commentary omitted key facts to claim Obama is "at the center of an ethics controversy"


In a March 13 commentary, Tom Fitton, president of the conservative legal organization Judicial Watch, claimed that Sen. Barack Obama (D-IL) "has once again been forced to answer for his own questionable behavior," citing a March 7 New York Times article on the Democratic presidential candidate's 2005 purchase of stock in two companies whose investors included donors to his 2004 Senate campaign. According to Fitton, Obama "has found himself at the center of an ethics controversy." However, despite claiming that Obama was "forced to answer" for the stock deal, Fitton did not include any of Obama's "answers" -- specifically that he denied knowing about the stock purchase, which was made in early 2005, until that fall, at which time he sold the stocks and incurred a net loss of $13,000. Fitton also omitted key facts from the Times' reporting that undercut his suggestion that Obama behaved unethically -- namely, that there exists no evidence that any of Obama's actions benefited either company during the time he held the stock.

From Fitton's op-ed, headlined "Obama Snagged in Stock Controversy":

Barack Obama, who has made ethics a signature issue in his campaign for president, has once again been forced to answer for his own questionable behavior. This according to the New York Times:

"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. One of the companies was a biotech concern that was starting to develop a drug to treat avian flu. In March 2005, two weeks after buying about $5,000 of its shares, Mr. Obama took the lead in a legislative push for more federal spending to battle the disease."

This "legislative push" included a bill sponsored by Obama urging the government to increase stockpiles of antiviral medicines.

Obama had set up a "quasi" blind trust, which enabled him to exert some discretion over his investments in order to ensure there were no conflicts of interest with respect to his work on the Hill. So much for that. Additional concerns arise from the fact that Senator Obama received investment advice from one of his major financial backers.

Obama, with help from Iowa Senator Tom Harkin, amended a bill to increase by $3.8 billion the amount of government funds dedicated to fighting avian flu. At the time, AVI BioPharma, one company in which Obama invested was developing a drug to treat the disease.

Moreover, Mr. Obama invested in a satellite company, Skyterra Communications, whose backers have raised more than $150,000 for Obama's political committees. (One of these individuals is also the subject of an FBI investigation involving public corruption in Albany, NY, the Times reports.)

However, as Media Matters for America noted, 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."


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.''

Fitton also resurrected the claim that Obama was involved in a "shady land deal" with Democratic fundraiser Antonin Rezko, writing:

This is the second time in the last few months that Obama, touted as a politician who floats above the culture of corruption, has found himself at the center of an ethics controversy.

You will recall late last year, Obama was involved in a shady land deal involving another of his political contributors, Antoin "Tony" Rezko, who was later indicted in an unrelated political corruption scandal. After getting caught, Obama said the land deal was a mistake in judgment.

As Media Matters documented, a December 14, 2006. article that purported to expose "Obama's Shady Real Estate Deal" concluded that there is "no evidence" that Obama did anything wrong:

There's no evidence that the senator is fibbing or that the indicted fund-raiser asked anything in return for his neighborly behavior (though that might have been just a matter of time). Obama hasn't tried to change his story, even though Rezko is now talking to investigators., also known as the Cybercast News Service, is a division of the conservative Media Research Center, an organization that purports to "prove -- through sound scientific research -- that liberal bias in the media does exist," and to "neutralize its impact on the American political scene." CNS describes itself as "an alternative news source that would cover stories that are subject to the bias of omission and report on other news subject to bias by commission" and that it "endeavors to fairly present all legitimate sides of a story and debunk popular, albeit incorrect, myths about cultural and policy issues."

Fitton's op-ed also appeared in the National Ledger, a "new media independent news publication" based in Phoenix, Arizona.

Posted In
Government, Ethics
Barack Obama, 2008 Elections
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