GEORGE SOROS gambled on the British pound in 1992 and walked away with $1 billion. Now the international speculator-turned-financier is taking a gamble on something even less predictable than foreign-currency markets: the future of Russia.
The Hungarian-born philanthropist, who manages funds worth more than $10 billion, announced two weeks ago in Moscow that he would donate $250 million to revamp Russian education, along with $32 million to aid scientific research as part of an ongoing $100 million project.
He hopes, he says, to help Russia evolve into an ``open society,'' freed from the nationalist and fascist trends he believes are threatening its existence after more than 70 years of communism. But he is the first to admit that he is ``not at all confident'' about Russia's chances of reform.
``I am horrified at the prospect of what this country faces,'' says Mr. Soros, a smallish man whose gently graying hair, courteous demeanor, and soft Hungarian accent belie his tough image as a ruthless currency speculator. ``I think it is the failure of the world to respond to the opportunity, and I just hope that people wake up to the seriousness of the situation.''
``I have compared the situation here to the Weimar Republic, and I have said that conditions here are worse,'' Soros says, referring to the dire economic situation Germany faced between the wars - a state of affairs that aided Hitler's rise to power.
Earlier this year, Soros warned in an editorial that Russian ultranationalist Vladimir Zhirinovsky, the surprise victor in last year's parliamentary elections, ``modeled himself on Hitler'' and poses a serious security threat to the world. ``I am neither optimistic nor pessimistic,'' he wrote. ``I am cataclysmic.''
Hiding from Nazis
Soros is no stranger to communism or Nazism. His Jewish family was forced into hiding during World War II, and he reportedly pretended to be a Hungarian official's godson until Budapest was liberated by the Red Army. His father had spent World War I in a Siberian labor camp.
Soros fled to Britain in 1947, where he studied at the London School of Economics before learning about arbitrage and investment banking in London and on Wall Street. In 1969, he set up a private mutual fund with $4 million in capital in Curacao in the Netherlands Antilles.
The Quantum fund, as it eventually became known, was worth about $380 million in 1980. Today, despite a $600 million loss last month when the dollar plunged against the yen following the collapse of United States-Japan trade talks, Quantum and its subsidiaries are worth more than $10 billion.
Soros, who has become an American citizen, will contribute $300 million this year to philanthropic causes worldwide, according to an aide.
His past efforts include $50 million to aid Bosnian war victims, a $25 million revolving loan to help the former Yugoslav republic of Macedonia pay for heating oil, and $230 million to create the English-language Central European University in his native Budapest.
Although Soros charities now exist in at least 19 former Eastern-bloc nations, Soros's generosity has not shaken his reputation as a speculator.
After he made $1 billion on ``Black Wednesday,'' when Britain left the European Exchange Mechanism in September 1992, media reports accused him of everything from cheating British taxpayers out of hard-earned money to lording over his personal staff.
In 1991, the media had a heyday after his husband-and-wife butler-housekeeper team in London took him to court for unfair dismissal. They complained, in part, that Soros had allowed his new chef to use as cooking wine a bottle of Chateau Lafitte worth more than $600.
But money, Soros believes, is only the means to an end. ``My interest is not a personal interest,'' he says. ``I am only empowering people to do their work.''
Some of his initial projects in Russia were not well received. People laughed at his plan to hand out dollar bills to every Russian citizen. And some were insulted when he granted former Soviet scientists $500 grants - good money at the time - to enable them to quit their jobs for a year to pursue individual projects.
``It gave us a lot of moral support,'' says physicist Evgeny Katz, who won such a grant for his work on rare metals. ``It seems they don't need scientists anymore here, so it was important to me that someone liked my publications and gave me money.''
Direct gifts of aid
Disillusioned with Western aid programs operating in Russia, which he has labeled inefficient and self-serving, Soros now makes it a rule to give money directly to grant recipients. He says it's a formula that works.
``One, we find a partner who has the same objectives and whom we can trust basically as far as the intellectual contact. Secondly, we have their interest at heart and not our own. And thirdly,'' Soros continues, laughing, ``we retain control of the finances.''
His $250 million ``Mega-Project'' gives grants to directors of 100 schools throughout Russia selected for their innovative teaching methods. Grants of $60,000 will be donated to 10 schools, $30,000 to 30 schools and $15,000 to 60 schools to buy equipment and supplies and to train and support teachers.
The money also will be used to rewrite textbooks and bring Russian-language educational broadcasts such as ``Sesame Street'' to Russian television.
Meanwhile, Soros's International Science Foundation will donate $39 million in science grants, part of an ongoing $100 million program to stop Russia's brain drain.
To encourage people to help themselves, Soros got the Russian Education Ministry to match a $12.5 million grant to help gifted scientists carry out long-term projects, and he hopes to add an additional $25 million from other sources.
``Even if the most horrendous things happen here in the next few years, there will still be a Russia in the long run. I think that what one does now will bring its fruits in the years to come,'' he says. ``I'm sure that I shall be Enemy No. 1 for Mr. Zhirinovsky, and I am already Enemy No. 1 in a number of countries, so I am happy to play that role.''