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feles Ros 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 Page 7 Foreign Affairs, September, 1996 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 Page 8 Foreign Affairs, September, 1996 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 Page 9 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 Page 10 Foreign Affairs, September, 1996 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 Page 11 Foreign Affairs, September, 1996 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 LOAD-DATE: August 26, 1996 Page 3 6TH STORY of Focus printed in FULL format. Copyright 1996 The New York Times Company 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 Page 4 The New York Times, January 15, 1996 FOCUS in Russia. " LANGUAGE: ENGLISH LOAD-DATE: January 15, 1996 Page 53 LEVEL 1 - 13 OF 52 STORIES 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 Page 54 The Washington Post, July 16, 1995 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. Page 55 The Washington Post, July 16, 1995 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 COUNTRY: BOSNIA & HERZEGOVINA; LOAD-DATE: July 16, 1995 Page 128 LEVEL 1 - 44 OF 52 STORIES 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 Page 129 The Washington Post, July 7, 1989 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.