Mr. Transparency?

By Jennifer Parker

Feb 12, 2008 3:29pm

"It’s not a question of what I want to know," Sen. Barack Obama, D-Illinois, told WJLA last night, "it’s a question of what the American people deserve to know, which is how people’s finances are handled."

Obama was talking about how he had released his tax returns, unlike Sen. Hillary Clinton, D-NY, but it was an interesting turn of phrase.

Because you may recall last year there were questions about the blind trust Obama set up and how transparent he was about how his finances were handled.

Obama had sought and received investment advice and used the brokerage services of a donor, George Haywood, and the UBS broker Haywood recommended, as the New York Times reported, "invested up to $100,000 in two companies backed by some of his top donors."

Haywood held top positions in the two companies, Skyterra and AVI BioPharma.

The money was supposed to be in what Obama later called a "quasi-blind" trust. As reported by the Chicago Sun-Times Obama "signed papers on May 31, 2005, for the custom trust designed to shield him from knowing how his money was invested – but let him respond to media inquiries about potential conflicts. Obama realized his system was not working when he received some sort of shareholder letter in fall 2005."

"The combination of the lousy investment advice and the perceived conflict of interest cost Obama not only money but credibility," wrote Henry Blodget in Slate.

The story never really had much legs, probably because Obama lost money on the deal.

But there were questions, that remain unanswered, especially given Obama’s comments last night.

Obama has not disclosed the name of the UBS broker, and thus it hasn’t been explained why the broker recommended these two investments in what some deem obscure companies…with ties to Obama donors.

Moreover, it’s unclear what shareholder notification letter Obama was talking about when he first told this story last year.

As The Hill reported, "SkyTerra, like many public companies, sends investors copies of its Securities and Exchange Commission (SEC) proxy forms, also known as 14As, but none were issued during the fall of 2005, according to SEC records." And as for AVI BioPharma, its investor-relations director told The Hill, ‘It doesn’t sound like anything we would have sent out.’"

So it’s still quite unclear how he learned the trust wasn’t truly blind.

- jpt

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