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Sweet blog special: Obama gets nailed for stock deal. Blind trust not so blind?

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WASHINGTON--In about 30 minutes, White House hopeful Barack Obama has a press conference in the Capitol. The freshman Illinois Democrat and Rep. Luis Gutierrez (D-Ill.) skedded the newser to tout a bill to freeze immigration fees bringing in the leaders of Latino empowerment groups concerned about the plight of immigrants.

However, this event, designed to introduce legislation Gutierrez and Obama have been working on for months, will be overshadowed by a page one story in the New York Times questioning the credibility of Obama's blind trust. Turns out Obama bought stock in little known companies whose investors included some of his major donors.

Obama's rapid response team shot out a rebuttal memo this morning. And ABC's "The Note" has a very good roundup on the political implications for Obama.

Click below for more..

from ABC's "The Note"


http://abcnews.go.com/sections/politics/TheNote/TheNote.html

In their front page investigative must-read, Mike McIntire and Christopher Drew of the New York Times report: "Less than two months after ascending to the United States Senate, Barack Obama bought more than $50,000 worth of stock in two speculative companies whose major investors included some of his biggest political donors." LINK

More McIntire/Drew: "Mr. Obama has made ethics a signature issue, and his quest for the presidency has benefited from the perception that he is unlike politicians who blend public and private interests. There is no evidence that any of his actions ended up benefiting either company during the roughly eight months that he owned the stocks."

"Even so, the stock purchases raise questions about how he could unwittingly come to invest in two relatively obscure companies, whose backers happen to include generous contributors to his political committees."

Sen. Obama's first chance to respond is likely to come at 11:15 am ET in S-115 when he joins Rep. Luis Gutierrez (D-IL) for a press conference announcing the "Citizenship Promotion Act."

(Make your predictions now: Does he cancel? If not, what is his body language and tone like? Does he come with more facts? Does he refuse to take questions on this topic? Will there be live cable coverage? Does Obama call the reporters "guys" in that frustrated way of his? )

The story will now proceed on two levels:

1. Investigative: Other serious news organizations (including and especially the Chicago Tribune, whose humiliated editors thought they were going to be first out of the gate with this stuff) and the right-wing bloggers will scramble to fill in the holes that the Timesmen have dug.

2. What It Takes: How does Obama (and his handlers — yes, he has handlers) deal with the swirl.

Good sign for Team Obama: They have already put out their, uhm, first response document, ahead of The Note's deadline.

Bad sign for Team Obama: Whitewater lost money too.

Good sign for Team Obama: Several potential spin-off problems — such as a nexus between official acts and investments — seem tabled for now.

Bad sign for Team Obama: There are a lot of unanswered questions (and, yes, that Geffen dust-up put blood in the water; and yes, it's a safe bet that you won't hear a peep on this one from the Clinton campaign anytime soon).


==================================
from the Obama campaign..

THE NEW YORK TIMES:

“There is no evidence that any of [obama’s] actions ended up benefiting either company during the roughly eight months that he owned the stocks…

[OBAMA] SOLD THEM AT A NET LOSS OF $13,000.”

In 2005, Barack Obama entered into a trust agreement -- the terms of which did not permit his stockbroker to solicit advice from Obama or consult him on the trades that were being made – to manage his stock portfolio. As the New York Times reports today, Obama owned stock in two companies which he did nothing to help – an investment that lost him $13,000. At the end of a thorough examination of Senator Obama’s portfolio, it’s apparent that his dealings were completely above board and his decisions were proactively made in the interest of avoiding the potential for conflict.

THE FACTS

Obama Set Up a Trust That Would Independently Manage His Funds. In February of 2005, Obama began the process of creating a trust – the terms of which do not permit the broker to solicit advice from Obama or consult him on the trades that are being made – in an attempt to manage his financial portfolio without a conflict of interest. The intent was that this was a portfolio that would grow over time. [Conversation with UBS Representative, 2/26/07; Obama Trust Agreement, 5/31/2005]

UBS Broker Chose Stocks For Obama; Obama Was Not Consulted. A UBS broker chose the stocks for Obama to invest in, and as per the trust agreement, Obama was not consulted. On Obama’s behalf, the broker purchased $1,001 to $15,000 of Avi BioPharma on 2/22/05 and $50,001 to $100,000 of SkyTerra on 2/10/05. [Conversation with UBS Representative, 2/26/07; Obama Financial Disclosure Form 2006]

Obama Closed Trust Because He Realized It Was Not Truly Blind. In late 2005, after receiving an informational communication from his broker about his investments, Obama realized that his financial arrangements did not significantly protect him against even the perception of a conflict of interest. He contacted his lawyer and steps were taken to sell his stocks and close out the trust. Obama’s stock holdings were liquidated by November 1, 2005, and documents to close the trust were filed on December 15, 2005. [Conversation with UBS Representative, 2/26/07; Trust Distribution and Termination Document, 12/15/05]

Obama Made Less Than $2,500 On AVI BioPharma; Sold Stock As It Finally Began To Trend Upward. UBS purchased AVI BioPharma on Obama’s behalf when it was $2.57 a share in February of 2005, and sold it in October of 2005 at $3.30 a share, for a profit of less than $2,500. The stock price wavered throughout the summer, took a dip to $2.15 in August, and only started to recover at the end of September. [UBS Records Provided 2/26/2007; Obama Financial Disclosure Form 2006; Yahoo Finance Historical Stock Prices, Accessed 3/6/07]

Obama Lost $15,000 On SkyTerra. UBS purchased SkyTerra on Obama’s behalf when it was $36.35 a share in February of 2005, and sold it in November of 2005 at $30.49 a share, for a loss of approximately $15,000. [UBS Records Provided 2/26/2007; Obama Financial Disclosure Form 2006; Yahoo Finance Historical Stock Prices, Accessed 3/6/07]

NO EVIDENCE THAT OBAMA TOOK ANY OFFICIAL ACTION TO HELP COMPANIES

AVI BIOPHARMA

Obama’s Office Took No Action On Behalf of Avi BioPharma. Obama’s Senate office did not have any interaction with or take any action on behalf of Avi BioPharma. Company executives have had no interactions with Obama, company officials said they never talked to Obama about his work on avian flu, and they were not aware of his buying and selling in AVI shares. [www.thestreet.com, 3/5/07; New York Times, 3/7/07]

Obama’s Senate Bill Addressed Preparedness And Early Warning Systems For Avian Flu in Asia, Did Not Fund New Drug Development. Obama’s bill was focused on developing early warning systems for avian flu and encouraged NIH to expand research on influenza but did not fund authorize new drug development. [S. 969, 109th Congress]

Legislation Proposed By Obama and Others Had No Positive Impact on Avi BioPharma Stock. Obama and eight cosponsors introduced his avian flu bill (S. 969) on April 28th, 2005. On the day the bill was introduced, the price actually dropped slightly ($2.71 a share to $2.68 a share). The stock price also dropped during the week the bill was introduced; on April 26th, the stock opened at $2.80 a share, and the price dropped over the next six days, closing at $2.49 on May 4th, 2005. [Yahoo Finance Historical Stock Prices, Accessed 3/6/07]

Bipartisan Senate Amendment Cosponsored By Obama Did Not Earmark Funds for Particular Companies. The bipartisan Harkin amendment, which Obama cosponsored, provided $3.8 billion related to the flu and included funding for new drug development. However, it did not direct funds to individual companies. [SA 2283, 109th Congress; introduced 10/26/05]

Amendment Passed By Full Senate Had No Positive Impact on Avi BioPharma Stock. Obama was one of 15 cosponsors on a Harkin amendment that included funding for drugs designed to combat the avian flu. The amendment was introduced on October 26th, 2005 and passed the next day. On the day the amendment passed, the price actually dropped 21 cents ($3.63 a share to $3.42 a share). The stock price dropped from $3.94 from the day the bill was introduced to $3.56 on October 31, 2005, a drop of 38 cents. [Yahoo Finance Historical Stock Prices, Accessed 3/6/07]

Avi BioPharma Did Not Receive Contract For Stockpiling Drugs Or Any Federal Money For Its Avian Flu Research. “AVI spokeswoman Jenny Moede says the company, based in Portland, Ore., has collaborated with various agencies of the federal government to test its technology on animals. It has not yet been used on humans, and the government has yet to stockpile any of its drugs.” The company confirmed to the New York Times that “it still has not received any federal money for its avian flu research.” [www.thestreet.com, 3/5/07]

Avi BioPharma Did Not Tout Senate Action Connected To Obama In Press Releases Or Conference Calls. A review of Avi BioPharma’s press releases from 2005 shows that they did not tout any Senate actions connected to Obama in either press releases or conference calls. [http://www.antivirals.com/press_2005.html]

Money Avi BioPharma Received Was Unconnected to Obama Or Avian Flu. In October 2005, AVI BioPharma preliminarily announced DoD funding for research on four viruses. That funding was unconnected to Obama and was not related to research on avian flu. The press release from the company stated, “AVI BioPharma, Inc…announced that the U.S. Senate Committee on Appropriations has approved $22 million for AVI’s research and development programs as part of the FY2006 defense spending bill…the spending bill would direct $22 million to AVI for the continued development of technology to test for and find therapeutic agents for Ebola ($6 million) and Marburg ($6 million) viruses, and anthrax and ricin toxins ($4 million). In addition, the allocation includes new funding for an AVI project to test for and find therapeutic agents for dengue virus ($6 million).” AVI BioPharma eventually received $11 million in the DOD Appropriations bill for 2006. [thestreet.com; Avi BioPharma Press Release, 10/3/05]

SKYTERRA

Obama’s Office Took No Action On Behalf Of SkyTerra. Obama’s Senate office did not take any action on behalf of SkyTerra. A spokesman for Skyterra said the company’s top officials had not been aware of Mr. Obama’s investment. [New York Times, 3/7/07]

CORRECTING THE RECORD: REZKO

NYT: The Obamas House Sat On A Large Property Subdivided to Make It More Affordable

FACT: The original seller divided the land into parcels for individual purchase prior to the Obamas interest in the house and bid on the house. [Obama Financial Records, June 2005]

25 Comments

You are being silly, this is a non-story AND any objective reader can see that.

I wish the MSM would show the same enthusiasm for examining Bush and Cheney's holdings and ties to the oil industry and Halliburton.

Who cares? He didn't even know about the investment. This is stupid.

So where did the Times learn that the four Obama fundraisers had raised $150,000 for his campaigns:

The most recent financial disclosure form for Mr. Obama, an Illinois Democrat, also shows that he bought more than $50,000 in stock in a satellite communications business whose principal backers include four friends and donors who had raised more than $150,000 for his political committees.

Am I missing something? Has Obama disclosed his fundraisers somewhere? And how much they've raised for him?

This is NOT a non-story as Chris indicates above.

It is no more of a non-story to Obama than Whitewater or Castle Grande were to Bill Clinton's campaign (Hillary's campaign as well when someone bring it up again).

The "Obama lost $13K" defense is bogus. The Clinton's lost money on Whiterwater and the country lost billions on Castle Grande.

It also brings back memories of a certain person who invested $1000.00 in cattle futures who MADE $100.000.00 on that investment. Her name Hillary Clinton.

Something is not ringing true when I read that Obama "normally" invested in conservative investments and mutual funds. Then why at this crucial time did he (or his investment managers) take a flyer with these two high risk companies? These companies that "just happened" to be run by campaign donors!

There is more to this than we are now seeing.

The Clinton people will not bring this up because of the backflow to them opn Whitewater and Castle Grande.

We must wait!

...this could be bad news. for Sen. Obama's fledgling campaign. Look at the essential facts from the conveniently provided NY Times and ABC Source-based transcripts: In JAN. 2005 Barack Obama takes the Oath of Office as the junior Senator from Ilinois... One Month later in FEB. 2005 Obama's newly formed blind trust buys stock in Portland, Oregon based AVI BioPharma whose backers were Obama campaign contributors... A scant 8 months later, in OCT. 2005 Obama's blind trust sells the AVI BioPharma stock ($2,500 profit) AND in the Same Month the Senate passes an amendment co-sponsored by Sen. Obama which eventually nets the AVI BioPharma company ELEVEN Million Dollars in Dept. of Defense 2006 appropriations...Finally in DEC. 2005 Obama files to close the blind trust. Critics may charge it was a "shell trust" of 10 month duration that acheived it's purpose and that though Sen. Obama had no specific knowledge... HIS STAFF knew AVI BioPharma would be in the mix of companies seeking DOD appropriations and therefore certain to receive ample funding when the bill passed the full Senate. One of Sen. Obama's Primary campaign points is that he is not "of" Washington!! Do other SweetBlog web-loggers think this will have legs?

you all are just trying to get him caught up but its not working.

dealings with Rezko? now this? he cant win.

To Dave Freeman,
Interesting counterpoint. The statistic stating that AVI BioPharma netted 11 Million dollars. It wasn't mentioned in the article.
Do you have the link for others to see? It's a big internet- please share!

Well either Hillary or the GOP can go back to digging as this is another lame one. Another non story that has not hurt Obama.

obama is a junior senator. not a freshman senator. thank you. and as others before me have stated. this is a non-story.

This is a non-story, not only did he lose money but it was a blind trust, so why don't we here more from the Sun Times about the connections between Hallibuton and the scandel in the veteran's outcare in Washington? This did hurt many of our veterans.

I see the question being raised: How can Obama say he had a blind trust when that trust ended up investing in the interests of major contributors and fundraisers to his campaign.

Good question. So, why haven't the columnists dug deeper for an ANSWER to the question, instead of just raising the question, and smearing him by innuendo. If they have something solid that questions his honesty, other than circumstantial cooincidence, then by all means, come forth and give it. But if they don't this is just smear and character assassination.

It is pretty amazing though that the Note and the New York Times, haven't shown this much intrepidness in digging up a story about improper financial dealings when it comes to finding out whether Cheney has still been getting money from Halliburton while Vice-President, his influence upon Halliburton getting no-bid contracts in Iraq, both Cheney's and Bush's questionable insider trading schemes before they attained office, and the fact that a war (in which Bush/Cheney cronies have made billions) started on lies and which has shed TONS OF HUMAN BLOOD was foreshadowed in Cheney's secret energy task force meetings of early 2001 when maps of Iraqi oil fields were found among the papers from that meeting that have so far been released.

F**k the Note!! Lying hypocrites. F**k the corporate media!! Deceitful bastards.

No matter what he does or has done matters. The Jesus walks on water. I think it shows more about him that he endorsed Daley, but that means nothing too. He could go #2 on the stage and you Dems would compare it to a Picasso.

The bloom is off the rose for Obama as far as I'm concerned. Ever since he inserted his head up Israel's backside when he spoke to the AIPAC he has proved that opportunism is the political creed that he adheres to the most. What colour is Obama? Try BROWN.

Reply for Michael B. The AVI 11 Million dollar figure is cited very near the end of the (above) NY Times article just above the word SKYTERRA. I agree the internet blogosphere is vast which is why this blog, SweetBlog/SweetBlogSpecial/SweetBlogScoop is especially excellent with it's steady stream of full texts of candidate's speeches, schedules and source based articles on Obama and the other '08 candidates. For those on short on time this blog is convenient, one stop blogging and I enjoy reading contributions by all bloggers and the principal web journalist at this site Sun-Times columnist Lynn Sweet.

Blessed Barak, King of Apostles, he to whom no sin can be imputed.

He it is who needeth no position, no ethics, no qualifications.

Bow down and worship the Prince of Charisma. Close thy eyes, plug thine ears, shut thy mind.

Blessed Barak, King of Apostles, Rule for us!

Ugh, the Democrats must be in the acendency. How do we know? Because we're starting to get Whitewateresque reports like this.

It's up to us to make sure the MSM doesn't get away with it this time.

I mean, Lynn, what are you implying with this kind of "News" Release?

You will hear this BS from the republican controlled news media , straight through the 2008 election and then some. What really shows that the news media is controlled and run by the conservatives and Global Corporations is that the real corruption is never published.
Cheney, Bush Rove, Roberts , you name a republicans and you will find corruption of any and every varieties you wish. Breaking of our constitution & laws of our government & international agreements , Geneva convention , pedophile , marriage fidelity , racial slurs , illegally deleting and appointing judges, prosecutors , no-bid contracts, deleting voter's votes to win an election, heard that Homeland Security even brought hooker to the conservative's poker party on K street, paying mercenaries to fight wars, illegally spying on Americans , torture , invading other country's sovereignty, censoring the news media , lying has become their language and truth is a censor word in their vocabulary.
So when you hear the neo con's spinning the BS , you know damn well they are talking about themselves.


The more you know, the less you like Obama. Start adding in Michelle Obama's sweetheart deals (she's no Jackie!) with Obama's stinkeroo financial shell games, and you've got someone who is going to self destruct.

Obama "nailed?" Are you kidding with this?

This blog missed the bigger story, but I'm not surprised. Obama marched in the IllegalImmigration marches, and the Chicago versions of those were organized by several people with links to the MexicanGovernment and MexicanPoliticalParties. Instead of asking him about his stock portfolio, ask him about his links to those "leaders of Latino empowerment groups".

to Dave Freeman: Remember, the NY Times will try to destroy Obama before long. Mark my word. That paper, especially columnists such as Maureen Dowd, are in Hillary's hip-pocket.

FORGET ABOUT VOTER FRAUD ... HOW ABOUT CANDIDATE FRAUD !!!
Makes me think,
Sat in a Church for 20 years but didn’t know Wright was a racist, Did business with Ayers for 15 years but didn’t know he was a terrioist. Bought property from Resko but didn’t know he was shady. Didn’t know Dr. Khalid Abdullah was anti Semite. Didn’n know Auntie Zeituni is here illegally (living in Public Housing and contributing to his campaign illegally). Sent a Director from his campaign to a meeting with Islamic Terriost but didn’t know. Seems to me he doesn’t know some very important things….or did he and is not being honest! Obama is a dangerous man!

1. Occidental College records –Not released
2. Columbia College records – Not released
3. Columbia Thesis Paper – “not available”
4. Harvard College records – Not released
5. Selective Service Registration – Not released
6. Medical records – Not released
7. Illinois State Senate schedule – “not available”
8. Law practice client list – Not released
9. Certified Copy of original Birth certificate – Not released
10. Embossed, signed paper Certification of Live Birth – Not released
11. Harvard Law Review articles published – None
12. University of Chicago scholarly articles – None
13. Your Record of baptism – Not released or “not available”
14. Your Illinois State Senate records– “not available”

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Lynn Sweet is a columnist and the Washington Bureau Chief for the Chicago Sun-Times.

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This page contains a single entry by Lynn Sweet published on March 7, 2007 9:42 AM.

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Sweet Column: House Majority Whip Clyburn and the S.C. primary. "Nah, come on"--on Bill Clinton's nickname "first black president" is the next entry in this blog.

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