Messiah stock splash: NYT scooped two days ago by TheStreet.com

posted at 2:16 am on March 7, 2007 by Allahpundit

Exit Entrance question, per an eagle-eyed reader: what’s more dicey, Obama’s small-cap shenanigans or the fact that TheStreet.com had this story bright and early Monday morning and received not a scrap of credit in the Times story that Drudge has been pimping all night?

Answer: the latter, because the Obama “scandal” seems like thin gruel. He started to set up a blind trust to invest on his behalf shortly after he was sworn in to the Senate in 2005. Before the trust was fully up and running, and allegedly without consulting Obama, his broker bought shares in two obscure companies, both of which were backed by his political supporters (an angle, it should be noted, that TheStreet didn’t cover) and both of which had important business with the federal government at the time: the pharmaceutical company was developing an avian flu drug while Obama was campaigning for increased government spending to fight the disease and the satellite company had just received FCC approval for a nationwide wireless network, raising the prospect of a merger with a terrestrial carrier.

That was in February. According to TheStreet, he dumped the pharma stock on October 28 for a gain of $2,000 and the satellite stock on November 1 for a loss of $15,000. It’s not clear why he sold when he did, although TheStreet notes that the satellite stock nosedived the following year when the merger failed to materialize, so Obama’s losses could have been much worse. His spokesman, however, tells the Times that he caught wind of something amiss with the trust’s management and acted quickly to reduce the appearance of impropriety:

Mr. Burton said the trust was different from qualified blind trusts that other senators commonly used, because it was intended to allow him greater flexibility to address any accusations of conflicts that might arise from its assets. He said Mr. Obama had decided to sell the stocks after receiving a communication that made him concerned about how the trust was set up.

The fact that his broker was investing in companies in which his supporters owned shares and which stood ready to benefit from DHS pork is shady, but without some evidence that Obama was secretly steering him to do so there doesn’t seem to be much here. According to the Times, the pharmaceutical company never did get money for its avian flu drug (although it got money for other drugs) and the fact that Obama took a net loss on the investments is going to make it hard to sell to the public as proof of dirty dealings. The best TheStreet can do is this:

Obama’s 2005 trades raise questions in that Skyterra Communications and AVI Biopharma are far more speculative and uncommon stocks than those blue-chip staples [that most Senators invest in]. They both have much smaller market caps — less than $700 million — and lower trading volumes. While there’s no evidence that Obama had a role in the contracts for the companies, given his other investments, it seems an unlikely coincidence that the senator would be familiar with either company except through his work as a legislator.

Yeah, it does, but financial scandals are too boring to gain traction on “coincidences” when the malefactor ended up in the red. Still, though, it’s nice to see the hem of the Messiah’s garment with a little dirt on it, especially since this isn’t the first sketchy deal he’s been involved with. One more strike and Hillary’s people will have themselves a bona fide trend to work with. Then it’ll get nasty, and then it’ll get awesome.


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A spokesman for Obama says the senator did not know that he had invested in either company.

Hell if I know what the truth is with this breaking story, but I find Obama’s official explaination a tad convenient. He’s not Nelson Rockefeller, and I’d presume his “broker” would have been made mindful that he should consult his client (Mr Obama) before splaying that kind of money around in the market when they initially inked their account agreement.

The fact that his biggest campaign donors bought into the same companies too, and the fact that the companies were ones directly affected by Obama’s legislation lobbying gives it some meat… tender juicy red meat.

Maybe not enough people payed enough attention to the TheStreet.com story and the NYT is expounding on the original scoop… maybe? I guess we’ll have to wait for the actual NYT article to be published in full before too much speculation is done.

SilverStar830 on March 7, 2007 at 2:31 AM

One more strike and Hillary’s people will have themselves a bona fide trend to work with. Then it’ll get nasty, and then it’ll get awesome.

Can anyone say Hillary’s Cattle futures????

PinkyBigglesworth on March 7, 2007 at 3:15 AM

This is nothing.

Obama’s big trouble will come when his dealings with Tony Rezko come to light. Rezko has connections to La Cosa Nostra as do a lot of Chicago Democrats. Look up the Duff family and Mayor Daley, in particular John Kass’ columns. I don’t know how close Obama is to these people but they are dirty and they don’t do favors for nothing.

Bill C on March 7, 2007 at 3:42 AM

Look I disagree 100% with Obama and Hillary but LETS BE FAIR AND ACCURATE

They are American citizens and deserve not to be unduly tarnished or judged

This is what we have Ann for :)

But seriously, he deserves what I want for everyone, the truth, not the hype

EricPWJohnson on March 7, 2007 at 5:10 AM

Bill C has it right.

The Rezko land deal and subsiquent indictment of Rezko is a silver bullet for Hillary.

georgej on March 7, 2007 at 5:37 AM

This is just the beginning. Before this is over, the Clinton Goon Squad will have Mr. Hussein Obama in bed with a live man or a dead woman. (Actually, either may be helpful to a DemoncRAT running for prez.)

mountainmanbob on March 7, 2007 at 7:44 AM

Hillary is hardly going to bring up real estate scandals

EricPWJohnson on March 7, 2007 at 7:46 AM

This is a warning to Obama by Hillary of what is to come. No way is he going to win the nomination.

I feel a little sorry for Obama. Ever since he has been little, he has been told by the PC establishment in schools, college, and the MSM that as long as he conforms to liberalism and PC ideas of history and culture, he is a privileged person in America that no one can question. He has lied time and time again and the MSM has never called him on it. Obama feels he can get away with anything.

Hillary is going to squash him, and it is going to be confusing and ugly for him soon.

januarius on March 7, 2007 at 8:41 AM

When will Hillarys camp leak the illegitimate love child rumor?

roninacreage on March 7, 2007 at 9:17 AM

…Then it’ll get nasty, and then it’ll get awesome

So awesome that it would be great to see AMDS Films from yesterday take the campaign raw footage, add the costuming and atmospherics ala Hamlet Is Back, and it’ll be so popular you’ll run outta popcorn showing it.

eeyore on March 7, 2007 at 9:35 AM

Any scandal that takes 5 paragraphs to explain and then still makes little sense is way too boring to get anyone’s attention.

If you want interesting stock deals, this is an interesting stock deal.

Some people seem to be complaining about hypocrisy but I love this. What better way undermine Haliburton and everything they represent than to take their money and give it away to progressive causes?

JaHerer22 on March 7, 2007 at 11:20 AM