Obama’s Bad Businessmen

The president’s most famous business supporters face financial losses, scandals

BY:

A slew of left-wing business moguls are on the skids thanks to poor investment decisions, questionable judgment, and accusations of bribery and cronyism.

Warren Buffett has lent his star power and his surname to President Barack Obama’s push for higher taxes, but his firm and its shareholders have not fared well during the Obama administration. Berkshire Hathaway has underperformed the Standard & Poor’s 500 Index by an average of eight percent over the past three years.

Buffett is not the only famous presidential supporter to fall from business grace.

Television titan Oprah Winfrey appears to have lost the golden touch that helped make her the richest self-made women in America and propelled Barack Obama from up-and-coming Illinois senator to the nation’s first black president.

Bloomberg News reported earlier this month that the Oprah Winfrey Network (OWN) may have lost as much as $330 million  since its launch due to poor ratings and lackluster demand.

Winfrey may be the most famous loser among Obama’s backers at the moment, but she is not the biggest.

Hedge-fund billionaire Philip Falcone has driven telecommunications company LightSquared into Chapter 11 bankruptcy. The Federal Communications Commission in February revoked its conditional approval of the LightSquared’s broadband wireless network project due to projected interference with GPS technology used by the military.

The Daily Caller reported at the time that the company received preferential treatment from the FCC with favorable regulatory decisions. Falcone offered to resign in April from the company’s board in exchange for short-term debt forgiveness.

Jeffrey Katzenberg, Obama’s largest campaign contributor, has also found himself embroiled in a bribery scandal. The SEC is investigating whether DreamWorks bribed Chinese officials in exchange for the right to produce and distribute DreamWorks films in that country. Secretary of State Hillary Clinton and Vice President Joe Biden joined Katzenberg as he signed an agreement to open a new facility in Shanghai.

Katzenberg attended George Clooney’s $16 million Hollywood fundraiser for Obama last week.

The tally of embattled businessman extends past politics into the nonprofit sector.

Chesapeake Energy and its CEO, Aubrey McClendon, have pumped millions of dollars into green lobbies to market natural gas as a cleaner alternative to coal energy, including $26 million toward the Sierra Club’s "beyond coal" campaign.

McClendon’ business has foundered while he has poured money into politics. The company was under investigation in March by the Justice Department for violations of the Clean Water Act. Reuters reported in April that McLendon has borrowed approximately $1.1 billion over the past three years in personal loans, including an undisclosed loan from a member of Chesapeake’s board.

Investors are calling for the CEO’s head after reports that McLendon was allowed to personally invest in the company’s oil wells. Chesapeake stock plummeted 13.8 percent on Friday, after a 38 percent plunge during the month of April.

Chesapeake is now turning to a vocal Obama critic to save the company from itself.

The Wall Street Journal reported Monday at midday that McLendon said he "wouldn’t be surprised" if billionaire Carl Icahn disclosed a large stake in Chesapeake.

"I don't normally get involved in politics, but this time I am," Icahn told an investors conference in 2008. "I don't think Obama really understands economics … he would be a terrible president."

Chesapeake’s value jumped 9.05 percent Monday after McLendon discussed Icahn’s speculated position in the company.

Bill McMorris   Email Bill | Full Bio | RSS
Bill McMorris is a staff writer for the Washington Free Beacon. He joins the Beacon from the Franklin Center for Government and Public Integrity, where he was managing editor of Old Dominion Watchdog. He was a 2010 Robert Novak Fellow with the Phillips Foundation, where he studied state pension shortfalls. His work has been featured on CNN, Fox News, The Economist, Colbert Report, and numerous print publications and radio stations. He lives in Alexandria, Va, with his wife and three daughters. His Twitter handle is @FBillMcMorris. His email address is mcmorris@freebeacon.com.

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