Cashing in on political stardom

Barack Obama has parlayed his political fame into big bucks

By CHRISTOPHER WILLS - sept 29, 2007

Barack Obama has two best-selling books, a nice salary as a senator and a wife with a handsome income. Earlier this year he reported assets of up to $1.14 million in addition to his Chicago home.

That's small change to some of his presidential rivals, but more than enough to create entanglements and controversies for Obama, a Democrat who has been positioning himself as a friend of the little guy on financial matters.

Recently, he scolded Wall Street executives for focusing too much on their own success and not enough on what's good for the whole nation. And he called for tax cuts for the working poor.

"I didn't just discover working folks on the campaign trail. That's what I've been doing my entire adult life," he told union members Tuesday as he recounted his experience as a community organizer and civil rights attorney.

Obama's own success allowed him to buy a $1.65 million mansion near the University of Chicago in 2005. Political insider Antoin "Tony" Rezko, who was under federal investigation, bought the vacant lot next door and sold part of it to Obama, giving the senator more space.

There has been no suggestion that the arrangement was illegal. Obama paid Rezko for the extra space. But Obama has since said it was a mistake to do business with Rezko, who was indicted last year on charges he sought kickbacks from companies doing business with an Illinois state pension fund.

Rezko and his companies contributed nearly $20,000 to Obama's state and federal races. Obama now has donated that amount to charity.

When he entered the U.S. Senate in 2005, Obama's salary jumped to more than $154,000 — nearly triple what he had been making as an Illinois legislator.

His sudden political stardom also brought him a three-book deal worth $1.9 million from Random House Inc. The deal includes a children's book, and Obama says he'll give $200,000 from that book to charity.

His contract gives Obama 15 percent of the sale of each hardcover book, 8 percent or more from paperbacks and 10 percent from audiobooks. His first book under the deal, "The Audacity of Hope," has sold more than 1 million copies since it was released nearly a year ago.

After Obama was elected to the Senate, his wife's income tripled thanks to a promotion she received at the University of Chicago Hospitals. When Michelle Obama rose from executive director to vice president, her salary increased from $121,910 to $316,962.

Obama says his wife's promotion was based on her merits — she's a Harvard Law School graduate — and not on his Senate victory. "You can't fault her for being smarter and better qualified for all sorts of jobs than I am," he said last year.

Mrs. Obama was also elected to the board of directors of an Illinois-based food supplier called TreeHouse Foods. For that, she was paid about $45,000 in 2005 and $51,000 in 2006.

But Wal-Mart is a major TreeHouse customer, and her husband has criticized the wages and benefits that Wal-Mart provides its workers. Mrs. Obama resigned from the TreeHouse board in May, citing the increasing demands of the presidential campaign, and she has also scaled back her hours for the university hospital system.

The government disclosure reports Obama has filed over the years, and the tax returns he has released voluntarily, reveal a relatively uncomplicated financial picture.

He has made money as a legislator, lawyer and lecturer at the University of Chicago. She has worked for the university and its hospital system and for TreeHouse. Their assets — which are between $457,000 and $1.14 million — are mostly in mutual funds and pensions.

That's paltry compared with some other presidential candidates. Democrats John Edwards and Hillary Rodham Clinton and Republican Rudy Giuliani are all worth tens of millions of dollars. Republican Mitt Romney is the wealthiest candidate in the race, reporting assets of between $190 million and $250 million.

Voters rarely seem concerned about whether a candidate is filthy rich or merely wealthy. Matt Bennett, who has worked on several Democratic presidential campaigns, said the main exception would if voters saw hypocrisy — a candidate talking like a blue-collar worker but spending like a movie star, for instance.

"They expect that their leaders are going to be well off, and for most people the difference between having a net worth of $1 million and $20 million is basically irrelevant," Bennett said.

Still, Obama's money is enough to raise occasional complications.

In 2005, Obama's broker invested more than $50,000 in two companies backed by some of his top campaign donors. Obama denied knowing anything about the investments, on which he lost about $13,000, and there was no evidence that he used his office to help the companies.

Ronald Powell, president of United Food and Commercial Workers Local 881 in Illinois, isn't interested in Obama's finances. What matters, he said, is that Obama has a record of working directly with poor families that wanted better lives.

"He worked the street. He knocked on doors," Powell said. "He speaks from personal experience."