For Baltimore, Uncommon Gift From Unorthodox Source

BALTIMORE At first glance they seem an unlikely couple: George Soros, the
globe traveling billionaire financier and philanthropist, and Kurt L.
Schmoke, this city's cautious, bespectacled three term mayor.

The two have met only once, and Soros has never been to Baltimore.

But it is here that the Hungarian born Soros, who like Schmoke (D) supports
liberalization of U.S. drug policy, has decided to focus some of his largely
international philanthropy on a social policy experiment in his adopted
country.

Known best as a foreign currency speculator and for donating hundreds of
millions of dollars to educational and other institutions in former Soviet
bloc countries, Soros will pump $25 million over the next five years into
Baltimore's battered urban landscape for a range of drug treatment, job
training and other programs, some of them controversial and not fully
proven.

But that is, in large part, what brought Soros and Schmoke together: a
common interest in looking at new and unorthodox solutions to old problems.

Soros's $25 million commitment came after the men met in February at a
dinner gathering in Soros's Fifth Avenue apartment in New York. Soros, who
was already considering Baltimore as a target of his philanthropy, had
invited the mayor and key members of his staff to discuss a wide range of
drug policy issues and related topics. The meeting sealed Soros's decision
to select Baltimore for the first satellite office of his New York based
Open Society Institute.

Detailed plans for the $25 million have not been developed, but a local
board will propose programs for funding, said Diana Morris, director of the
satellite office, which opened in September. The list likely will include an
array of educational and social programs designed to head off drug addiction
and criminal activity and will supplement money already in the pipeline to
bolster a system of "managed care" that would provide treatment on demand
for addicts.

"I expect the board to be open to alternative concepts . . . with an
emphasis on treatment" rather than law enforcement, Morris said.

Such initial programs underpin Soros's and Schmoke's view of drug abuse as
more a public health issue than a law enforcement problem. Schmoke is
careful to note that he expects his police department to continue cracking
down on "the real predators, on the distributors and on the violent
enforcers."

But critics are concerned that the programs' approaches to the drug problem
may be precursors to a harder push for decriminalization of drugs, a goal
that both Soros and Schmoke have publicly said society should consider. Both
have drawn fire from law enforcement hard liners, who believe that their
philosophies will weaken the fabric of American society, and from some
addiction experts, who say that the more a drug is available, the more
people will use it and get in trouble.

Schmoke made history in 1989 as one of the first big city mayors in the
United States to declare that the war on drugs has been lost. Since then, he
has established a needle exchange program in Baltimore, increased funding
for drug treatment, encouraged experimental treatments such as acupuncture
and pushed for a "drug court" with authority to divert drug users from jail
to treatment.

Both he and Soros have urged a national debate on "medicalizing" drug abuse
by allowing closely controlled prescription of some hard drugs to addicts as
part of a treatment and crime reduction strategy, similar to programs in
Switzerland and the Netherlands.

For that, Soros once tabbed the "Daddy Warbucks of drug legalization"
has found a kindred soul in Schmoke, whom he recently praised for "his
courageous stand on the drug problem." He said he valued Schmoke's "openness
to new ideas," a recurrent theme in Soros's conversations and writings.

Drug policy aside, for Schmoke there are other risks involved in having
Soros associated with Baltimore. Despite his largesse, Soros has his critics
in the financial world, some in high places. He has made billions
speculating in foreign currencies and has been accused by Great Britain and
other countries of destabilizing their money markets. But the earnings from
those enterprises have fueled his philanthropic projects, including more
than $1 billion in help for Russia, his native Hungary and other former
Soviet bloc countries.

Although Soros and Schmoke had not met before February, each knew of the
other through various organizations that promote alternatives to handling
the nation's drug problem, especially the Lindesmith Center, a drug policy
research organization in New York funded by Soros.

Soros, 67, who has directed some money overseas to drug treatment, is now
making a challenge of U.S. drug policy one of his first domestic interests
"because it is one of the most clear cut cases of irrational policy," said
Soros spokesman Michael Vachon. "The war on drugs was supposed to cure the
ills, but it's had the unintended consequence of creating even greater
harms" mass incarcerations, disruption of families and inadequate funding
for drug treatment.

Schmoke contends that the failure of the drug wars is graphically evident in
Baltimore. Even with the imprisonment of thousands of dealers and users,
this city of 700,000, like Washington and other cities, continues to stagger
under the impact of drugs street violence, low school performance, high
dropout rates, soaring teenage pregnancy and still has an estimated
40,000 to 50,000 illicit substance abusers on the streets.

Soros's initiative in Baltimore is part of his ambitious crusade to fashion
in the United States a version of his "open society" concept in eastern
Europe: fostering an acceptance of new ideas or alternatives for solving
societal problems.

"It also means that any formal organization, including Open Society, has
deficiencies," he said. "Nothing is perfect. Open society is a society that
recognizes that perfection is unobtainable, and so you have to make do with
the next best thing, which is a society that's open to improvement. That's
the sense of openness."

That, Soros said, is why he turned to Schmoke. Also, he said, Baltimore has
plenty of deficiencies that require innovative solutions: "the poverty trap
. . . the exclusion or inequality . . . basically, the problems of inner
cities."

Even before Soros committed his $25 million to Baltimore, he had pledged $2
million in matching funds to beef up an ambitious $37.7 million city program
this year to help provide "treatment on demand" for addicts.

The idea, city officials said, is to help addicts immediately, rather than
putting them on the current 30 to 90 day treatment waiting list where many
drop off and return to the streets and crime. The expanded program
anticipates 8,070 slots with 22,380 admissions a year.

In the next five years, the $25 million will go to a broad range of programs
separate from this year's $37.7 million drug treatment budget.

Although some of the money could go to such experimental techniques as
psychiatric therapy or "faith based" intervention for addicts, Schmoke said,
other funds could be used for projects that address the drug problem
indirectly, such as improved housing and job training. One of Schmoke's
favorites would be to boost literacy with free summer reading camps for low
scoring third graders in city schools.

"If we could eliminate the financial barriers to summer school, whether it's
enrichment programs or remedial programs," Schmoke said, "we would probably
have an impact on our dropout rate and help improve the job readiness of a
lot of young people" later on.

Gara Lamarche, director of Open Society Institute programs in the United
States, said that Soros and others in the institute don't claim to have all
the answers and that there are risks inherent in trying new ideas and
solutions.

"I would even go so far as to say," he added, "that some degree of failure
in a large venture is a big ingredient of a broader success. So we're not
really afraid of that."