Citing a March 7 New York Times article reporting that Sen. Barack Obama (D-IL) "bought more than $50,000 worth of stock in two speculative companies whose major investors included some of his biggest political donors," MSNBC News Live anchor Contessa Brewer suggested that the story represented Obama's "first real scandal." Neither Brewer nor her guest, Newsweek senior White House correspondent Richard Wolffe, noted that the Times reported that "[t]here is no evidence that any of [Obama's] actions ended up benefiting either company during the roughly eight months that he owned the stocks," though Wolffe did question whether the story qualified as a "scandal."
The March 7 edition of ABC News' political newsletter, The Note, led with the Times' Obama story, calling it a "front page investigative must-read." According to The Note, one of the "[b]ad sign[s] for Team Obama" is that even though Obama lost $13,000 in the stock deal, "Whitewater lost money too." Absent from The Note's discussion of the potential effect of the Times story on Obama was any acknowledgement that that the several multimillion-dollar investigations into the Clinton-era Whitewater real-estate "scandal" found no evidence of wrongdoing on the part of the Clintons.
From The New York Times' March 7 article:
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.
A spokesman for Mr. Obama, who is seeking his party's presidential nomination in 2008, said yesterday that the senator did not know that he had invested in either company until fall 2005, when he learned of it and decided to sell the stocks. He sold them at a net loss of $13,000.
The spokesman, Bill Burton, said Mr. Obama's broker bought the stocks without consulting the senator, under the terms of a blind trust that was being set up for the senator at that time but was not finalized until several months after the investments were made.
"He went about this process to avoid an actual or apparent conflict of interest, and he had no knowledge of the stocks he owned," Mr. Burton said. "And when he realized that he didn't have the level of blindness that he expected, he moved to terminate the trust."
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.
From the 11 a.m. ET segment of the March 7 edition of MSNBC News Live:
BREWER: Could this be Barack Obama's first real scandal? A new financial disclosure from the Illinois senator is raising questions about some of his stock deals. The New York Times reports Obama bought more than $50,000 worth of stock in two companies. The catch? Major investors in both companies were also major donors to Obama's campaign. An Obama spokesman told the Times the stock purchases were made by a broker without the senator's knowledge and they were later sold to avoid a conflict of interest.
So one thing is for certain -- Senator Obama's facing much greater scrutiny now that he's a front-runner for his party's presidential nomination. Richard Wolffe covers the presidential campaigns for Newsweek. Richard, is this a real scandal for Barack Obama?
WOLFFE: Well, any of these stories are a problem for him. I mean, he has such a -- sort of a golden image. He's set ethics reform as a key part of his image and his identity, not just in Washington and Illinois. So any of these stories are a problem. And it's true the Obama campaign is bracing for this kind of story, where he gets knocked off his pedestal.
Having said that, I'm not sure this is the story that really does it. It looks bad, but this was done by a blind trust, and blind trusts are, by their very nature, kept at arm's length from politicians like this. So I think he has an escape clause when it comes to the story.
BREWER: But, you know, he's made ethics such a big part of this campaign. Do you think it undermines his efforts to appear different than those inside-the-beltway Washington insiders?
WOLFFE: Well, it doesn't look good. But blind trusts are complex, they have all sorts of legal restrictions on them, and there is this sort of curious part of why the blind trust would make these investments in small stocks, speculative stocks. I mean, these are not obvious stock picks. It's not like they picked $50,000 of shares in Google, or something. So there are question marks about how the blind trust operated.
Having said that, again, they sold the shares when there seemed to be an appearance of the trust not working properly, the broker not working properly. So, again, this is one of those stories that has a line that underscores the end of it, so the --
BREWER: Those -- and, Richard, those same financial forms show that Obama is taking money from Republicans who funded the Swift Boat campaign against [Sen.] John Kerry [D-MA]. Is that going to cause problems for Barack Obama from Republicans? I mean, from Democrats?
WOLFFE: You know, what's funny about the Obama campaign is that he has attracted a lot of donors who supported Kerry in the past. The reason for that is because those former Kerry donors feel that they can't get a seat at the table with the Hillary campaign, with [Sen.] Hillary Clinton's [D-NY] campaign. So, you know, the fact that he can get those Republican donors as he well he could say is a sign of his bipartisan appeal. On a personal basis, I think those donors are more driven by their own access to a candidate more than the loyalty to John Kerry.
BREWER: Richard Wolffe, thank you.
From the March 7 edition of The Note:
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.