstruction of Sarajevo's
water and gas lines and granted $500 each to 30,000 Russian scientists when that
was real money in rubles. He moved, while governments dithered, on the scale of
a Rockefeller or a Carnegie.
Now Mr. Soros has published "Soros on Soros." It is one of the most intensely
fascinating presentations ever offered by a financial figure part
autobiography, part essay on markets and, mostly, a fervent attempt to get
across a philosophical viewpoint. The fascination comes from having a
self-revealing but very complex billionaire talk about his parents, his former
partners and his strategies. The philosophical viewpoint is an outgrowth of the
one Mr. Soros published in 1987 in "The Alchemy of Finance," some of which was
so abstract it left readers feeling as though they had wandered into a freshman
philosophy course on a bad Monday, when the lecture was on Wittgenstein and they
hadn't done the reading.
"Soros on Soros" is spoken, not written, and Mr. Soros has been lucky, or
shrewd, in his choice of interlocutors. The book had its origins as an
interview, in German, with Krisztina Koenen, a journalist writing in the
Frankfurter Allgemeine Zeitung. A new version, printed here, concerns politics
and philosophy why he gives money away, what he hopes to accomplish and his
views on politics and policies in Europe. The Koenen interview is sandwiched
between ones with Byron Wien, an old Soros friend and a market strategist at
Morgan Stanley. Mr. Wien walks Mr. Soros through the stages of his life, and
through major investment decisions, and into opinions about hot points
Mexico, Japan, Argentina and derivatives.
Mr. Soros then "reworked" the interviews. "My life is not about money,' he
says. "Money is a means to an end." Elsewhere, he observes, "philosophy is the
most important part of my life." The presence of the interviewers and the
Q.-and-A. format are important on two counts. They provide an intimacy, and stop
Mr. Soros from sliding into abstraction. "But it's exactly your philosophy that
has everyone confused," says one of the interviewers. Mr. Soros loves
abstractions. "There is a lot of emotion and personal experience packed into
them, he says. But when he begins to talk about the difference between thinking
and reality, we're glad an interviewer is not far away and can say, "You have
really lost me here. What do you mean?"
There is no abstraction when Mr. Soros talks about his past. Here he is in
Nazi-occupied Budapest in 1944, an upper-middle-class Hungarian Jew whose father
had secured false papers. "The important and paradoxical point is that 1944 was
the happiest year of my life," he says. "This is a strange, almost offensive
thing to say
but it is true
I had a father whom I adored, who was
in command of the situation
For a 14-year-old, it was the most exciting
Page 9
The New York Times, October 8, 1995
adventure that one could possibly ask for. It had a formative effect on my life
because I learned the art of survival from a grand master.' Mr. Soros's
experiences under the German occupation and under the Communists, who eventually
took over the country, led him to the fervent love of what he calls "the open
society."
If you had given Mr. Soros $1,000 in 1969, when he started his first fund,
you would have more than $2 million today. But in 1969, you were unlikely to
have given him the $1,000. He didn't have much of a record. He had gone from
Budapest to the London School of Economics, then to work as a traveling
salesman, then to a position as a trainee in a financial house in London and
then to New York as an analyst in 1956. The Soros family of funds was
unregistered in the United States -- they were offshore and the brilliant
Soros record stems in part from compounding gains without having to pay taxes.
Mr. Soros called his funds "Quantum" to suggest Heisenberg's uncertainty
principle. He pioneered what is now termed "macro" investing. Rather than
sticking to just one class of security or one country, macro investing considers
the whole world its oyster: bonds, stocks, currencies, commodities, futures
in any country, and long or short. The breakup of the international fixed-rate
currency exchange system in 1971 was timed just right for someone of Mr. Soros's
intelligence and background. Currencies could flow around the world unchecked at
computer speed, and his funds gave him a percentage of the profits. So his
conversation ranges from the Bank of Japan to knock-out options to Vaclav Havel.
Now he has prime ministers for breakfast. "I made my career," he says,
"without hobnobbing with the rich and powerful, and now that I can hobnob, I
don't have time for it." Markets seem to interest him only at major turning
points. He is willing to discuss his construct for boom and bust, but not with
great enthusiasm. He counts himself a "failed philosopher."
Robert Slater, a correspondent for Time magazine, has written a biography,
"Soros: The Life, Times, & Trading Secrets of the World's Greatest Investor."
Like a good reporter on a cover story, he has interviewed many of the people in
Mr. Soros's past, gathered some nice anecdotes and digested the voluminous press
clippings on his subject. Many of the best comments have already appeared in
print, like the axiom from Mr. Soros's chief manager: "It's not whether you're
right or wrong that's important, but how much money you make when you're right
and how much you lose when you're wrong.' Mr. Slater doesn't spend much time on
Mr. Soros's philosophy or on his philanthropies. Unfortunately, he had no access
to Mr. Soros, which makes it particularly jarring when he resorts to the
novelistic convention of reading Mr. Soros's mind (and in italics) "His mind
was racing
As he stared at the first flickering white lights of the city,
Soros's mind drifted.
He watched and waited." It makes the reader want to
think up alternative italicized scenarios: "Soros didn't see the flickering
white lights of the city because his desk faces the other way. His mind raced to
the thought of going to the Carnegie Deli downstairs for scrambled eggs and
onions."
In "Soros on Soros," on the other hand, there is an implicit bargain between
Mr. Soros and his interviewers. He will talk about the markets, about politics,
about giving money away what the public wants to know and they will help
him walk the reader through his broad ideas. Mr. Soros has in his mind a whole
architecture, beginning with our imperfect understanding, running through our
life drama (in which the decisions of the actors affect their perceptions), then
Page 10
The New York Times, October 8, 1995
leading to the necessity for the open society. "I believe in my own
fallibility," Mr. Soros declares. "Fallibility plays the same role in human
affairs as mutation does in biology." And he adds: "The question is, can we have
a set of beliefs based on the recognition that our beliefs are inherently
flawed? I believe we can."
But even if we don't understand this cadence of action and perception, don't
we cheerfully opt for the open society? The connection between our flawed
perceptions and the threat to civilization gets murky. The interviewers can't
pull it all together for Mr. Soros. He's going to have to do it himself.
Most of the readers of "Soros on Soros" -- and there will be many -- will be
thumbing its pages: Where is the trend? Where is the inflection point? Has Japan
bottomed? Is Mexico finished, or is it roaring back? Is this great bull market a
symptom of the instability of markets, and when does the dangerous part start?
That kind of attention saddens Mr. Soros. "It was my killing on sterling that
gave me a high profile," he says. "I think that's a commentary on the values
that prevail in our society."
The "values that prevail" are those of our time, in which money is the
denominator of absolutely everything. It is these values that assure Mr. Soros
of his audience -- and though the opinions on markets that he delivers today
will be overtaken by events, he will always have an eager audience for new ones.
Meanwhile, he will continue to deliver the next version of his philosophy --
until we get it right.
LANGUAGE: ENGLISH
LOAD-DATE: October 8, 1995
Page 94
Bio
LEVEL 1 - 34 OF 52 STORIES
Copyright 1993 The Scotsman Publications Ltd.
The Scotsman
June 3, 1993, Thursday
LENGTH: 1880 words
HEADLINE: Funds and games with serious money
BYLINE: One Of The Currency Speculators Who Forced Last Year'S Devaluation Of
The Pound, George Soros Is Regarded As Both Bete Noir And Benefactor. Clifford
German Assesses His Track Record
BODY:
GEORGE Soros is the latest but presumably not the last in a long line of
merchant adventurers whose activities have enlivened the UK business scene.
In recent times they have included Jim Slater, Sir James Gulliver, Lord
Hanson, Gerald Ronson and Asil Nadir, altogether a motley crew, whose fortunes
ultimately have been no more than mixed.
A preference for speculation and asset stripping rather than solid company
building proved the Achilles heel for many but in recent years, even those in
the latter category have proved vulnerable to problems caused by overambition
and overborrowing at prolonged high interest rates.
Their opposite numbers in the US which include Bunker Hunt, TBoone Pickens,
Carl Icahn, Ivan Boesky and Michael Milliken have an equally chequered history.
Some have settled down as tycoons but the majority have come to grief
through overambition and the temptation to cut corners, financial, ethical and
even legal.
George Soros became a household name overnight last September when it became
known that he was the spearhead of the army of faceless speculators who backed
their determination and the length of their pockets against the Treasury and the
Bank of England, and won.
He sold sterling not in millions but in billions, selling money which even
he did not have, draining the Bank of England's reserves of foreign currency and
sapping the Chancellor's political will to defend the pound until the Chancellor
admitted defeat and devalued.
Soros then bought back the sterling at the new low rate and pocketed a
profit of around 20 per cent on every penny he had originally sold, netting a
personal profit of anything from $ 1 billion to as much as $ 2 billion,
according to rumour and legend which no one has denied.
It was a truly colossal gamble, but Soros had correctly assessed the growing
pressures on the UK economy and the weakness of the Government's political
position in the face of an unending recession, universally blamed on excessive
interest rates needed to defend an overvalued pound which was making UK goods
Page 95
The Scotsman, June 3, 1993
uncompetitive.
Soros calculated the odds and made his move, more like a chess player than a
poker player.
Characteristically, he admits that his actions may not have been in the best
interests of the UK Government, but refuses to accept any moral responsibility
for bringing down the pound, telling the Guardian recently: "If I abstain from
certain actions because of moral scruples then I cease to be an effective
speculator."
Fame, if fame it is, has come relatively late in life.
Soros has actually been around a long time.
Born in Budapest in 1930, as a Jew he and his family went into hiding in
wartime Hungary, a period which he subsequently described as "exciting", before
fleeing from communist persecution in postwar Hungary in 1947 to study
philosophy and economics at the London School of Economics, training as a
merchant banker in the Fifties and then establishing himself as a freelance
international trader with bases in London and New York.
His personal investment vehicle, the Quantum Fund, is based in the Dutch
Antilles and has an estimated $ 7 billion under management.
Success has made him a fashionable figure and a man to follow.
When he bought Sir James Gulliver's stake in Newmont Mining, the US based
gold mining company, a few weeks ago, the financial world, almost to a man,
decided that Soros knew something they did not and bought gold, sending the
price of the metal which has been in the doldrums for a decade rocketing from $
330 an ounce to $ 390 in a matter of weeks.
Yesterday he invested #30 million in British Land, one of the four biggest
listed property companies in the UK and put up half the cash for a #500 million
fund to buy up cheap UK properties in anticipation of an upturn in the property
market, which has been deeply depressed by the recession, culminating in the
collapse of Canary Wharf last year.
British Land shares immediately leapt 15 per cent, adding #100 million to
the company's value on the stock exchange yesterday.
But Soros is anything but a barrowboy.
He is said to be more of a scholar than a speculator, with tasteful homes
well furnished with works of art, and the accent and manners of a man of letters
in the old Austro Hungarian empire.
He is a thinker/philosopher with a penchant for dividing the world into
"open" societies, which are in command of their own destiny and "closed"
societies at the mercy of a tyrant or ideology.
He is suitably appalled at the way in which western governments have made
aid to former communist economies conditional on the adoption of western style
market economies when it is patently obvious that they have neither the
Page 96
The Scotsman, June 3, 1993
knowledge nor the resources to do so.
Recently, he has used his wealth and influence consistently to try and
promote the development of free market economies and political pluralism in what
was Eastern Europe and the Soviet Union, targeting what he sees as key areas
which will otherwise create bottlenecks in the process of development and
reform.
For example, he recently financed training in London for wouldbe literary
agents in the belief that it was an essential step in the promotion of
intellectual freedom in the former Soviet Union.
He also donated 800 photocopiers for public libraries and institutes in
Hungary.
In another imaginative gesture he set up a $ 100million fund to support
Soviet scientists and help them resist the temptation to go and work for
governments in countries like Iran and Iraq on projects which bode little good
for humanity.
HE has shrugged off criticism from stridently anti Semitic right wing groups
who regard him as an unwanted invader looking for opportunities to make
financial killings and take advantage of the political weakness of former
communist economies.
Soros Foundations have been established in his native Hungary, Poland and
Romania.
He went personally to Romania in the weeks after the overthrow of the
dictator Ceaucescu and visited former Yugoslavia earlier this year.
He came away with the clear conclusion that Serbians are engaged in genocide
with the backing of President Milosevic which the West is too timid to oppose.
Singlehanded, he has given $ 50 million to Bosnia, for use by the UNHCR
through voluntary groups such as Save the Children and Oxfam, half as much as
the entire UK government commitment to that unfortunate region.
He repels criticism by quietly making the point: "How much money I make
determines how much I give away. I'm stepping up my philanthropy at the moment
because I've made a lot of money in the last two years."
And "I became a philanthropist only after I became a speculator."
Netting billions: George Soros relaxes on the tennis court when he is not
speculating on the world's money markets
GRAPHIC: DAVID O'NEILL THE MAIL ON SUNDAY
LANGUAGE: ENGLISH
LOAD-DATE: December 3, 1994
Talking Points
Meeting with Soros
Thank Soros for agreeing to the meeting.
Acknowledge the work of the Soros Foundation in this country
and around the world (for example, his recent announcement
to establish the Emma Lazarus Fund to help legal
immigrants).
Thank him for his contribution to the campaign (per Lynn).
Talk about your observations on your recent trip to Central
and Eastern Europe, particularly the work of foundations in
building civil society.
-- Pleased that you could hold a meeting in Budapest at
the Central European University, which Soros founded in
1989.
-- Get his insights on what's happening there and what
is needed in his view.
-- Mention that you were pleased that John Fox of his
office could attend the recent meeting you convened
with foundation leaders and government officials on how
to work together more effectively on Central Europe and
NIS issues.
-- You might want to touch on Bosnia, which is a
special concern of his.
[Soros has invested heavily in independent media ventures in the
former Communist countries. He believes that civil societies are
fragile and that we need to send strong signals that NGO's are
critical to democracy. He's also troubled about government "exit
strategies" that make foundations vulnerable. Soros feels
strongly about the importance of "freedom support fellowships,"
which have not been receiving the level of support they should.]
Note that you're pleased that he will be providing
significant resources to monitor how the welfare reform bill
is being implemented in the states.
[Fyi, the Administration managed to save $30 million in the FY97
DHHS Appropriations for monitoring and research. It's not clear
how these dollars are going to get used yet, but there may be
"partnership" possibilities.]
THE NEW YORK TIMES
WEDNESDAY, OCTOBER 2, 1996
Immigrants' Burden
mental Security benefits: about
By George Soros
900,000 are likely
use rood stamps.
Legal immigrants represent only
about 5 percent of those on public aid,
n the last seven years, I have
yet they are absorbing more than 40
I
devoted considerable energy
percent of the cuts in welfare.
to support the creation of
Immigrants have always pulled
open societies in the former
their weight. Except for the right to
Soviet bloc. In those coun-
vote, legal immigrants have enjoyed
tries, the meaning of open so-
the same rights and shared the same
ciety was easy to explain: It was the
responsibilities as
opposite of Communism. Open soci-
serve in the military. They contrib-
ety was the United States, a country
ute more in taxes than they receive
characterized by a reliance on the
in benefits. Denying them the safety
rule of law, a democratically elected
net they help pay for is neither neces-
government, a diverse culture and
sary nor fair, and it breaks with a
respect for people who are different.
long and proud tradition of treating
The truth, of course, was always
legal immigrants as future citizens
more complicated. Yet the image
who are assets, rather than as non-
and the ideal were inspiring, and
citizen aliens who are a burden.
they remain so to this day.
More than half of the legal immi-
Legal immigrants - refugees flee-
ing religious and political persecu-
tion, family members wanting to be
reunited with loved ones, young en-
trepreneurs with talent and drive -
Congress pays for
have long come to America seeking a
the welfare law.
fair chance to contribute and, in the
process, have enriched our culture
and strengthened the nation.
with an injustice.
Yesterday, Congress began taking
away much of that fair chance when
the new welfare law went into effect.
It will bar most legal immigrants,
grants who will lose their benefits
including permanent residents and
have lived in the country for more
refugees granted asylum, from re-
than five years and are likely eligible
ceiving food stamps and Supplemen-
for naturalization. More than one mil-
tal Security Income, which benefits
lion residents are expected to apply
the elderly and the disabled. Legal
for citizenship this year. Yet in taking
immigrants will also be denied wel-
fare and Medicaid benefits in their
benefits awav from struggling immi-
first five years in the country.
grants we are adding yet another ob-
According to the Congressional
stacle to those they already face in
Budget Office, more than 500,000 im-
applying for citizenship, including
migrants are likely to lose Supple-
learning
the test
and paying processing fee
There is no question that the wel-
George Soros is an international fi-
fare system needs to be reformed so
nancier. On Monday he founded the
that it moves people from dependency
Emma Lazarus Fund, which aids
to work. But to do so we must spend
legal immigrants.
more
less, in the short
term, because creating work requires
increased public investment and
spending on job training - for citizens
and legal immigr ants. Depriving legal
immigrants creates false savings at
the cost of perpetrating an injustice.
As an immigrant and naturalized
United States citizen, I have a deep
sympathy for all those who come to
America in search of a better life. I
have prospered, but I know that we all
need a helping hand at some time in
our lives. After World War II, I left
Hungary and stayed in England for
several years, working as a railroad
porter. I broke my leg and was taken
care of, free of charge, by the National
Health Service. I depended on govern-
ment assistance.
If immigrants to America suffer
similar misfortunes, if they cannot
work or find a decent-paying job and
their families are starving, where will
they turn for help? In the answer lies
our identity as people and as a na-
tion.
Page 2
LEVEL 1 - 1 OF 52 STORIES
Copyright 1996 Times Mirror Company
Los Angeles Times
October 2, 1996, Wednesday, Home Edition
SECTION: Metro; Part B; Page 9; Op Ed Desk
LENGTH: 505 words
HEADLINE: RELIGHTING A LAMP OUTSIDE AMERICA'S DARKENING DOOR
BYLINE: GEORGE SOROS, a Wall Street financier and philanthropist who, emigrated
to England from Hungary in 1947 and to the United States in, 1956, donated $50
million this week to help legal immigrants hurt by the, new welfare law. This
was his statement Monday on establishing the fund
BODY:
Up until now, most of my philanthropy has been directed to helping build open
societies in Central and Eastern Europe and the former Soviet Union. But
recently I have come to feel that the values of open society are in disrepair in
the United States, so I have embarked upon a broader program of giving here.
One of the most urgent needs, I believe, is presented by the attacks on legal
immigrants embodied in recent congressional legislation. As an immigrant to the
United States and a naturalized American citizen, I have deep sympathy for those
who come to this country in search of a better life. Therefore, I am appalled by
Congress' recent action to deny vital public assistance to noncitizens who are
lawfully resident in this country.
As a result of recent legislation, at least 1 million legal immigrants stand
to lose benefits such as food stamps, Aid to Families With Dependent Children
and other federal benefits. Moreover, states are now permitted, if not
encouraged, to impose further restrictions, barring noncitizens from programs
that care for the disabled and combat domestic violence and child abuse. In many
cases, these immigrants are paying the same taxes as other Americans. Legal
immigrants are also eligible to be drafted in wartime.
The United States has always led the world in welcoming immigrants. That
proud tradition is now is question. The Statue of Liberty embraces those
"yearning to breathe free," but the current mean-spirited attack on immigrants
threatens to choke them. I cannot stand idly by and watch this happen.
Therefore, I am today announcing the first major initiative of the Open
Society Institute's new U.S. program: the Emma Lazarus Fund, an emergency
commitment of $ 50 million, available immediately and to stay in place as long
as necessary. Named for the poet whose words adorn the Statue of Liberty, the
bulk of the fund will be used for direct assistance to legal immigrants.
The Emma Lazarus Fund will focus on three areas of activity. First, in
appropriate instances, it will pay the cost of applying for citizenship for
Page 3
Los Angeles Times, October 2, 1996
legal immigrants who wish to become naturalized Americans; second, it will
assist community and social service organizations that help legal immigrants by
providing English-language instruction and other services that help them
qualify for citizenship; finally, the fund will assist organizations conducting
efforts, both in the courts and through public education campaigns, on the
issues of naturalization and immi- gration.
I do not believe that an open society requires open borders. But what is at
stake here is justice: equal treatment and the rule of law, regardless of
immigration status. I hope that the Emma Lazarus Fund will make a significant
impact on the lives of thousands of immigrants, helping them as they search for
the American dream and allowing them to participate fully in American political
life. If the gesture I am making today can do that, I will consider it one of
the best investments I have made.
GRAPHIC: GRAPHIC-DRAWING: 'Legal immigrants pay taxes too.', ANN C. TELNAES,
Washington
LANGUAGE: English
LOAD-DATE: October 2, 1996
Philanthropist
THE-DETAILS
Restricting Immigrants
Pledges Aid
Through changes in welfare legislation and anticipated changes in
immigration law, Congress has imposed new restrictions on illegal
To Immigrants
immigrants and on the use of public money for illegal immigrants and
in some cases, legal immigrants.
By ERIC SCHMITT
PUBLIC ASSISTANCE Illegal immigrants will be ineligible for most
WASHINGTON, Sept. 30 George
public assistance programs financed by the Federal Government or
Soros, the Hungarian-born philan-
the states.
thropist and international financier,
They cannot receive grants, Federal contracts or loans. and will not be
said today he would give $50 million
to assist legal immigrants in the
eligible for benefits under programs like the Earned Income Tax
United States.
Credit, Supplemental Security Income, Aid to Families With
Mr. Soros said he was creating the
Dependent Children, social service block grants, Medicaid or food
new charity in response to the re-
stamps. housing, unemployment or financial aid for college.
cently enacted welfare law that
Medical emergencies will be covered. Children who are illegal
greatly restricts public benefits like
immigrants could attend Head Start or receive immunizations.
food stamps and Supplemental Secu-
rity Income for legal immigrants.
Under the welfare legislation signed into law by President Clinton in
"I am appalled by Congress's re-
August, most legal immigrants will be ineligible for many public
cent action to deny vital public as-
assistance programs.
sistance to non-citizens who are law-
fully resident in this country," Mr.
EMPLOYEE VERIFICATION PROGRAMS Pilot programs will be
Soros, a naturalized United States
established in five states with high populations of illegal immigrants so
citizen, said at a news conference.
that employers could voluntarily check the legal status of prospective
"This is a clear-cut case of injus-
workers through a Justice Department program.
tice and is contrary to this country's
Verification documents will be restricted so that employers must
proud tradition of welcoming immi-
grants," he said. Mr. Soros emigrat-
require prospective employees to produce a United States passport.
ed to England from Hungary in 1947,
alien registration card or other authorization issued by the Justice
and to the United States in 1956.
Department. Under the agreement, various other forms, like a
The money will go largely to pay
certificate of citizenship or naturalization, an unexpired foreign
for the costs of immigrants applying
passport or a birth certificate will not be acceptable.
to become naturalized United States
citizens, and to assist local and com-
EMPLOYER SANCTIONS The new immigration financing will allow for
munity organizations that provide
300 more employees a year for three years to the Immigration and
English-language classes and other
Naturalization Service. They are to be deployed to investigate the
aid to immigrants.
unlawful hiring of illegal immigrants and the smuggling of illegal
More than 1.1 million immigrants
immigrants.
have become naturalized citizens
this year, and Federal officials ex-
DISCRIMINATION The burden of proof will be raised for prospective
pect the harsh provisions in the wel-
employees who claim hiring discrimination on the basis of immigration
fare bill to push equally large num-
status, so that a job applicant will have to prove that rejection is a result
bers of legal immigrants toward citi-
of intentional discrimination.
zenship in the next few years.
The charity, called the Emma
BORDER CONTROL The number of border patrol agents will be
Lazarus Fund after the poet whose
doubled to 10,000 by 2001.
words are inscribed on the Statue of
Liberty, will also support organiza-
SMUGGLING Penalties for smuggling people into the United States will
tions conducting legal or educational
be increased for a prison term of up to 10 years.
efforts on the behalf of immigrants.
Immigrant-rights groups ex-
FRAUDULENT DOCUMENTS Criminal penalties for fraud or misuse of
pressed astonishment today at Mr.
government-issued identification documents will increase from 5 years
Soros's new project.
imprisonment to 15 years.
"We're thrilled," said Donald Ker-
win, chief operating officer for Cath-
REMOVAL OF ILLEGAL IMMIGRANTS Anyone trying to enter the country
olic Legal Immigration Network, a
without the proper documents will be subject to deportation. If
public-interest organization based in
someone seeking asylum is found to have no credible fear of
Washington. "This is probably more
persecution after an initial meeting with an officer, the person will be
money in a given year than all the
subject to removal after a hearing before an immigration judge. Such a
foundations and state bar associa-
hearing will have to take place within seven days, and there would be
tions give out. It's really shocking."
The new charity is an offshoot of
no additional appeals. Anyone suspected of terrorism will be
the Open Society Institute and other
immediately rejected.
Soros philanthropies, which spent
Only one hearing would be held and notices of removal proceedings
$350 million in 1995 mostly in coun-
no longer would be given in Spanish.
tries undergoing the transition to
democratic regimes.
Mandatory detention will be imposed on those ordered to leave the
In addition, Mr. Soros was one of
country.
the early proponents of lifting the
EXCLUSION AND DEPORTATION Anyone who represents a terrorist
siege of Sarajevo during the Bosnian
war. He proposed a $50 million aid
organization will be deported or denied entry. Any former United
plan to Bosnia in 1993, but suspended
States citizen who officially renounces citizenship to avoid paying
the offer when logistical details
taxes will not be permitted to re-enter the country. And any student
bogged down in bickering.
who violated a special non-immigrant status visa will be banned for
More recently, Mr. Soros has given
five years.
out or pledged nearly $15 million to
help change the nation's drug policy.
SPONSORING LEGAL IMMIGRANTS For those who sponsor legal
For example, Mr. Soros has advocat-
immigrants for citizenship, the income guidelines will be altered so that
ed legalizing the medical use of ma-
sponsors would have to earn more than 125 percent of the poverty
rijuana, and has been critical of ef-
level. (The poverty level, according to 1995 figures. was less than
forts to treat drug use as a crime
$15,455 for a family of four.)
rather than a medical problem.
THE NEW YORK TIMES,
TUESDAY, OCTOBER 1, 1996
GIVING
Gifts, Grants, and Good Works
LISA
The Hungarian-born financier and philanthropist George Soros on his decision to expand his charitable work
in the United States: "In Eastern Europe we were blazing the trail. Here we are joining the pack."
NEW YORK
Now Mr. Soros, whose net worth is more than $1-
FTER more than a decade of pouring billions
billion according to Forbes magazine, says he will
Soros
A
into Central and Eastern Europe, where
spend as much as he feels is necessary to make a
few donors have ventured, George Soros is
significant difference domestically. He has not stat-
joining the pack of foundation benefactors
ed how much he will give to American charities, but
in his adopted homeland-the United States.
he has pledged that the bulk of his fortune will be
Goes
The Hungarian-born financier, who has said that
used for philanthropic purposes, here and abroad.
he indulges his "messianic fantasies in giving away
To oversee his giving in this country, Mr. Soros
money," wants to deal with what he sees as some of
has hired Gara LaMarche, former associate director
the most serious social ills of this country, such as
of Human Rights Watch in New York. Their first
West
crime, bad schools, and teen-age pregnancy.
major effort will be the Center on Crime, Communi-
Since 1979, when Mr. Soros began to give college
ties and Culture, which will attempt to reduce crime
scholarships to black students in South Africa, he
and promote alternatives to incarceration.
has established a loosely linked network of autono-
mous foundations in 25 countries, with projects
'Plenty That Needs to Be Done Here'
The philanthropist looks beyond
ranging from rewriting textbooks for schoolchildren
Mr. Soros says he decided to expand his work do-
Eastern Europe to help fight
in Russia to training investigative journalists in
mestically when he became frustrated by what he
Hungary. Last year alone his philanthropies gave
sees as the United States' failure to help the coun-
the social ills of the United States
away more than $350-million-more than any other
tries of Eastern and Central Europe make the tran-
single foundation in the country.
sition to new forms of government and to new eco-
Less than $5-million of that money went to pro-
nomic systems. His says his annoyance led him to
grams focused on the United States, however. Run
reflect on the problems in this country.
By PAUL DEMKO
out of his foundation here, the Open Society Insti-
"There is plenty that needs to be done here," he
tute-New York, Mr. Soros's domestic programs were
says.
focused entirely on the improvement of care for the
But his new grant-making work in the United
dying and on alternatives to U.S. drug policies.
Continued on Page 10
- [Chronicle of Philouthropy: 9/5/96]
George Soros Expands His Philanthropic Efforts in the United States
Continued from Page 9
States will not lead him to scale
back his efforts in other parts of
the world, he'says. In fact, his Proj-
ect on an Open Society in Central
Eurasia recently established cen-
ters in five new countries.
'Not in a Unique Position'
From his 33rd-floor office here-
where down below, Central Park
looks no larger than a back yard—
Mr. Soros says not to expect the
pioneering ways that marked his
philanthropic ventures as the So-
viet Union crumbled.
"I felt that I had a greater contri-
bution to make in former Commu-
nist countries because I was in a
unique position," Mr. Soros says.
"In the United States I'm not in a
unique position. I'm just one of the
many players, and I think our ac-
tivities will be less unique. It's go-
ing to be more of a regular founda-
tion, comparable to other founda-
tions."
He adds: "In Eastern Europe we
were blazing the trail. Here we are
joining the pack."
Kevin F.F. Quigley, a former
Pew Charitable Trusts official who
has studied philanthropy in East-
ern Europe, says that, largely due
to Mr. Soros's involvement, foun-
dations have played an unprece-
dented role in assisting Eastern
and Central Europe since the col-
lapee of the Soviet Union.
ABBOTT.
FOR
THE
"He's viewed as having more
clout than Secretary of State War-
Nancy Mahon, who runs George Soros's new Center on Crime, Communities and Culture, says 1.6 million people are in prison or
ren Christopher in the region,"
jail in the United States: "Before we in 10 years look around and realize that we should not have done this, we need to take stock."
says Mr. Quigley, a guest scholar
at the Woodrow Wilson Interna-
ments in Eastern and Central Eu-
civil sector where it didn't exist be-
first round of grants, a total of
of money to big arts institutions
tional Center for Scholars in
rope bode well for what he can
fore."
more than $1-million to more than
like the Metropolitan Museum or
Washington.
achieve domestically. "He's built
The Center on Crime, Commu-
two dozen groups. (See list below.)
Lincoln Center." Mr. LaMarche
new institutions," she says. "He's
nities and Culture, along with all
says. "We're going to look for
A Good Precedent
supported the voices of innovative
of Mr. Soros's domestic programs,
Wide Range of Interests
places where we can make a differ-
Susan V. Berresford, president
people trying to improve their soci-
will be administered through the
But Mr. Soros's interests are in
ence."
of the Ford Foundation in New
eties, and he's helped create a
Open Society Institute-New York.
no way limited to crime preven-
Grants in the areas of law, merii-
York, says Mr. Soros's accomplish-
tradition of philanthropy in the
The center has just completed its
tion. In keeping with his philan-
cine, and journalism are also being
thropy around the world, he hopes
planned. Mr. Soros hopes to en-
to start programs in a wide range
courage lawyers and doctors to
As Soros Expands Grant Making in the U.S.,
of areas in the United States.
pursue careers that serve the pub-
Among them:
lic, such as providing lega! services
Public schools, particularly in
or medical treatment for poor peo-
His Anti-Crime Project Makes Its First Grants
the inner cities. Mr. Soros is espe-
ple. He also hopes to encourage
cially interested in efforts that bol-
more people from minority groups
George Soros, the philanthro-
lent offenders ($56,000 to Abra-
County Sheriff's Office, Akron,
ster training in science and tech-
to pursue careers in the press.
pist and financier who has given
ham House, Bronx, N.Y.).
Ohio).
nology, provide students with bet-
Mr. LaMarche cautions that al-
billions to charities abroad, has
The establishment of the
The development of litera-
ter access to arts programs, and get
though the institute has laid out
announced that he plans to step
Work Apprenticeship Program,
ture to be distributed to prison-
parents more involved in their
those broad areas as grant-making
up his giving in the United
an alternative to incarceration
ers and their families in eight
children's education.
priorities, exactly where and how
States.
that will provide job training to
states so they can get advice on a
Teen-age pregnancy and re-
the money will be distributed is yet
His most recent project is the
academically promising young
wide range of issues, such as
productive rights. Mr. Soros hopes
to be decided. "With respect to
Center on Crime, Communities
people who have committed felo-
how to maintain family ties dur-
to reduce the rate of teen-age preg-
some of the big items-education.
and Culture, which will support
nies ($51,900 challenge grant to
ing incarceration ($41,704 to
nancy and encourage sexual re-
arts and culture-there are choices
programs to reduce crime and
the Center for Alternative Sen-
Citizens United for the Rehabili-
sponsibility in men and boys. He
to be made," he says. "We're going
promote alternatives to incar-
tencing and Employment Serv-
tation of Errants, Kalamazoo,
also wants to support programs
to have to define our goals a little
ceration.
ices, New York).
Mich.).
that further abortion rights and in-
more precisely. All we've really
A program that helps chil-
A project to prevent prison-
crease access to birth-control de-
done at this point is identify the
$1-Million in Grants
dren cope after their fathers
ers or former inmates from con-
vices.
questions."
The center has just announced
have been sent to jail ($50,000 to
tracting AIDS and to provide peo-
Electoral politics. The Open
its first round of grants, a total of
the Osborne Association, New
ple who have the disease with
Society Institute plans to make
Fellowships for Scholars
more than $1-million to more
York).
direct services and other help,
grants and study ways to change
To further examine the ques-
than two dozen groups. Among
Development of a national
($40,000 to the New York City
how political campaigns are fi-
tions and get help developing
the projects:
violence-prevention movement
AIDS Fund).
nanced so that people who are not
grant programs and other projects,
A program to help former
involving advocacy and public-
The Center on Crime, Com-
wealthy and who do not receive
the Open Society Institute has
woman prisoners find housing
education efforts ($50,000 to the
munities and Culture is admin-
large corporate or individual con-
started a fellowship program that
and get other help so they can be
National Funding Collaborative
istered by Mr. Soros's founda-
tributions can have more success
will support scholars for up to 18
re-united with their children
on Violence Prevention, Wash-
tion, Open Society Institute-
in winning elected office. In addi-
months.
($75,000 to the Women's Prison
ington).
New York. For more informa-
tion, it will back efforts to encour-
Aryeh Neier, president of the
Association and Home in New
Expansion of a program that
tion, send inquiries to the foun-
age more people to vote.
Open Society Institute-New York.
York).
teaches medical students to
dation at 888 Seventh Avenue,
The institute also plans to help
says the foundation's domestic
A residential facility that of-
treat mentally ill inmates and
New York 10106; e-mail:
cultural organizations build audi-
agenda could change in response to
fers such services as job place-
that trains law students about
[email protected]. The founda-
ences, particularly in poor inner-
new conditions. One example he
ment and English-language in-
the needs of mentally ill defen-
tion's World-Wide Web address
city and rural neighborhoods. And
gives is the new welfare law, which
struction to first-time, non-vio-
dants ($44,000 to the Summit
is http://www.soros.org
it will aid young artists.
will transfer much of the responsi-
"We're not going to just give a lot
Continued on Page 12
George Soros Expanas HIS Giving to ackie
IN BRIEF: GIVING
Social Ills Plaguing the United States
Continued from Page 10
"Soros is showing real leader-
"When you have somebody the
bility for taking care of the poor
ship in funding this area," says
magnitude of George Soros getting
Farrakhan Denied
have to pay sales taxes on donated
goods and merchandise.
from the federal government to the
Ann L. Jacobe, executive director
involved in this area, it will bring
states.
of the Women's Prison Association
people in and give them the cover
Big Gift From Libya
Residents who opt for the
standard deduction on their tax re-
"Should we support efforts to
and Home in New York, which re-
they need to participate," says
The Nation of Islam and its lead-
turns can get a 2.75-per-cent tax
monitor how states go about assis-
ceived one of the initial grants
Leonard N. Berman, a program of-
er, Louis Farrakhan. have been
credit on donations exceeding 2 per
tance to the poor in the period
from the center. The fact is that
ficer at the Public Welfare Founda-
barred by the United States from
cent of their adjusted gross income
ahead?" Mr. Neier asks. "Should
most foundations won't touch it
tion-long one of the biggest grant
receiving a $1-billion gift and a
Kate McGuire, program director
we monitor who falls through the
with a fork." Less than 2 per cent of
makers in the criminal-justice
$250,000 award from the govern-
at the North Carolina Center for
cracks and what the consequences
grant dollars goes to crime-and-
field. "It acknowledges that it's
ment of Libya.
Nonprofits, said that although
are for American society? We
justice projects, according to a 1991
'okay' and it's 'safe' to get involved
In denying the request last
many companies were unaware of
haven't decided to do anything
report, the latest available.
in criminal-justice funding."
week. the U.S. Treasury Depart-
the sales tax, it was a disincentive
along those lines, but we're think-
Indeed, the list of foundations
ment said that financial transac-
ing about it."
Contempt for Playing It Safe
for those that did know about it.
that make grants dealing with
tions between the Libyan govern-
Because 71 per cent of North
If Mr. Soros's operations else-
criminal justice is a short one. The
Over the years, Mr. Soros has
ment and citizens of the United
Carolinians do not itemize their
where are any indication, his grant
Edna McConnell Clark Founda-
not bothered to hide his contempt
States are unlawful because Libya
deductions, she said, the tax credit
making in America could be con-
tion in New York, which has devot-
for foundations that play it safe.
is on the government's list of na-
also has the potential to stimulate-
siderable. He has pledged or given
ed about 20 per cent of its grant
He has railed against the biggest
tions that sponsor international
giving, even though the incentive
the Central European University
money to criminal-justice pro-
foundations in the United States,
terrorism. The denial said that the
is small. Someone with an adjusted
in Budapest a total of more than
charging that they are laden with
prohibition applies to charitable
gross income of $10,000 who gave
$250-million since he founded it in
bureaucracy and are unwilling to
and religious gifts.
$500 to charity, for example, would
1989. The International Science
"In the United
be self-critical.
The $1-billion had been pledged
receive a credit of $8.25.
Foundation in Moscow has re-
But even as he ticks off the prob-
ceived $115-million to provide
States I'm not in a
to the Nation of Islam by Libyan
lems he has with large founda-
leader Col. Muammar el-Qaddafi
grants for scientists in the former
unique position.
tions, Mr. Soros concedes that the
earlier this year. The $250,000
Briefly Noted
Soviet Union.
institute here-which has bal-
represents a human-rights award
The Washington Legal Founda-
I'm just one of the
looned from just 64 employees in
to Mr. Farrakhan.
tion, a conservative think tank.
More People in Jail
1994 to more than 160 today-has
many players, and
Mr. Farrakhan's organization
will provide free legal advice to
The institute's new Center on
become a bit bureaucratic itself.
submitted its request to the U.S.
people who want to create founda-
Crime, Communities and Culture
I think our
And Mr. Soros, who is 66, now
government last month. According
tions that "promote free enter-
provides an illustration of what
says he expects his foundations to
to the application, the money
prise, limited and accountable gov-
some of Mr. Soros's other domestic
activities will be
last around 10 years beyond his
would have been used in part to
ernment, entrepreneurial spirit,
programs could look like. Grants
will generally range from $5,000 to
less unique."
own death-despite years of stat-
create a National Development
patriotism, or similar principles."
ing that they would die with him
Fund "to encourage and enable
For more information, contact
$50,000, and the center hopes to
lest they stray from his original in-
black people to build homes and
Daniel Popeo, Chairman and Gen-
support everything from training
tentions.
factories and businesses, to provide
eral Counsel, Washington Legal
for prison guards to programs that
grams for more than 18 years,
While he worries about how the
jobs and hope, to make inner-city
Foundation, 2009 Massachusetts
look at the impact of film and tele-
is deciding whether to continue
domestic programs will develop,
deserts bloom."
Avenue, N.W., Washington 20036;
vision on violence.
spending on such efforts. The Z.
Mr. Soros says he wants them to be
(202)
588-0302.
Macy's
West
is
The project will focus on the con-
Smith Reynolds Foundation in
run without much oversight by
sequences of having a growing
him.
N.C. Legislation
starting a new grant program for
Winston-Salem. N.C., which fo-
AIDS charities. About 10 per cent of
number of Americans in prisons
cused for 12 years on alternatives
"I am off the line of the actual
and jails, on civil rights for both
to incarceration in the state,
decision making in my business
May Stimulate Giving
the profits from the San Francisco-
based department-store chain's an-
prisoners and victims of crime, and
dropped its program in 1992 to
and I want to get off the line of the
The North Carolina General As-
nual Passport fashion show and
on children who are at risk of be-
spend more on crime-prevention
decision making in the foundation
sembly last month approved legis-
fund raiser will be distributed to
coming criminals.
projects.
as well," he says. "I want to create
lation intended to increase charita-
groups in Arizona, California, Ne-
"When you have such a large
The lack of attention to criminal
an organization that can function
ble giving.
vada and Texas, as well as in the
population incarcerated," Mr.
justice by grant makers could
without me. In the business I have
Under the new law, which takes
cities of Minneapolis, St. Paul, and
Soros says, "One has to question
change because of Mr. Soros's
achieved that. In the foundation I
effect January 1:
Albuquerque, N.M. For more in-
the policy that leads to that."
work, some experts say.
am on my way."
Businesses will no longer
formation, call (800) 287-7426.
Nancy Mahon, a former director
of research, policy, and planning at
the Osborne Association in New
3 Universities Get Large Donations; Other Recent Gifts
York, which provides services to
prisoners and their families, has
Three universities have received
versity's largest scholarship fund,
pand the emergency department, where
to endow the Ralph J. Baudhuin Oral
been hired to run the center.
big gifts:
worth $1.9-million. Mrs. Meyer-
his son had emergency brain surgery
School, which serves children with
two years ago.
learning disorders.
She points out that 1.6 million
Louisiana State University in
the widow of Herbert Meyer, for-
American School of Classical Studies at
Springfield Library & Museums Association
people in the United States are in
Baton Rouge has been given $15-
mer president of Interboro News
Athens (Greece): $1,500,000 from an
(III): $1,000,000 from Audrey Geisel of
prison or jail-triple the number
million by E. J. Ourso, a Louisiana
Company and a 1924 graduate of
anonymous donor for graduate fellow.
La Jolla, Cal., widow of the author
businessman and an alumnus.
ships.
Theodor Seums Geisel, to build the Dr
that were incarcerated just 15
Syracuse's business school-speci-
Armstrong State College (Ga.): $1,300,000
Seuse memorial at a square shared by
years ago.
Syracuse University in New
fied that half of the estate gift be
bequest from the estate of Eleanor Boyd
four museums.
"Before we in 10 years look
York has received $12-million
put into her scholarship fund and
of Savannah, Ga., a music teacher, for
Stanford U. (Cal.): $3,000,000 from Pet.
around and realize that we should
from the estate of Ruth Freeman
that half be used as the university
scholarships for women.
B. Dooley, founder of Paget Leasing
Benedictine College (Kan.): $2,000,000
San Francisco, and his wife, Linda
not have done this," Ms. Mahon
Meyer of New York City, a 1924
saw fit. The university said it
from Bud and Richard Cray of Atchison,
establish a trust for the research
says, "we need to take stock."
alumna.
would put the money toward its
Kan., and Kansas City, Mo., respective-
gram of the Hoover Institution.
Bradley University in Peoria,
$300-million "Commitment to
ly, whose late father, Cloud, founded
Tennessee Technological U.: $1.00
Approach to Crime Issue
Midwest Grain Products, for a new cen-
life-insurance policy from Robert I
III., has won $10-million from Hen-
Learning" campaign, to raise mon-
ter in entrepreneurial studies.
son of Albertville, Ala. a financial
The institute is taking a broad
ry P. Slane, retired chief executive
ey for academic programs and fac-
Centre College (My.): $1,600,000 bequest
ner at ms Financial Corporation, f
approach to the crime issue. The
officer of the Peoria Journal Star.
ulty members.
from the estate of E. Golladay LaMotte
School of Agriculture. The unive
Mr. Ourso, who founded Securi-
of Hopkinsville, Ky., a farmer, for schol-
will receive the money upon his de
first round of grants includes
Mr. Slane, a Yale University
arships and dormitory improvements.
U. of Mississippi: $1,000,000 from Ja
$44,000 for a program in Akron,
ty Industrial Insurance in Donald-
graduate, said Bradley could use
Comell U. (N.Y.): $1,000,000 from Theo-
M. McMullan of Chicago, an in
Ohio, that trains medical students
sonville, La., and who ran funeral
his gift in any way it saw fit. The
dore W. Kheel of New York. a lawyer
ment banker, and his wife, Made!
homes and cemeteries, earmarked
and arbitrator, for the Center for Labor
to treat mentally ill inmates, as
university said it would use part of
for two professorships at the Cente
Management Documentation and Ar-
the Study of Southern Culture.
well as $41,700 for a group in Kal-
his gift for Louisiana State's busi-
the money to support its communi-
chives at the School of Industrial and
U. of Nevada at Las Vegas: $5,000,0
amazoo, Mich., that produces liter-
ness school. The university re-
cations and fine-arts college, which
Labor Relations
from William S. Boyd of Las Vega.
ature for prisoners and their fam-
named the graduate school the
has been renamed the Henry Pin-
Indians U. at South Bend: $1,200,000 from
chairman of Boyd Gaming Corporation,
Darwin Wiekamp of Mishawaka, Ind.,
for the proposed law school.
ilies on topics such as maintaining
E. J. Ourso College of Business Ad-
dell Slane College of Communica-
chief executive officer of Valley Ameri-
U. of St. Thomas (Minn.): $2,500,000 from
family ties while incarcerated.
ministration.
tions and Fine Arts. Another por-
can Bank and Trust Company, and his
David Koch of Long Lake, Minn., chair-
The center will also offer full
Mr. Ourso asked that the money
tion of the money would be used to
wife, Dorothy, to equip a new classroom
man of Graco Inc., and his wife, Barba-
building.
ra, for a chair in Catholic studies and
scholarships to students who are
be used to create endowed profes-
endow a communications-technol-
Middle Tennessee State U.: $3,634,839 be-
scholarships for students majoring in
interested in criminal justice. Two
sorships, scholarships, and the
ogy fund, a professorship, and
quest from the estate of John Miller of
Catholic studies.
students at the New York Univer-
Marjory B. Ourso Center for Excel-
scholarships for financially needy
Lewisburg, Tenn., a highway developer,
Woods Hole Oceanographic Institution
sity School of Law will be the first
lence in Teaching (named for Mr.
students-all in Mr. Slane's name.
and his wife, Mary, to endow chairs in
(Mass.): $5,000,000 from Gratia (Topsy)
equine reproductive physiology and in
R. Montgomery of South Dartmouth,
recipients, but the program will
Ourso's wife).
Other recent gifts:
equine health
Mass., granddaughter of the late mys-
eventually be expanded to cover
Mrs. Meyer, who died in Febru-
Nove Southeastem U. (Re.): $2,500,000
tary writer Mary Roberts Rinehart and
such other professions as econom-
Alexandria Hospital (Va.): $1,000,000 from
ary at age 93, was a long-time do-
bequest from the estate of Maurine
daughter of the late Alan G. Rinehart, a
Hubert Hoffman of Alexandria, a real-
Weir of Pompano Beach, Fla., 8-
producer at Paramount. to endow the
ics and psychology.
nor to Syracuse, creating the uni-
estate developer, to renovate and ex-
founder of American Finance Systems,
Coastal Research Center.
Page 6
LEVEL 1 - 3 OF 52 STORIES
Copyright 1996 Council on Foreign Relations, Inc.
Foreign Affairs
September, 1996 /October, 1996
SECTION: COMMENTS; Pg. 8
LENGTH: 3301 words
HEADLINE: Can Europe Work?
A Plan to Rescue the Union
BYLINE: George Soros; GEORGE SOROS, sole proprietor of Soros Fund Management,
which serves as principal investment adviser to the Quantum Group of Funds, is
Chairman of the Soros Foundations, a network of foundations operating in 25
countries.
BODY:
The future of Europe has become a very complicated and technical subject,
although it really ought to be very simple. We need a strong and viable European
Union. Without it, the world would be back where it was at the end of the First
World War. Indeed, the map of Europe today looks largely as it did in 1919, but
with one big difference 15 countries of Western Europe are linked in the
European Union.
Its creators brought a union into existence to prevent a recurrence of war,
particularly one between Germany and France. For 45 years it has been successful
in this mission. But the collapse of the Soviet empire and the reunification of
Germany upset the delicate balance. Chancellor Helmut Kohl wanted to ground a
united Germany firmly in Europe, and the French insisted on creating a stronger
union to contain a larger Germany. Margaret Thatcher objected and her successor
as British prime minister, John Major, exacted heavy concessions but there was a
sense of urgency, a selfimposed deadline, as leaders of the member states
reached a new agreement for Europe. The Treaty on European Union was initialed
in the Dutch city of Maastricht in December 1991 and signed two months later.
Maastricht established three pillars for what was now to be styled the
European Union: a common currency, a common foreign and security policy, and a
common justice and internal policy. Along with this, member states acknowledged
that to fulfill its mission the EU must open itself to eastward expansion and
admit in a timely fashion countries that qualified. That should have been the
end of the story and we should be living happily ever after, with a new
institution for a new world. But there is something profoundly wrong in Europe.
The Maastricht Treaty is a flawed document and the European Union we have is
not the one we need. The people of Europe barely accepted the treaty in national
referendums, and in the five years since it was concluded, dissatisfaction with
the Union has turned to alienation. Brussels has become a bureaucrat's dream;
its legalistic, ever more complicated structure is foreign to the spirit of an
open society. High unemployment, a pressing problem across the continent, is
widely blamed on the economic convergence criteria Maastricht set for the
introduction of the common currency. There is no common foreign policy. Europe's
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role in Bosnia has become a never-ending source of bickering, failure, and
humiliation and a violation of all the principles for which Europe stands. Where
has the Union gone wrong? First I shall examine the common currency, then
Maastricht's other two pillars and the enlargement process, all of which stand
on shaky ground.
E PLURIBUS EURO
Europe needs a common currency. A common market cannot survive in the long run
without one because currency markets are notoriously unstable and currency
speculation, especially the trend-following variety, can have a destabilizing
effect on the economies involved. There are those, particularly in the City of
London, who would argue that currency disturbances are short-lived by nature and
currency overshoots correct themselves, so that equilibrium is reestablished.
But exchange rates do not tend toward equilibrium because they themselves are
one of the factors the equilibrium is supposed to reflect. I don't quite know
what the equilibrium is, but I do know that it would be different depending on
the value of the currencies concerned. Currency fluctuations can disrupt trade
relations, as the tensions created by the abrupt fall in value of the Italian
lira in 1994-95 demonstrated. In sum, a single market will prove unsustainable
without a single currency.
The method chosen to establish the common currency, however, is fundamentally
flawed. The Maastricht Treaty lays out the exact criteria that all countries
must meet before they can adopt the euro, and the precise timetable for meeting
them. It makes some allowances for the vagaries of reality, but demonstrates a
basic lack of understanding of the way economies function and the role economic
policy should play. Concerned with specifying the conditions that would ensure
the stability of the common currency, Maastricht assumes that these can be
attained through a continuous process of convergence among the economies of EU
countries. Underlying it all is an erroneous equilibrium theory of economics.
John Maynard Keynes showed that full employment is not the natural outcome of
a market equilibrium. To bring about full employment, an economy needs
government policies specifically designed for the purpose. Some of these may not
be sustainable in the long run. Keynes' favorite prescription, fiscal
stimulation through increased government spending, no longer works, since
financial markets have developed an allergic reaction to such increases. If he
were alive today Keynes would prescribe a different remedy, but he would
understand that the invisible hand wall not get us to a happy equilibrium.
Consider the specific problem Europe faces. It has once again entered a
period of high unemployment, similar to the 1930s. There is general agreement
that employment is too heavily taxed and labor markets are too rigid in Western
Europe. With employers' social security contributions and personal taxation each
at around 50 percent of gross wages, the combined tax burden on net wages of 50
is 100. Severance payments are onerous as well. No wonder employers are
reluctant to offer permanent employment and a significant portion of the labor
force is out of work.
The stimulation of aggregate demand a la Keynes is no longer practical, but
devising other measures would not be too difficult. Almost everyone agrees that
labor markets need to be liberalized, the social security system needs to be
reformed, and taxation on employment needs to be reduced. It would be best to
reduce government expenditures and taxes on employment at the same time. That
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would stimulate the economy and open the way to a more thoroughgoing reform of
the social security system, including an increase in the retirement age as a
second step. French President Jacques Chirac should have insisted on such a
policy after his election in May 1995, and Kohl ought to adopt one now, as he
is trying to put together an economic reform package. But neither is following
this path because the Maastricht criteria constrain them: any tax cuts would
increase the budget deficit in 1997, the benchmark year under the treaty. It is
therefore very unlikely that Europe will see any effective policies to reduce
unemployment before the common currency's introduction.
In all likelihood the euro will be introduced in 1999 as specified in the
timetable, for the simple mason that Kohl is determined to introduce it and has
the political ability to make it happen. His mandate in the March 24 elections
in Baden-Wurttemberg state is likely to carry him through 1999, but he cannot
afford any delay. Even the Bundesbank has no stomach for resistance, largely
because it now realizes that its present policies have led Germany into a deep
recession from which there is no easy way out. But this creates a dangerous
situation. People will direct all their anger and resentment over unemployment
at the single currency. There may well be a political revolt particularly in
France, notorious for such rebellions -- and it would likely take a
nationalistic, anti-European direction.
The danger could be averted, but that would require the German and French
governments to flout the Maastricht criteria; to be effective, they should do so
in tandem. There is nothing in the Maastricht Treaty to prevent a modification
of criteria for admission to the new currency regime. And recall that the
criteria apply only at the time of admission; afterward, the treaty calls for
the coordination of fiscal policies, with penalties for those who violate the
rules, but the rules are left to be worked out. Why not start with a coordinated
stimulus program right now? The beneficial effects, if such a policy is
introduced now, are sure to be felt by 1998, so that the euro would make its
appearance against the background of an improving economy.
If leaders wait to try to reduce unemployment until after the currency's
introduction, it may be too late, especially if it turns out that the
governments are unable to coordinate their fiscal policies. The EU may fall
victim to economic orthodoxy, beloved of central bankers, who will wield great
influence in the new arrangements. Here too there are disturbing echoes of the
interwar period, when, in Keynes' words, the economy of Great Britain was
sacrificed on the altar of the gold standard.
The economy is too important to leave to central bankers. With exchange rates
permanently fixed and monetary policy under the European central banks control,
national governments will have few policy instruments at their disposal. If they
follow diverging fiscal policies, the monetary union could be endangered by
individual governments' pursuit of irresponsible courses. That is why Maastricht
set limits on government deficits and the accumulation of government debt. But
if those limits are fixed in advance and forever, governments have no room for
maneuver.
Economies need to be managed, and economies tied together by a common
currency also need a common fiscal policy. The Maastricht Treaty sidestepped
that issue by fixing only the entry requirements. But if the governments
involved cannot take concerted steps now to combat unemployment, it is doubtful
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Foreign Affairs, September, 1996
they will be able to do so later. In that case, it may be better not to have a
common currency at all because mounting popular discontent would likely sweep
away present policies, including the single currency.
POLITICS AMONG NATIONS
The second and third pillars of Maastricht a common foreign and security
policy and a common justice and internal policy have barely begun to function
because they have been left to an intergovernmental process and governments
always put their own interests ahead of any common interest. Where member
countries have delegated their sovereignty by treaty, namely in the Common
Market, the arrangements have been effective. But on the second and third
pillars of Maastricht there has been little delegation of sovereignty, and
cooperation between the member governments does not work. As for EU enlargement,
the Inter-Governmental Conference, which Maastricht set up to handle the issue,
instructing it to begin a preparatory review this year, has made little
progress. And even with the new Europe's first pillar -- economics leaving
common fiscal policy to the intergovernmental process may endanger the
arrangements for a common currency.
As currently constituted, the European Union's structure is part of the
problem. The Eu consists of a central bureaucracy, the European Commission,
which is responsible to 15 national bureaucracies and so multiplies the sins of
national bureaucracies by a factor of 15. There is a Council of Ministers, where
foreign ministers or their deputies represent the national interests of the
constituent states. And there is a directly elected European Parliament, which
has practically no powers. The net result is an almost complete absence of a
common policy and a rising inability to reconcile conflicting interests.
Consider enlargement. The countries of Central and East Europe desperately
need to get closer to the European Union. Although communism is well and truly
dead, the patterns of thought and behavior learned in a closed society linger,
and the institutions and attitudes of an open society are not yet firmly
established. Without the prospect of joining the open society of Europe, the
countries of the region could fall back on the kinds of arrangements they are
familiar with. Since communism is no longer acceptable, they are liable to turn
to some form of nationalism. For people to mobilize behind a nationalist cause,
the nation must be endangered. If there is no real threat, one must be invented,
but there are plenty of genuine grievances to exploit in Central and East Europe
because the communist system suppressed all ethnic and nationalist aspirations.
Yugoslavia is a case in point.
The way things are going, the terms of admission for formerly communist
states will not be decided on before the end of the century. Since it is almost
impossible for the Inter-Governmental Conference to make headway working with
the present British government, it will probably have to await the outcome of
British elections, likely to take place around next April; the conference would
then not finish before the end of 1997. Preparations for the introduction of the
single currency will consume 1998, so negotiations on the admission of new
members will probably start in earnest only in 1999.
Regrettably, the enlargement of NATO is likely to proceed more rapidly. The
problems of Central and East Europe require political integration and economic
prosperity, not the extension of military alliances. The countries of the region
need political, moral, and economic assurance that they are indeed part of the
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West and the world of open societies. To give them armies and military alliances
instead misconstrues the threat. In fact, the expansion of NATO can easily turn
into a self-fulfilling prophecy, generating the very dangers against which it is
meant to defend.
Enlargement of the EU last year to 15 members has already made the
intergovernmental process more unwieldy, and further enlargement will render it
completely unworkable. Take only one example. The presidency rotates among the
member nations every six months. After enlargement there could be several years
in succession when tiny countries like Luxembourg and Malta hold the presidency;
voting rights will have to be modified, because if individual countries or a
small group of countries can exercise a veto, reaching any decision will be
difficult. But it is also hard for a country to relinquish its sovereign rights
to a collection of other countries knowing that those countries are guided by
their own interests, not by any common interest.
The Inter-Governmental Conference mechanism entrusts the solution of these
problems to the parties responsible for creating them namely, the member
governments. What ought to happen in the EU is for decision-making power to be
taken away from the governments. After all, sovereignty rests with the people.
Any further delegation of sovereignty should come directly from them, not
through the governments. And the EU, as a truly supranational authority, ought
in turn to be accountable to the elected representatives of the people rather
than to the constituent governments.
There is a Catch-22. People have lost their trust in European institutions
because of the way those institutions work. They are less willing to delegate
sovereignty, even if that might make the institutions more effective. One might
hope for a major reform initiative from the European Parliament, but that body
is not accustomed to taking the initiative. One might hope for greater public
participation and public debate, but the issues confronting the
Inter-Governmental Conference are highly technical and its deliberations are
private.
The European Union has the potential to become the prototype of an open
society. That is what makes it so desirable, so attractive as an ideal,
particularly for the people of Central and East Europe. Open societies are based
on the recognition that human understanding is imperfect and all constructs and
institutions are flawed to a greater or lesser degree. But the Union has been
shaped by bureaucrats, particularly French bureaucrats, and they are not known
for their humility. They, better than most, recognize the deficiencies of
institutions, which is why they are anxious to impose rigid conditions and a
rigid timetable so that the institutions should move forward, however
deficient they are. This method has been effective; starting with the European
Coal and Steel Community, bureaucrats with vision have used it to build the
European Union brick by brick. But in the effort to meet deadlines and
conditions, the basic tenet of open society -- that there are bound to be flaws
in the design has gotten lost.
THE END OF THE CIRCLE
It is possible to fix the exact date when the vicious circle of bureaucratic
rigidity and public disaffection began: November 9, 1989, the day the Berlin
Wall fell. Until then, the European Community bureaucracy could cope reasonably
well. For instance, it set a target well in advance for the integration of
financial markets in 1992, and the operation was a great success. But the events
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in Berlin pushed Europe from near-equilibrium into a state of dynamic
disequilibrium. It was the triumph of open society over totalitarian ideology.
This revolutionary change should have sparked a revolutionary response. But the
governments and people of Europe failed to rise to the occasion. Germany was
willing to pay for the reintegration of East Germany -- indeed, it paid too
much but the rest of Europe was not. And Europeans were certainly not
prepared to make any sacrifice to help the newly independent countries of the
Soviet empire make the transition to an open society. If they had been, it would
have united Europe in a way the common currency never will.
Matters were left in the hands of bureaucrats, and bureaucrats are notorious
for their incapacity to handle revolutionary change. European integration
entered a phase resembling the boom-bust so often observed in financial markets.
The boom manifested itself in the Maastricht Treaty, and the turning point came
half a year later with the treaty's narrow defeat in the June 1992 Danish
referendum. Europe could have rallied to the cause, but instead the Danish
defeat led to the breakdown of the European Exchange Rate Mechanism that
September. Europe has been disintegrating ever since.
The trend toward disintegration, however, may be ready to be reversed. The
first sign was the Baden-Wurttemberg elections in March. Six months ago I would
have bet that the introduction of the single currency would be delayed and
perhaps deferred indefinitely. I am now willing to bet it will take place on
time, even if the convergence criteria have to be modified. A more stable and
strongly proEuropean government has come to power in Italy, and a Labour
government in Britain may soon play a more constructive role in Europe. More
important, there is a widespread feeling that the disintegration of Europe has
gone far enough. People have been profoundly affected by the tragedy of Bosnia.
That is a sentiment on which it is possible to build.
The bureaucratic method of building an integrated Europe has exhausted its
potential. The Inter-Governmental Conference should convene a Constitutional
Assembly; the people of Europe should be mobilized to bring that about. A
Constitutional Assembly would not be empowered to appropriate further slices of
national sovereignty without first obtaining the approval of each of the member
countries. The new constitution would come into effect only after, say,
three-quarters of the national parliaments approved it; in those court tries
that rejected it, it would be submitted to a referendum. There would be no
delegation of powers without authorization. But the Constitutional Assembly
would be able to resolve the problems the Inter-Governmental Conference cannot
resolve, and engage the people of Europe in the process. Only a bold measure,
clarifying the nature and identity of the European Union, can stop the gradual
disintegration of Europe and prevent a return to the conditions prevailing
between the world wars.
GRAPHIC: Photos 1 and 2, A taste of the single currency: euro coin specially
minted for a test run in France this year. REUTERS/ARCHIVE
LANGUAGE: ENGLISH
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The New York Times
January 15, 1996, Monday, Late Edition - Final
SECTION: Section D; Page 6; Column 1; Business/Financial Desk
LENGTH: 301 words
HEADLINE: Soros Plans to Finance Project To Develop Internet in Russia
BYLINE: AP
DATELINE: MOSCOW, Jan. 14
BODY:
George Soros, the financier, announced plans today to finance a new project
for developing the Internet in Russia, and also said he would begin investing
selectively here again after pulling out of most of his holdings in 1994.
Despite his renewed interest in Russia, Mr. Soros also warned at a news
conference that he considered Russia's investment situation "extremely
precarious" ahead of presidential elections in June.
Mr. Soros said last month he was cautiously investing in Russia again. He
said the potential rewards were so great that they justified the considerable
risk but he would not say which sectors he was interested in, nor how much money
he was investing.
He said his philanthropic budget for Russia in 1996 would total about $22
million.
The $1.5 million Internet plan would link hospitals, museums, schools and
scientific institutes across Russia to the global computer network. Several
Russian computer networks already offer Internet access, but use is limited
outside major cities.
Mr. Soros's International Science Foundation has already invested $800
million in telecommunications development in Moscow, Novosibirsk and Yaroslavl.
The return by Mr. Soros to the Russian market is seen as a lift for
reformers, who are struggling in the face of a resurgent Communist Party and a
wave of nationalist sentiment which has pushed many Western investors away.
But Mr. Soros cautioned that a Communist presidential victory could make him
again reconsider his Russian investments.
"It will become very difficult to function" if Russia returns to a
"Bolshevik" system of government, Mr. Soros said.
"I don't share the opinions of those who are sanguine about the elections,"
he said. "If there is a change in president, there could be a substantial change
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The New York Times, January 15, 1996
FOCUS
in Russia. "
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Copyright 1995 The Washington Post
The Washington Post
July 16, 1995, Sunday, Final Edition
SECTION: OP-ED; Pg. C07
LENGTH: 1001 words
HEADLINE: This Is the Moment of Truth
BYLINE: George Soros
BODY:
What is at stake now is not just Bosnia but the future of the Western
alliance.
U.N. intervention in Bosnia has been a dismal failure. It was driven by two
contradictory impulses. One was not to be seen doing nothing when the horrors of
ethnic cleansing were revealed on television; the other was to avoid military
intervention at all costs. The solution, devised by clever British diplomats,
was to introduce U.N. peacekeepers where there was no peace to keep. Their
mission was to deliver humanitarian aid to the civilian population, but their
function was to serve as hostages to prevent Western military action.
The mission was impossible to carry out because assaulting the civilian
population is an essential part of the Bosnian Serbs' military strategy. They
manipulated UNPROFOR much as Nazi Germany used KAPOs in the concentration camps.
Having to maintain a neutral stance in the midst of continuous aggression
against the civilian population was an humiliating and debilitating experience
for the U.N. troops and for the United Nations itself. When finally the United
Nations called for NATO air strikes, its troops were taken hostage, fulfilling
their original purpose.
The only success the United Nations could claim is that it helped keep most
of the civilian population alive in the so-called "safe havens" through two long
winters, but the claim is somewhat hollow. The eastern enclaves -- Gorazde, Zepa
and Srebrenica -- were rendered militarily indefensible, and Bihac was not
resupplied at all, inducing the Bosnians to embark on their ill-fated attempt to
break the siege. Sarajevo airport has been closed by Serbian forces at will, and
recently all supplies had to go by a land route kept open by the Bosnian army.
I have been actively involved in keeping Sarajevo alive through my $ 50
million gift in December 1992 and subsequent donations. The only supply of water
and electricity currently available in Sarajevo was installed by Fred Cuny, our
disaster expert who is now missing in Chechnya.
President Clinton was right in dissociating the United States from the
policies pursued by our European allies and looking for an alternative approach,
although he allowed himself to be dissuaded much too easily when he was told
that Bosnia is a European problem. He also did the right thing when he promised
U.S. assistance through NATO for extricating the peacekeepers if and when it
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became necessary.
Now that Srebrenica has been overrun and ethnically cleansed, the moment of
truth has arrived. French President Chirac, the only Western statesman who bears
no responsibility for the present state of affairs, is ready to face the truth.
He is prepared to defend militarily the remaining "safe areas" and lift the
siege of Sarajevo. He is calling for British and French ground troops and for
essential U.S. helicopter airlift, air cover and logistic support. The
alternative is French withdrawal and collapse of the U.N. mission. Now that he
has put a specific action plan on the table, there is no reason to doubt his
word.
There is a clear rift between the French and the British. The British are
sticking with the failed policy they initiated. President Clinton has the power
to determine which course prevails. By prevaricating, he is in effect siding
with the British.
President Clinton should seize the opportunity to endorse the French
initiative, tell Prime Minister John Major that he is doing so and ask for
congressional approval. Congress, which has been trying to help the Bosnians
protect themselves by lifting of the arms embargo on Bosnia, should be
sympathetic to the president's request. Public opinion, which has been lulled
into passivity, cannot fail to be aroused by the latest atrocities.
On the other hand, if President Clinton continues to prevaricate, the French
will withdraw, triggering the American commitment to put ground troops into
Bosnia. This course would risk many more American lives than would supporting
President Chirac's initiative. For the president to renege on that obligation
would deal a fatal blow to NATO and U.S. credibility. Either way, Sen. Dole's
criticism of President Clinton's stance on Bosnia would be fully justified.
Firm action at this juncture could still reverse the outcome of the Bosnian
conflict. In terms of manpower and motivation, the Bosnian government troops
already have the upper hand. There are only some 600,000 people left in
Serb-occupied territory out of the 1.5 million Serbs who lived in Bosnia before
the war. By contrast, there are more than 2 million people in Bosnian
government-controlled territory, of which some 150,000 are Serbs. The Serbian
side has scored military victories only because it used heavy weapons, supplied
by the Yugoslav army, to attack civilians in the .N.-designated "safe areas.
Bosnian Serb forces may be able to cause a collapse of the Bosnian government by
driving a horde of refugees in front of them. But if they are stopped now and
the arms embargo is lifted, time will work against them, and they know it. They
will have to settle or lose.
Assisting the French would risk American lives, but avoiding loss of life at
any price is not a viable policy, as Bosnia amply demonstrates. Already more
U.N. troops have died in Bosnia than in the Persian Gulf War. How much better to
provide aerial and logistic support for an action that may succeed than to
provide ground troops for withdrawal after defeat.
What is at stake now is not just Bosnia but the future of the Western
alliance. President Chirac is right in drawing a parallel with the appeasement
of Hitler in the 1930s. Failure in Bosnia would encourage aggressors just as the
failure of the League of Nations in Abyssinia did in the run-up to the Second
World War. President Clinton is facing the most critical test of his presidency.
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The writer, an international financier and philanthropist, donated $ 50
million in 1992 to assist the humanitarian aid situation in Bosnia.
GRAPHIC: Photo, ap
LANGUAGE: ENGLISH
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Copyright 1989 The Washington Post
The Washington Post
July 7, 1989, Friday, Final Edition
SECTION: EDITORIAL; PAGE A17
LENGTH: 928 words
HEADLINE: How to Help Poland
BYLINE: George Soros
BODY:
When the heads of state meet in Paris later this month, they will have Poland
on the agenda. It will be one item out of many, and there is a danger that they
will miss an opportunity that comes along only once in a great while.
Poland is at a critical juncture, both politically and economically. The
conflict between the Communist state and the civil society which had kept the
country paralyzed for the past decade has been superseded by a social contract.
Free elections were held, in which the Communists were decisively rejected, but
in accordance with the contract, Solidarity has only 35 percent of the Sejm and
does not control the government. The leadership on both sides has to contend
with hardliners in their own parties as well as general disaffection among the
population. They must produce positive results in the economy so that the
peaceful transition to a democratic form of government may endure. Both sides
have entered into their historic compromise in the firm expectation that the
West will help in engineering an economic turnaround.
After a decade of paralysis, the economy is extremely run down; and after the
wage concessions of the past year, inflation is spinning out of control. The
rise in prices can be expected to exceed 300 percent in the next 12 months, and
if the free market rate of the dollar is any guide, hyperinflation is just
around the corner. Moreover, the external debt has continued to accumulate and
now approaches $ 40 billion. Around three-quarters of this amount is due to
official creditors represented by the Paris Club and one-quarter to the
commercial banks, represented by the London Club. The disparity has arisen
because Poland has paid the interest on its commercial debt in full while paying
practically nothing to the Paris Club. This has caused considerable resentment
among Treasury officials who are in charge of the Paris Club, while it has kept
the free market price of the bank debt, currently around 38 percent, higher than
it would be otherwise.
The dire economic situation has a positive aspect; it would not need a great
deal of resources to turn it around. At the current free market rate of
exchange, the budget deficit, which is the engine of inflation, is in the region
of $ 1 billion. Existing economic structures have become so dysfunctional that
there would be little resistance to a complete restructuring of the economy.
Moreover, both the government and Solidarity are not only receptive but
positively eager for radical change. A trade union agitating for a return to
capitalism sounds unbelievable to Western ears; yet that is the case in Poland
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today. A moment's reflection will show that a solvent employer is in the best
interests of the employee -- especially in Poland, where the state is both
morally and financially bankrupt.
The stage is set for a radical new departure. Both sides in Poland are ready
for it, but the Western governments seem to lack the vision that would make it
possible. There is no need for a large infusion of money the amounts involved
are relatively modest and become quite insignificant when considered in the
context of our defense spending. What is needed is Western engagement in the
Polish reform process and a commitment to see it through to a successful
conclusion. This is a case where outside involvement is necessary to bring about
internal reform because only an external obligation can justify the dislocations
that a radical reform would entail. That has been the mechanism driving the
European Common Market. In the case of Poland, the external obligation is
readily at hand: the international debt.
I have proposed a kind of macro-economic debt: an equity conversion program
in which Polish state enterprises would be converted into joint stock companies
and a portion of the shares would be used as one of the elements in a debt
reorganization scheme. This long-term restructuring of the Polish economy and of
the Polish debt would be combined with a short-term monetary stabilization
program in which the International Monetary Fund and the World Bank would play
their roles.
My proposal was received enthusiastically in Poland both the government
and the economic experts of Solidarity have endorsed it but it encountered a
much more reserved attitude among Western officials. Many of the objections can
be ascribed to bureaucratic caution the IMF finds the situation in Poland too
chaotic for initiating a program, and most governments seem to prefer a
step-by-step approach, extending all aid short of help. But there is one
objection that I must acknowledge as substantive: any debt reorganization scheme
that disturbs the status quo of the Paris Club debt creates a precedent that
could be used by other countries. The problem can be delayed because the actual
debt reorganization would not take place for at least three years, but it cannot
be avoided forever. The question arises whether the Western governments should
avoid doing something real in order to preserve a fiction: nobody can claim the
Polish debt is worth 100 cents on the dollar. In any case, there is much more at
stake than just the debt. There has been no instance yet of successful economic
reform in a Communist country; success in Poland would influence the entire
region.
It is to be hoped that heads of state can put matters into the right
perspective and hand down the appropriate instructions to their bureaucracies.
The writer is president of Soros Fund Management. His firm has funds in Hungary,
Poland and the Soviet Union.
GRAPHIC: PHOTO, GEN. WOJCIECH JARUZELSKI AND LECH WALESA AT THE OPENING OF THE
NEW POLISH SENATE THIS WEEK. AP
LANGUAGE: ENGLISH
freedores
GIVING
Gifts, Grants, and Good Works
LISA
The Hungarian-born financier and philanthropist George Soros on his decision to expand his charitable work
in the United States: "In Eastern Europe we were blazing the trail. Here we are joining the pack."
NEW YORK
Now Mr. Soros, whose net worth is more than $1-
FTER more than a decade of pouring billions
A
billion according to Forbes magazine, says he will
Soros
into Central and Eastern Europe, where
spend as much as he feels is necessary to make a
few donors have ventured, George Soros is
significant difference domestically. He has not stat-
joining the pack of foundation benefactors
ed how much he will give to American charities, but
in his adopted homeland-the United States.
he has pledged that the bulk of his fortune will be
Goes
The Hungarian-born financier, who has said that
used for philanthropic purposes, here and abroad.
he indulges his "messianic fantasies in giving away
To oversee his giving in this country, Mr. Soros
money," wants to deal with what he sees as some of
has hired Gara LaMarche, former associate director
the most serious social ills of this country, such as
of Human Rights Watch in New York. Their first
West
crime, bad schools, and teen-age pregnancy.
major effort will be the Center on Crime, Communi-
Since 1979, when Mr. Soros began to give college
ties and Culture, which will attempt to reduce crime
scholarships to black students in South Africa, he
and promote alternatives to incarceration.
has established a loosely linked network of autono-
The philanthropist looks beyond
mous foundations in 25 countries, with projects
'Plenty That Needs to Be Done Here'
ranging from rewriting textbooks for schoolchildren
Mr. Soros says he decided to expand his work do-
Eastern Europe to help fight
in Russia to training investigative journalists in
mestically when he became frustrated by what he
Hungary. Last year alone his philanthropies gave
sees as the United States' failure to help the coun-
the social ills of the United States
away more than $350-million-more than any other
tries of Eastern and Central Europe make the tran-
single foundation in the country.
sition to new forms of government and to new eco-
Less than $5-million of that money went to pro-
nomic systems. His says his annoyance led him to
By PAUL DEMKO
grams focused on the United States, however. Run
reflect on the problems in this country.
out of his foundation here, the Open Society Insti-
"There is plenty that needs to be done here," he
tute-New York, Mr. Soros's domestic programs were
says.
focused entirely on the improvement of care for the
But his new grant-making work in the United
dying and on alternatives to U.S. drug policies.
Continued on Page 10
George Soros Expands His Philanthropic Efforts in the United States
Continued from Page 9
States will not lead him to scale
back his efforts in other parts of
the world, he'says. In fact, his Proj-
ect on an Open Society in Central
Eurasia recently established cen-
ters in five new countries.
'Not in a Unique Position'
From his 33rd-floor office here-
where down below, Central Park
looks no larger than a back yard—
Mr. Soros says not to expect the
pioneering ways that marked his
philanthropic ventures as the So-
viet Union crumbled.
"I felt that I had a greater contri-
bution to make in former Commu-
nist countries because I was in a
unique position," Mr. Soros says.
"In the United States I'm not in a
unique position. I'm just one of the
many players, and I think our ac-
tivities will be less unique. It's go-
ing to be more of a regular founda-
tion, comparable to other founda-
tions."
He adds: "In Eastern Europe we
were blazing the trail. Here we are
joining the pack."
Kevin F.F. Quigley, a former
Pew Charitable Trusts official who
has studied philanthropy in East-
ern Europe, says that, largely due
to Mr. Soros's involvement, foun-
dations have played an unprece-
dented role in assisting Eastern
and Central Europe since the col-
lapse of the Soviet Union.
"He's viewed as having more
JOHN ABBOTT. FOR THE CHRONICLE
clout than Secretary of State War-
Nancy Mahon, who runs George Soros's new Center on Crime, Communities and Culture, says 1.6 million people are in prison or
ren Christopher in the region,"
jail in the United States: "Before we in 10 years look around and realize that we should not have done this, we need to take stock."
says Mr. Quigley, a guest scholar
at the Woodrow Wilson Interna-
ments in Eastern and Central Eu-
civil sector where it didn't exist be-
first round of grants, a total of
of money to big arts institutions
tional Center for Scholars in
rope bode well for what he can
fore."
more than $1-million to more than
like the Metropolitan Museum or
Washington.
achieve domestically. "He's built
The Center on Crime, Commu-
two dozen groups. (See list below.)
Lincoln Center," Mr. LaMarche
new institutions," she says. "He's
nities and Culture, along with all
says. "We're going to look for
A Good Precedent
supported the voices of innovative
of Mr. Soros's domestic programs,
Wide Range of Interests
places where we can make a differ-
Susan V. Berresford, president
people trying to improve their soci-
will be administered through the
But Mr. Soros's interests are in
ence."
of the Ford Foundation in New
eties, and he's helped create a
Open Society Institute-New York.
no way limited to crime preven-
Grants in the areas of law, medi-
York, says Mr. Soros's accomplish-
tradition of philanthropy in the
The center has just completed its
tion. In keeping with his philan-
cine, and journalism are also being
thropy around the world, he hopes
planned. Mr. Soros hopes to en-
to start programs in a wide range
courage lawyers and doctors to
As Soros Expands Grant Making in the U.S.,
of areas in the United States.
pursue careers that serve the pub-
Among them:
lic, such as providing legal services
Public schools, particularly in
or medical treatment for poor peo-
His Anti-Crime Project Makes Its First Grants
the inner cities. Mr. Soros is espe-
ple. He also hopes to encourage
cially interested in efforts that bol-
more people from minority groups
George Soros, the philanthro-
lent offenders ($56,000 to Abra-
County Sheriff's Office, Akron,
ster training in science and tech-
to pursue careers in the press.
pist and financier who has given
ham House, Bronx, N.Y.).
Ohio).
nology, provide students with bet-
Mr. LaMarche cautions that al-
billions to charities abroad, has
The establishment of the
The development of litera-
ter access to arts programs, and get
though the institute has laid out
announced that he plans to step
Work Apprenticeship Program,
ture to be distributed to prison-
parents more involved in their
those broad areas as grant-making
up his giving in the United
an alternative to incarceration
ers and their families in eight
children's education.
priorities, exactly where and how
States.
that will provide job training to
states so they can get advice on a
Teen-age pregnancy and re-
the money will be distributed is yet
His most recent project is the
academically promising young
wide range of issues, such as
productive rights. Mr. Soros hopes
to be decided. "With respect to
Center on Crime, Communities
people who have committed felo-
how to maintain family ties dur-
to reduce the rate of teen-age preg-
some of the big items-education,
and Culture, which will support
nies ($51,900 challenge grant to
ing incarceration ($41,704 to
nancy and encourage sexual re-
arts and culture-thereare choices
programs to reduce crime and
the Center for Alternative Sen-
Citizens United for the Rehabili-
sponsibility in men and boys. He
to be made," he says. "We're going
promote alternatives to incar-
tencing and Employment Serv-
tation of Errants, Kalamazoo,
also wants to support programs
to have to define our goals a little
ceration.
ices, New York).
Mich.).
that further abortion rights and in-
more precisely. All we've really
A program that helps chil-
A project to prevent prison-
crease access to birth-control de-
done at this point is identify the
$1-Million in Grants
dren cope after their fathers
ers or former inmates from con-
vices.
questions."
The center has just announced
have been sent to jail ($50,000 to
tracting AIDS and to provide peo-
Electoral politics. The Oper
its first round of grants, a total of
the Osborne Association, New
ple who have the disease with
Society Institute plans to make
Fellowships for Scholars
more than $1-million to more
York).
direct services and other help,
grants and study ways to change
To further examine the ques-
than two dozen groups. Among
Development of a national
($40,000 to the New York City
how political campaigns are fi-
tions and get help developing
the projects:
violence-prevention movement
AIDS Fund).
nanced so that people who are not
grant programs and other projects,
A program to help former
involving advocacy and public-
The Center on Crime, Com-
wealthy and who do not receive
the Open Society Institute has
woman prisoners find housing
education efforts ($50,000 to the
munities and Culture is admin-
large corporate or individual con-
started a fellowship program that
and get other help so they can be
National Funding Collaborative
istered by Mr. Soros's founda-
tributions can have more success
will support scholars for up to 18
re-united with their children
on Violence Prevention, Wash-
tion, Open Society Institute-
in winning elected office. In addi-
months.
($75,000 to the Women's Prison
ington).
New York. For more informa-
tion, it will back efforts to encour-
Aryeh Neier, president of the
Association and Home in New
Expansion of a program that
tion, send inquiries to the foun-
age more people to vote.
Open Society Institute-New York,
York).
teaches medical students to
dation at 888 Seventh Avenue,
The institute also plans to help
says the foundation's domestic
A residential facility that of-
treat mentally ill inmates and
New York 10106; e-mail:
cultural organizations build audi-
agenda could change in response to
fers such services as job place-
that trains law students about
[email protected]. The founda-
ences, particularly in poor inner-
new conditions. One example he
ment and English-language in-
the needs of mentally ill defen-
tion's World-Wide Web address
city and rural neighborhoods. And
gives is the new welfare law, which
struction to first-time, non-vio-
dants ($44,000 to the Summit
is http://www.soros.org
it will aid young artists.
will transfer much of the responsi-
"We're not going to just give a lot
Continued on Page 12
George Soros Expands His Giving to Tackle
IN BRIEF: GIVING
Social Ills Plaguing the United States
Continued from Page 10
"Soros is showing real leader-
"When you have somebody the
Farrakhan Denied
have to pay sales taxes on donatec
bility for taking care of the poor
ship in funding this area," says
magnitude of George Soros getting
goods and merchandise.
from the federal government to the
Ann L. Jacobs, executive director
involved in this area, it will bring
Big Gift From Libya
Residents who opt for the
states.
of the Women's Prison Association
people in and give them the cover
standard deduction on their tax re
"Should we support efforts to
and Home in New York, which re-
they need to participate," says
The Nation of Islam and its lead-
turns can get a 2.75-per-cent ta
monitor how states go about assis-
ceived one of the initial grants
Leonard N. Berman, a program of-
er, Louis Farrakhan, have been
credit on donations exceeding 2 pe:
tance to the poor in the period
from the center. "The fact is that
ficer at the Public Welfare Founda-
barred by the United States from
cent of their adjusted gross income
ahead?" Mr. Neier asks. "Should
most foundations won't touch it
tion-long one of the biggest grant
receiving a $1-billion gift and a
Kate McGuire, program directo:
we monitor who falls through the
with a fork." Less than 2 per cent of
makers in the criminal-justice
$250,000 award from the govern-
at the North Carolina Center fc
cracks and what the consequences
grant dollars goes to crime-and-
field. "It acknowledges that it's
ment of Libya.
Nonprofits, said that althoug
are for American society? We
justice projects, according to a 1991
'okay' and it's 'safe' to get involved
In denying the request last
many companies were unaware
haven't decided to do anything
report, the latest available.
in criminal-justice funding."
week, the U.S. Treasury Depart-
the sales tax, it was a disincentiv
Indeed, the list of foundations
ment said that financial transac-
for those that did know about it.
along those lines, but we're think-
ing about it."
that make grants dealing with
Contempt for Playing It Safe
tions between the Libyan govern-
Because 71 per cent of Nort:
criminal justice is a short one. The
Over the years, Mr. Soros has
ment and citizens of the United
Carolinians do not itemize the
If Mr. Soros's operations else-
where are any indication, his grant
Edna McConnell Clark Founda-
not bothered to hide his contempt
States are unlawful because Libya
deductions, she said, the tax cred
making in America could be con-
tion in New York, which has devot-
for foundations that play it safe.
is on the government's list of na-
also has the potential to stimulate
siderable. He has pledged or given
ed about 20 per cent of its grant
He has railed against the biggest
tions that sponsor international
giving, even though the incentiv.
money to criminal-justice pro-
foundations in the United States,
terrorism. The denial said that the
is small. Someone with an adjuste
the Central European University
in Budapest a total of more than
charging that they are laden with
prohibition applies to charitable
gross income of $10,000 who gav
$250-million since he founded it in
bureaucracy and are unwilling to
and religious gifts.
$500 to charity, for example, woul
1989. The International Science
"In the United
be self-critical.
The $1-billion had been pledged
receive a credit of $8.25.
Foundation in Moscow has re-
But even as he ticks off the prob-
to the Nation of Islam by Libyan
ceived $115-million to provide
States I'm not in a
lems he has with large founda-
leader Col. Muammar el-Qaddafi
tions, Mr. Soros concedes that the
earlier this year. The $250,000
Briefly Noted
grants for scientists in the former
unique position.
institute here-which has bal-
represents a human-rights award
The Washington Legal Founda
Soviet Union.
I'm just one of the
looned from just 64 employees in
to Mr. Farrakhan.
tion, a conservative think tank
More People in Jail
1994 to more than 160 today-has
Mr. Farrakhan's organization
will provide free legal advice t.
The institute's new Center on
many players, and
become a bit bureaucratic itself.
submitted its request to the U.S.
people who want to create founds
Crime, Communities and Culture
I think our
And Mr. Soros, who is 66, now
government last month. According
tions that "promote free enter
provides an illustration of what
says he expects his foundations to
to the application, the money
prise, limited and accountable go:
some of Mr. Soros's other domestic
activities will be
last around 10 years beyond his
would have been used in part to
ernment, entrepreneurial spiri:
own death-despite years of stat-
create a National Development
patriotism, or similar principles
programs could look like. Grants
less unique."
will generally range from $5,000 to
ing that they would die with him
Fund "to encourage and enable
For more information, contac
$50,000, and the center hopes to
lest they stray from his original in-
black people to build homes and
Daniel Popeo, Chairman and Ger
support everything from training
tentions.
factories and businesses, to provide
eral Counsel, Washington Lega
for prison guards to programs that
grams for more than 18 years,
While he worries about how the
jobs and hope, to make inner-city
Foundation, 2009 Massachuset:
look at the impact of film and tele-
is deciding whether to continue
domestic programs will develop,
deserts bloom."
Avenue, N.W., Washington 20036
spending on such efforts. The Z.
Mr. Soros says he wants them to be
(202) 588-0302.
Macy's West
vision on violence.
The project will focus on the con-
Smith Reynolds Foundation in
run without much oversight by
Winston-Salem, N.C., which fo-
him.
N.C. Legislation
starting a new grant program fo
AIDS charities. About 10 per cent
sequences of having a growing
number of Americans in prisons
cused for 12 years on alternatives
"I am off the line of the actual
May Stimulate Giving
the profits from the San Francisco
and jails, on civil rights for both
to incarceration in the state,
decision making in my business
based department-store chain's ar
dropped its program in 1992 to
and I want to get off the line of the
The North Carolina General As-
nual Passport fashion show ar.
prisoners and victims of crime, and
on children who are at risk of be-
spend more on crime-prevention
decision making in the foundation
sembly last month approved legis-
fund raiser will be distributed
coming criminals.
projects.
as well," he says. "I want to create
lation intended to increase charita-
groups in Arizona, California, N.
"When you have such a large
The lack of attention to criminal
an organization that can function
ble giving.
vada and Texas, as well as in th
population incarcerated," Mr.
justice by grant makers could
without me. In the business I have
Under the new law, which takes
cities of Minneapolis, St. Paul, ar
Soros says, "One has to question
change because of Mr. Soros's
achieved that. In the foundation I
effect January 1:
Albuquerque, N.M. For more
the policy that leads to that."
work, some experts say.
am on my way."
Businesses will no longer
formation, call (800) 287-7426.
Nancy Mahon, a former director
of research, policy, and planning at
the Osborne Association in New
3 Universities Get Large Donations; Other Recent Gifts
York, which provides services to
prisoners and their families, has
Three universities have received
versity's largest scholarship fund,
pand the emergency department, where
to endow the Ralph J. Baudhuin O:
his son had emergency brain surgery
School, which serves children
been hired to run the center.
big gifts:
worth $1.9-million. Mrs. Meyer-
two years ago.
learning disorders.
She points out that 1.6 million
Louisiana State University in
the widow of Herbert Meyer, for-
American School of Classical Studies at
Springfield Library & Museums Associati
Baton Rouge has been given $15-
mer president of Interboro News
Athens (Greece): $1,500,000 from an
(III.): $1,000,000 from Audrey Geisel
people in the United States are in
anonymous donor for graduate fellow-
La Jolla, Cal., widow of the auth
prison or jail-triple the number
million by E. J. Ourso, a Louisiana
Company and a 1924 graduate of
ships.
Theodor Seuss Geisel, to build the D
that were incarcerated just 15
businessman and an alumnus.
Syracuse's business school-speci-
Armstrong State College (Ga.): $1,300,000
Seuss memorial at a square shared
years ago.
Syracuse University in New
fied that half of the estate gift be
bequest from the estate of Eleanor Boyd
four museums.
of Savannah, Ga., a music teacher, for
Stanford U. (Cal.): $3,000,000 from Pet
"Before we in 10 years look
York has received $12-million
put into her scholarship fund and
scholarships for women.
B. Dooley, founder of Paget Leasing
around and realize that we should
from the estate of Ruth Freeman
that half be used as the university
Benedictine College (Kan.): $2,000,000
San Francisco, and his wife, Linda
not have done this," Ms. Mahon
Meyer of New York City, a 1924
saw fit. The university said it
from Bud and Richard Cray of Atchison,
establish a trust for the research
says, "we need to take stock."
alumna.
would put the money toward its
Kan, and Kansas City, Mo., respective-
gram of the Hoover Institution.
ly, whose late father, Cloud, founded
Tennessee Technological U.: $1,00
Bradley University in Peoria,
$300-million "Commitment to
Midwest Grain Products, for a new cen-
life-insurance policy from Robert I
Approach to Crime Issue
III., has won $10-million from Hen-
Learning" campaign, to raise mon-
ter in entrepreneurial studies.
son of Albertville, Ala., a financial
The institute is taking a broad
ry P. Slane, retired chief executive
ey for academic programs and fac-
Centre College (Ky.): $1,600,000 bequest
ner at IDS Financial Corporation, f
from the estate of E. Golladay LaMotte
School of Agriculture. The unive
approach to the crime issue. The
officer of the Peoria Journal Star.
ulty members.
of Hopkinsville, Ky., a farmer, for schol-
will receive the money upon his de
first round of grants includes
Mr. Ourso, who founded Securi-
Mr. Slane, a Yale University
arships and dormitory improvements.
U. of Mississippi: $1,000,000 from Ja
$44,000 for a program in Akron,
ty Industrial Insurance in Donald-
graduate, said Bradley could use
Comell U. (N.Y.): $1,000,000 from Theo-
M. McMullan of Chicago, an in
Ohio, that trains medical students
sonville, La., and who ran funeral
his gift in any way it saw fit. The
dore W. Kheel of New York, a lawyer
ment banker, and his wife, Madel
and arbitrator, for the Center for Labor
for two professorships at the Cente
to treat mentally ill inmates, as
homes and cemeteries, earmarked
university said it would use part of
Management Documentation and Ar-
the Study of Southern Culture.
well as $41,700 for a group in Kal-
his gift for Louisiana State's busi-
the money to support its communi-
chives at the School of Industrial and
U. of Nevada at Las Vegas: $5,000,0
amazoo, Mich., that produces liter-
cations and fine-arts college, which
Labor Relations.
from William S. Boyd of Las Vega
ness school. The university re-
has been renamed the Henry Pin-
Indiana U. at South Bend: $1,200,000 from
chairman of Boyd Gaming Corporatic
ature for prisoners and their fam-
named the graduate school the
Darwin Wiekamp of Mishawaka, Ind.,
for the proposed law school.
ilies on topics such as maintaining
E. J. Ourso College of Business Ad-
dell Slane College of Communica-
chief executive officer of Valley Ameri-
U. of St. Thomas (Minn.): $2,500,000 fre
family ties while incarcerated.
ministration.
tions and Fine Arts. Another por-
can Bank and Trust Company, and his
David Koch of Long Lake, Minn., cha
wife, Dorothy, to equip a new classroom
man of Graco Inc., and his wife, Bart.
The center will also offer full
Mr. Ourso asked that the money
tion of the money would be used to
building.
ra, for a chair in Catholic studies a:
scholarships to students who are
be used to create endowed profes-
endow a communications-technol-
Middle Tennessee State U.: $3,634,839 be-
scholarships for students majoring
interested in criminal justice. Two
sorships, scholarships, and the
ogy fund, a professorship, and
quest from the estate of John Miller of
Catholic studies.
students at the New York Univer-
Marjory B. Ourso Center for Excel-
scholarships for financially needy
Lewisburg, Tenn., a highway developer,
Woods Hole Oceanographic Instituti
and his wife, Mary, to endow chairs in
(Mass.): $5,000,000 from Gratia (Top:
sity School of Law will be the first
lence in Teaching (named for Mr.
students-all in Mr. Slane's name.
equine reproductive physiology and in
R. Montgomery of South Dartmou:
recipients, but the program will
Ourso's wife).
Other recent gifts:
equine health.
Mass., granddaughter of the late my
Nova Southeastem U. (Fla.): $2,500,000
tery writer Mary Roberts Rinehart a
eventually be expanded to cover
Mrs. Meyer, who died in Febru-
Alexandria Hospital (Va.): $1,000,000 from
bequest from the estate of Maurine
daughter of the late Alan G. Rinehar
such other professions as econom-
ary at age 93, was a long-time do-
Hubert Hoffman of Alexandria, a real-
Weir of Pompano Beach, Fla., co-
producer at Paramount, to endow L
ics and psychology.
nor to Syracuse, creating the uni-
estate developer, to renovate and ex-
founder of American Finance Systems,
Coastal Research Center.