Wednesday, March 07, 2007
Obama Blind Trust "Controversy"
Illinois Senator Barack Obama found himself having to explain some of the elements of some investments made on his behalf as part of a blind trust today. Yahoo News AP wire excerpt:
WASHINGTON - Democratic presidential candidate Barack Obama said Wednesday he was not aware he had invested in two companies backed by some of his top donors and said he had done nothing to aid their business with the government.
The Illinois senator faced questions about more than $50,000 in investments he made right after taking office in 2005 in two speculative companies, AVI Biopharma and Skyterra Communications. Obama said his broker bought the stocks as part of a quasi-blind trust in which he was not consulted when trades were made.
"At no point did I know what stocks were held, and at no point did I direct how those stocks were invested," Obama told reporters at the end of a press conference called to tout an unrelated immigration bill. He said he would provide the paperwork relating to the trust. "What I wanted to make sure is that I didn't want to invest in companies that potentially would create conflicts with my work here," said Obama, who has campaigned on the need for stronger congressional ethics rules. "Obviously, the thing didn't work the way I wanted it to."
Obama purchased $5,000 in shares for AVI, which was developing a drug to treat avian flu. Two weeks after buying the stock, as the disease was spreading in Asia, Obama pushed for more federal funding to fight the disease, but he said he did not discuss the matter with any company officials. Obama also had more than $50,000 in shares of Skyterra, a company that had just received federal permission to create a nationwide wireless network that combined satellite and land-based communications systems.
Among the company's top investors were donors who raised more than $150,000 for Obama's political committees, the New York Times reported Wednesday. The stock holdings were first examined Monday by the financial Web site, Thestreet.com.
The reports found no evidence that any of his actions ended up benefiting either company during the roughly eight months he owned the stocks. Obama lost about $15,000 on Skyterra and earned a profit of about $2,000 on AVI. Skyterra stocks continued to drop after Obama divested.
Wow. Barack sure made a killing, didn't he? Sure, maybe not as much as Dubya's Harken stock flip made the future Preznit, but hey, he's a Republican, and it is considered bad form to scrutinize such deals when a Republican is involved. As for Obama, this seems closer to what the Clintons went through with Whitewater, which turned out to nothing, but it was a nothing that cost close to $100 million for the GOP to investigate.
Obama said he wanted to invest in stocks after signing a $1.9 million deal for his second book, "The Audacity of Hope." He said after buying a home and putting money in the bank and mutual funds, he asked a friend and political donor, investor George Haywood, to recommend a broker so he could invest a portion more aggressively.
Obama said at some point in fall 2005 he got a stockholder letter. He said he believes it was from AVI or Skyterra, but he couldn't remember which company. But he decided to liquidate the quasi-blind trust and put his money in mutual funds and money market accounts that wouldn't raise such questions.
"It's at that point that I became concerned that I might not be able to insulate myself from knowledge of my holdings, that this trust instrument might not be working the way I wanted it to," Obama said. UBS spokeswoman Karina Byrne said the company would not make Obama's broker available for interviews because they do not discuss client investments.
Obama said he didn't invest in a standard blind trust because it wouldn't enable him to limit which companies he invested in, such as those in the tobacco industry and other areas that he did not want to support. "At this point, I'm only invested in mutual funds or cash or money market accounts. That's my instruction to my accountant," Obama said. "We are not going to own individual stocks precisely because it raises questions like this."
Senate ethics rules do not prohibit lawmakers from owning stocks in companies that do business with the federal government.
This whole thing seems like a waste of time. You wanna talk about conflict of interest? Christ, Dick Cheney is still pulling the strings for Halliburton, and nobody says boo about it (as noted in earlier comment). It does not look, at this point, as if there is anything about which to worry ourselves, and I'd guess it will take a hell of a lot more than this to seriously put the Obama presidential candidacy in jeopardy.