Wednesday, March 07, 2007

Every Hand in the Pot - No Exceptions

"Obama Faces Questions on '05 Investing." When I saw this headline on an article in the New York Times today, I thought it must be too good to be true. The Times with something negative to say about one of the Dem frontrunners for prez? And the quintessentially politically correct one, at that!

And so, of course, it was too good to be true. Have a quick read through the article and you'll see that it spends the overwhelming majority of its time explaining in great detail why the fact that Obama's investments in two companies that came up for government contracts as a result of legislation that he pushed isn't really "corruption." Here are some gems:

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.

Uh-huh, right. Of course, it's not at all implausible that Obama farms out all his investment decisions to a professional. But c'mon - if ethics were the real concern here, couldn't he have just told his investment advisor NOT to spend his money in companies that seemed likely to bring up corruption questions? In other words, why the sudden concern for portfolio ethics now, when it shows up on your (semi-)obligatory campaign financial disclosure for all to see, as opposed to a couple of years ago, when they were made? How does the line go about how moral is what you do when no one is looking?

Mr. Obama sold what appears to have been about 2,000 shares of the company's stock a week later, when it traded at about $3.50 a share, or about $1 a share more than when he bought it. Company officials said they never talked to the senator about his work on avian flu. And while the company has received millions of dollars in federal money to develop drugs for treating ebola and other serious diseases, it still has not received any federal money for its avian flu research.

Give me a break! It isn't whether the company talked to Obama that's at issue, it's whether Obama might have bought stocks in a relatively obscure company that he knew would benefit from legislation that he was planning to enact. And he doesn't need to actually funnel federal money at the company, he just needs to put it in a position to be likely to qualify for a large-volume government purchase sometime in the near future. Having done that, professional investors will get interested, driving up the company's stock whether or not it has actually developed or sold anything. C'mon - the Times has been in this business since the 1850s. Surely they know how this works?

But here's the really important bit - and you won't read it in the New York Times:

To be sure, it's not uncommon to find elected officials in Congress who hold investments in companies that receive federal funding or provide testimony to their legislative committees. In fact, it's hard to find any politicians with money in the stock market who aren't at least indirectly invested in a major government contractor, such as General Electric (GE) or Boeing (BA) .

But 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. 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.

Right - or through major campaign donors who happen to be involved both companies, as reported in the Times article.

I guess my beef here isn't really that Obama makes corrupt investments. All sleazy pols (which is to say all pols) do that. What I find frustrating is the vigor with which the Times went after Cheney for roughly the same kind of behavior involving Enron and Halliburton. Compared to that coverage, this article reads like a litany of excuses. I also don't appreciate that they haven't bothered to see through the ruse of Obama selling his stocks right as his financial disclosure hit the press, or that no one at their paper seems to have noticed that Obama's sale actually came at a good time (because it insulated him from the much more dramatic losses the company suffered immediately after he sold his shares). And what I especially majorly don't appreciate is the complacency with which this major media outlet - one that likes to style itself as a talker of truth to power and constantly insists (when Republicans are in the White House) that its job is reporting on the powerful to keep the people informed - accepts that politicians make sleazy investments. To me - the existence of this kind of corruption is one of the most persuasive arguments for a minarchist government. The fact that such investment conflicts of interest arise virtually guarantees that government will be inefficient - because the people doing the legislating can hardly help themselves when the temptation to support a substandard policy that will make them millionares through their backdoor investments arises. I wonder, for example, what Obama's investment portfolio will look like when Congress is voting on his national healthcare plan?

All this stuff sucks. We don't work hard and pay taxes so that government officials can abuse their power to fix the markets and give their private investments a push. If Obama plays this game as much as everyone else - and it seems he does (and why wouldn't he?) - then it's something we need to know about before we decide whether or not to vote for him. ESPECIALLY since he styles himself as a political "outsider." He cannot both be a political outsider and make corrupt investments, sorry. It is, in the words of a great man, "just that easy."

I hate the New York Times. They need to trust their readers more. No one who takes an honest look at Obama's corruption side-by-side with Cheney's can possibly conclude that Obama is the worse of the two. So just cut the crap and report the facts, please. One thing we do need to know is that Obama isn't the paragon of integrity and "outsider" politics he likes people to think he is. Well so what if he's not, you ask. It wouldn't be the first time a politician sold us a false image.

Certainly that's true. But it is the job of papers like the New York Times to cut through the fog for those of us who don't have full-time politics-watching jobs, and that's exactly what they're not doing in Obama's case.


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