ROCK RAPIDS, Iowa — John Edwards was telling a corn-belt crowd that the government in Washington is rigged in favor of the powerful and against regular folks, people just like them.

"That is what we need to change," Edwards said to about 150 people in a small-town volunteer fire station. "Democracy is supposed to start here, not with people walking around in $2,000 suits inside the Beltway in Washington, D.C."

Edwards may not wear $2,000 suits, but he's taken plenty of heat this year for his $400 haircut, his $6 million spread outside Chapel Hill, N.C., and his financial ties to a Wall Street hedge fund.

Since his stint as the Democrats' vice presidential candidate in 2004, the tension between Edwards' private life and his politics has been growing. In recent years, Edwards, 54, has adopted a more populist tone at the same time he's taken on more of the accoutrements of wealth.

That tension may be one reason that Edwards has struggled against Sens. Hillary Clinton of New York and Barack Obama of Illinois.

"I think it does hurt him, because it calls into question his sincerity," said former South Carolina Democratic Party Chairman Dick Hartpootlian, who backs Obama. "If you base your campaign on where you come from, the haircut, the corporate portfolio, all that is inconsistent with that."

Few candidates have made so much of their biographies. Edwards says that his Southern mill-village background gives him a special understanding of the problems of working people, rural America, the devastation of harmful trade policies and poverty.

"I run for president for my father, who worked in the mill his entire life," Edwards said recently in a speech at Saint Anselm College in Manchester, N.H., another mill town. "I run for president for all those who worked in that mill with my father. I run for president for all those who lost their jobs when that mill was shut down."

Friends say that Edwards is very conscious of class, very aware of where he started. That helped inform his career as a trial lawyer and his political philosophy, a legacy of the days when mill-village kids were often looked down on as "lint heads." In the world of the mill villages, lawyers often were regarded as equalizers.

On the campaign trail, Edwards likes to boast about how he beat the corporations again and again in the courtroom, and can do the same when he's in the White House facing the pharmaceutical and insurance industries.

As a lawyer, Edwards went for the big payoffs, making millions suing doctors, hospitals and corporations and building a net worth he's reported at about $30 million. Edwards wasn't an anti-poverty lawyer, and he did little pro bono work. He didn't emphasize fighting poverty when he ran as a moderate in 1998, defeating Republican Sen. Lauch Faircloth, or during his six years in the Senate.

"The problem is that he has taken as his signature issue (poverty), something he hasn't shown a great deal of background or interest in," said Jack Hawke, a former North Carolina Republican Party chairman. "It's hard to understand his conversion. That is why the little things have tripped him up."

NOT JUST RHETORIC

But Edwards' involvement in social issues is deeper than his critics give him credit for. Before entering politics, he was heavily involved in Urban Ministries, a local program that helps the poor. He and his wife, Elizabeth, also spent several million dollars creating two after-school learning labs primarily to serve underprivileged children at two North Carolina high schools.

After the 2004 campaign, Edwards created a poverty research center at the University of North Carolina-Chapel Hill. The organization continues to function today with a $2 million endowment that he helped raise.

Although Edwards has long been rich, he didn't flaunt it through most of his life. He didn't have the private jets or fancy clothes of other big-name trial lawyers. He was known for cheap suits, not $400 haircuts.

He lived most of his adult life in an upper-middle-class neighborhood in Raleigh, N.C., in a house that he and Elizabeth sold earlier this year for $1.4 million, which isn't out of line for a top lawyer or doctor in the state capital. The couple also owns a beach house on Figure Eight Island, N.C., that's valued for taxes at $2.6 million. According to friends, Edwards' extracurricular interests were coaching soccer, jogging, and attending University of North Carolina basketball games.

But since his Senate election, he's traded up to progressively tonier residences: a $3.8 million house near Embassy Row in Washington, a $5.2 million house in Georgetown and finally a $6 million house, which includes a full-size indoor basketball court, built in 2005 outside Chapel Hill.

HEDGE FUND VENTURE

Edwards also took a part-time consulting job with Fortress Investment Group of New York in October 2005. Fortress raises money from wealthy individuals and institutions, pools the cash in private equity or hedge funds and invests it in alternative ways — buying public companies and taking them private, for instance — in an effort to beat usual market returns.

With $43 billion under management, including $16 million of Edwards' personal fortune, Fortress is among the major firms in its class. While Fortress was incorporated in Delaware, its hedge funds were incorporated in the Cayman Islands, allowing partners and investors to avoid or defer paying taxes. That's a practice that Edwards frequently has criticized.

Edwards has said he joined Fortress to gain some business experience. The firm paid him $479,512 last year for his advice, according to his disclosure form. Fortress executives are his biggest source of campaign cash from any company or law firm, giving him $190,150.

Two of the firm's holdings have proved particularly troublesome for Edwards: Nationstar Mortgage of Dallas and Green Tree Servicing of St. Paul, Minn., both subprime lenders. The Wall Street Journal in August disclosed links among Edwards, Fortress and the two subprime lenders, which had sought to foreclose on victims of Hurricane Katrina in New Orleans. Edwards launched his campaign in New Orleans' Ninth Ward, linking the post-Katrina problems to his drive to lift people out of poverty.

Edwards instructed officials at Fortress to redirect his investments away from subprime lenders, an effort to repair damage from the story. He also pledged a donation to aid those in Louisiana who were at risk of losing their homes.

He committed $100,000 in seed money — an undisclosed amount of it from his own pocket — to a fund that ACORN Housing set up to assist homeowners who are trying to work out payment plans with lenders.

Some voters see a disconnect between his lifestyle and his politics, but others shrug it off, noting that most of the presidential candidates are rich.

"He has money now," said Deb Stalter, a 57-year schoolteacher from Stuart, Iowa. "But he didn't come from there."