PopMatters is moving to WordPress. We will publish a few essays daily while we develop the new site. We hope the beta will be up sometime late next week.

Obama denies awareness of stock ownership in contributors' firms

Christi Parsons and Jill Zuckman
Chicago Tribune (MCT)

WASHINGTON - Sen. Barack Obama said Wednesday he was unaware until this week that he once held stock in two companies owned by political contributors, but that he never took any actions in the Senate or elsewhere to further their business interests before ending his brief foray into high-risk investing.

Under the terms of a trust he was in the process of setting up in February 2005, Obama said, his broker made the decision to invest as much as $100,000 in shares in the companies, both of which had business interests before the federal government around that time.

"At no point did I know what stocks were held," Obama, D-Ill., told reporters during a morning news conference. "And at no point did I direct how those stocks were invested."

Obama said the decisions to invest in those two companies were made by the broker without his knowledge, as part of a "quasi blind trust" arrangement he said he had hoped would fend off questions about conflict of interest. The trust documents were actually signed three months after the securities were purchased, but Obama was operating under the terms of the agreement and knew no details about the investments.

"The thing didn't work the way I wanted it to," said Obama, who added that he terminated the investments at a loss of $13,000 in the fall of 2005.

As much as $15,000 of Obama's investment was for shares in AVI BioPharma, which was working on a drug to treat avian flu. Obama waged a high-profile effort for federal funding to fight avian flu, though aides pointed out that it was for early warning systems in Asia and not for drug development.

Obama also had between $50,000 and $100,000 in shares of SkyTerra Communications, which had recently sought permission from the Federal Communications Commission for a nationwide wireless network.

Both firms said they were not aware of Obama's investments.

The questions arise as Obama enters the second month of his campaign for the Democratic nomination for president, an office he seeks as a freshman senator critical of the ways of Washington and an advocate for ethical reform in Congress. The news of his UBS investment account was reported this week by thestreet.com and by the New York Times, which is how aides say Obama learned of the two investments.

The arrangement with his UBS broker began not long after Obama signed a $1.9 million three-book deal in December 2004. He said the bulk of his advance went toward purchase of a new home. Obama said in an interview that he turned to a personal friend and political supporter, George Haywood, for help in deciding how to invest the remainder.

"This was very casual," Obama said, recalling that he said, "`George, I've got $100,000 that I'm interested in doing more (with) than the standard mutual fund. What recommendations or suggestions do you have?' He said, `Why don't you go with this stock broker who has worked well with me in the past?'"

Obama said he met with the stockbroker, whom he declined to identify.

"What I said was, `George told me that you could invest in slightly higher-risk stock choices,' and that I didn't want to know anything about it," Obama said. "He provided us with the standard form where they ask you, `What's your risk tolerance?' and `How long do you expect to hold these stocks?' etc. That was the extent of the conversations."

Obama said he did not give the broker any specific directions about where to put the money.

But Obama said he realized that the system he had set up was flawed when one of the companies his broker had bought stock in sent information to his house addressed to "Dear Shareholder."

So Obama liquidated the stocks, took the loss and placed the money in mutual funds and money market accounts.

The Senate Ethics Committee has strict rules for creating actual blind trusts, which require that the trustee be truly independent and not controlled or influenced by anyone else.

But aides to Obama said the senator didn't seek sign-off from the committee because he wasn't trying to set up a fully blind trust. Bob Bauer, the attorney who helped Obama set up the trust, said the senator didn't want such a trust because he thought there should be some political accountability, including the chance to declare some kinds of objectionable investments as off-limits.

Under the terms of the trust, the holdings and transactions were to be disclosed annually to the senator and to the public, but Obama was not supposed to be informed of investment decisions as they occurred.

Obama said it is not surprising that the broker bought the same stocks for him and Haywood, also one of his clients. Haywood is the person who referred him to the broker in the first place, Obama said, and so it makes sense that he might choose the same stocks for one client that he recommended for another.


(Mike Dorning of the Chicago Tribune's Washington Bureau contributed to this report.)

Please Donate to Help Save PopMatters

PopMatters have been informed by our current technology and hosting provider that we have less than a month, until November 6, to move PopMatters off their service or we will be shut down. We are moving to WordPress and a new host, but we really need your help to save the site.





How 'Watchmen' and 'The Boys' Deconstruct American Fascism

Superhero media has a history of critiquing the dark side of power, hero worship, and vigilantism, but none have done so as radically as Watchmen and The Boys.


Floodlights' 'From a View' Is Classicist Antipodal Indie Guitar Pop

Aussie indie rockers, Floodlights' debut From a View is a very cleanly, crisply-produced and mixed collection of shambolic, do-it-yourself indie guitar music.


CF Watkins Embraces a Cool, Sophisticated Twang on 'Babygirl'

CF Watkins has pulled off the unique trick of creating an album that is imbued with the warmth of the American South as well as the urban sophistication of New York.


Helena Deland Suggests Imagination Is More Rewarding Than Reality on 'Something New'

Canadian singer-songwriter Helena Deland's first full-length release Someone New reveals her considerable creative talents.


While the Sun Shines: An Interview with Composer Joe Wong

Joe Wong, the composer behind Netflix's Russian Doll and Master of None, articulates personal grief and grappling with artistic fulfillment into a sweeping debut album.


Peter Frampton Asks "Do You Feel Like I Do?" in Rock-Solid Book on Storied Career

British rocker Peter Frampton grew up fast before reaching meteoric heights with Frampton Comes Alive! Now the 70-year-old Grammy-winning artist facing a degenerative muscle condition looks back on his life in his new memoir and this revealing interview.


Bishakh Som's 'Spellbound' Is an Innovative Take on the Graphic Memoir

Bishakh's Som's graphic memoir, Spellbound, serves as a reminder that trans memoirs need not hinge on transition narratives, or at least not on the ones we are used to seeing.


Gamblers' Michael McManus Discusses Religion, Addiction, and the Importance of Writing Open-Ended Songs

Seductively approachable, Gamblers' sunny sound masks the tragedy and despair that populate the band's debut album.


Peter Guralnick's 'Looking to Get Lost' Is an Ode to the Pleasures of Writing About Music

Peter Guralnick's homage to writing about music, 'Looking to Get Lost', shows how good music writing gets the music into the readers' head.


In Praise of the Artifice in George Cukor's 'Sylvia Scarlett'

George Cukor's gender-bending Sylvia Scarlett proposes a heroine who learns nothing from her cross-gendered ordeal.


The Cure: Ranking the Albums From 13 to 1

Just about every Cure album is worth picking up, and even those ranked lowest boast worthwhile moments. Here are their albums, spanning 29 years, presented from worst to best.


The 20 Best Episodes of 'Star Trek: The Original Series'

This is a timeless list of 20 thrilling Star Trek episodes that delight, excite, and entertain, all the while exploring the deepest aspects of the human condition and questioning our place in the universe.


The 20 Best Tom Petty Songs

With today's release of Tom Petty's Wildflowers & All the Rest (Deluxe Edition), we're revisiting Petty's 20 best songs.

Joshua M. Miller

The 11 Greatest Hits From "Greatest Hits" Compilations

It's one of the strangest pop microcosms in history: singles released exclusively from Greatest Hits compilations. We rounded 'em up and ranked 'em to find out what is truly the greatest Greatest Hit of all.


When Punk Got the Funk

As punks were looking for some potential pathways out of the cul-de-sacs of their limited soundscapes, they saw in funk a way to expand the punk palette without sacrificing either their ethos or idea(l)s.


20 Hits of the '80s You Might Not Have Known Are Covers

There were many hit cover versions in the '80s, some of well-known originals, and some that fans may be surprised are covers.


The Reign of Kindo Discuss Why We're Truly "Better Off Together"

The Reign of Kindo's Joseph Secchiaroli delves deep into their latest single and future plans, as well as how COVID-19 has affected not only the band but America as a whole.


Tommy Siegel's Comic 'I Hope This Helps' Pokes at Social Media Addiction

Jukebox the Ghost's Tommy Siegel discusses his "500 Comics in 500 Days" project, which is now a new book, I Hope This Helps.

Collapse Expand Reviews

Collapse Expand Features

PM Picks
Collapse Expand Pm Picks

© 1999-2020 PopMatters.com. All rights reserved.
PopMatters is wholly independent, women-owned and operated.