Blitzer's suggestion that Obama “cash[ed] in” on stock deal proved wrong by CNN's own report

Written by Simon Maloy

Published

In teasing a report on Sen. Barack Obama's purchase of stock in two companies whose investors included Obama campaign donors, CNN's Wolf Blitzer asked: “Did the Democratic presidential candidate cash in on his relationship with some big political donors?” The ensuing report, however, made clear that Obama did not “cash in”; rather, he took a net loss of $13,000 when he sold the stock after first learning he owned it.


On the March 7 edition of CNN's The Situation Room, anchor Wolf Blitzer teased a report on Sen. Barack Obama's (D-IL) purchase of stock in two companies whose investors included Obama campaign donors, by asking, “Did the Democratic presidential candidate cash in on his relationship with some big political donors?” In fact, the same report Blitzer teased made clear that Obama (whose broker made the purchase on his behalf and, Obama said, without his knowledge) sold the stock at a net loss of $13,000 after first learning that he owned it.

The New York Times reported on March 7 that Obama's broker purchased the stock in early 2005 as part of a blind trust and quoted an Obama spokesman claiming that the presidential hopeful “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 article also noted that "[t]here is no evidence that any of his [Obama's] actions ended up benefiting either company during the roughly eight months that he owned the stocks," and that “Senate ethics rules do not prohibit lawmakers from owning stocks -- even in companies that do business with the federal government or could benefit from legislation they advance -- and indeed other members of Congress have investments in government contractors.”

However, in teasing the March 7 report, Blitzer said:

BLITZER: Coming up: a statewide drive to impeach -- yes, impeach President Bush and Vice President Dick Cheney. Where are the supporters for this drive coming from and will their campaign get any traction nationwide?

Taking stock of Senator Barack Obama's investments: Did the Democratic presidential candidate cash in on his relationship with some big political donors?

The ensuing report, however, made clear that Obama did not “cash in.” From the March 7 edition of The Situation Room:

MARY SNOW (correspondent): Well, Wolf, the investments in question are stock in two obscure companies. Senator Obama owned them for about eight months in 2005. His campaign wasted no time in addressing the scrutiny.

[begin video clip]

SNOW: Senator Barack Obama and his staff moved swiftly to ensure his financial assets don't turn into a political liability. The Democratic presidential hopeful came forward after an estimated $50,000 in stock purchases became front-page news on The New York Times.

OBAMA: At no point did I know what stocks were held, and at no point did I direct how those stocks were invested.

SNOW: But donors to Obama turned out to be backers of the companies he invested in, companies that stand to do business with the federal government.

It started in 2005. Obama had a $1.9 million advance for his books and invested a portion of that money through a recommended broker.

At the time, he set up a blind trust. Simply put, he'd have no knowledge of what his broker was investing to avoid conflicts of interest. Turns out his broker had invested in a satellite communications business and a biotech firm, which is developing an avian flu drug. Avian flu is an area where Senator Obama took the lead in 2005.

Obama says when he received the stockholder mailing, he realized the trust wasn't so blind and sold the stocks at a net loss of about $13,000. So, is there a conflict? Listen to Senator Obama.

OBAMA: What I wanted to make sure was that I didn't want to invest in companies that would potentially create conflicts with my work here or not abide by some public statements I had said in terms of how things work.

SNOW: Some of his public statements have been centered on ethics reform. It's been a hallmark of his short Senate career and his presidential campaign.

OBAMA: I was proud to help lead the fight in Congress that led to the most sweeping ethics reforms since Watergate.

SNOW: One political watchdog group took notice of the speed in which the Obama camp came forward.

SHEILA KRUMHOLZ (Center for Responsive Politics executive director): The fact that he did take a loss ultimately overall helps him. It, I think, helps undercut the claim that there was some funny business going on here.