Chicago Tribune linked Obama stock purchase and legislation, leaving out his denial that he knew of purchase
Research ››› ››› SIMON MALOY
In a March 9 article on Sen. Barack Obama's (D-IL) February 2005 purchase of stock in AVI Biopharma and SkyTerra Communications, whose investors included donors to his 2004 Senate campaign, the Chicago Tribune reported that "two weeks after Obama purchased" stock in AVI, which was working on an avian influenza drug, "he introduced legislation to increase funding to combat the virus." The Tribune also reported that "SkyTerra received government permission to build a national wireless network on the day Obama purchased his shares." The article went on to note that "Obama has said he was not involved in selecting the stocks and said they were held through a 'quasi-blind trust.' " Obama, however, did not simply say he "was not involved in selecting the stocks" -- he claimed he was unaware that he even owned stock in either of the two companies until the fall of 2005, at which point he sold the stock for a net loss of $13,000. His denial that he even knew about the stock purchases is relevant to whether there is any significance in the timing of the legislation he introduced or of the approval of the SkyTerra request -- but the Tribune did not report the denial. Moreover, the Tribune also offered no indication as to whether Obama was in a position to influence -- or even know about -- the government's decision to allow SkyTerra to build a nationwide wireless network, despite suggesting a link between the decision and Obama's stock purchase.
Additionally, the Tribune again failed to note that there exists no evidence that either company benefited as a result of Obama's actions, as The New York Times reported in its original March 7 article on the stock purchase.
The Tribune reported on March 9:
The investments that stirred concern involve two speculative stocks with business interests influenced by the government: AVI BioPharma, a biotech company, and SkyTerra Communications, a satellite communications company. The transactions were first examined by the Web site thestreet.com. The New York Times later disclosed the involvement of Obama campaign contributors in the companies.
AVI was developing a drug to fight avian flu, and two weeks after Obama purchased the stock he introduced legislation to increase funding to combat the virus, which was spreading in Asia at the time. SkyTerra received government permission to build a national wireless network on the day Obama purchased his shares.
Obama has said he was not involved in selecting the stocks and said they were held through a "quasi-blind trust." His staff has stressed that the trust, which invested only in the two stocks, suffered a net loss of $13,000, even though Obama made a 28 percent profit on his investment in AVI.
Still, the selection of two small-capitalization, speculative stocks is peculiar given the investment instructions provided by the legal document establishing the trust, which Obama named the Freedom Trust.
However, as the Times reported on March 8:
Senator Barack Obama said Wednesday that he did not believe it was a conflict of interest to seek investment advice and use the brokerage services recommended by a friend and political contributor. He said he had not been aware that his broker had invested up to $100,000 in two companies backed by some of his top donors.
"At no point did I know what stocks were held," Mr. Obama said. "And at no point did I direct how those stocks were invested."
According to pricing data released by Mr. Obama's campaign Wednesday, it appears that his investments, both made in February 2005, included up to $90,000 in SkyTerra, a satellite communications company, and $9,000 in AVI BioPharma, a biotech company.
Both amounts are higher than previously estimated, though Mr. Obama's aides have said he sold the stocks eight months later for a net loss of $13,000.
Records show that the SkyTerra shares were bought the same day a ruling by the Federal Communications Commission supported the company's effort to create a nationwide wireless network and caused a temporary spike in its stock price.
The AVI BioPharma shares were bought just before Mr. Obama began to push for more federal spending to battle avian flu. At the time, the company was seeking to develop a drug to treat the disease.
But Mr. Obama said Wednesday that he had no idea that he owned the shares when he took up the flu issue, and there is no evidence that either company has benefited from his actions.
Mr. Obama said he had wanted to hold the stocks in a blind trust to avoid any conflicts of interest. He said he did not know anything about what he owned until he received a prospectus from one of the companies in the mail in the fall of 2005.
''It was at that point that I became concerned that I might not be able to insulate myself from knowledge of my holdings, that this trust instrument wasn't working the way I wanted it to,'' Mr. Obama said. ''So it was at that point that I told my attorneys to go ahead and liquidate the stock and put it into mutual funds.''