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.