Barack Obama, a star of the Democratic party and a frontrunner in the presidential race, was forced on to the defensive this week over past financial dealings.
Disclosure of his share dealings in two companies — one dealing in pharmaceuticals and the other in communications — was a knock to Obama, who is campaigning on a platform of higher ethical standards in politics and tougher restrictions on political funding and lobbying.
Until now, Obama, a senator for Illinois, has enjoyed a relatively easy rise and established himself as the main rival to Hillary Clinton for the Democratic presidential nomination.
His campaign team insisted on Wednesday his share dealings had all been above board and there had been no conflict of interest.
A financial website, TheStreet.com, reported this week that in March 2005 Obama bought more than $50 000 of stock in the companies. One of them, AVI BioPharma, was developing a drug to treat avian flu and the other, SkyTerra, a satellite communications business, was expanding wifi access across the United States.
Obama opened himself up to accusations of conflict of interest by advocating in the Senate, within two weeks of buying the AVI shares, an increase in federal funding to fight avian flu.
But a spokesperson for Obama, Bill Burton, said this week that his shares had been held in a blind trust. His stockbroker had bought the shares in the two companies and Obama had no knowledge of them.
Burton said Obama had ended the blind trust after receiving a letter in the mail from a company in which he had shares and ”realised he didn’t have the level of blindness he expected”. He sold the stocks in November 2005, losing about $15 000 on SkyTerra and earned a profit of about $2 000 on AVI.
Among unanswered questions is why the stockbroker chose to invest in two obscure firms whose major investors included generous contributors to Obama’s campaign. — Â