Obama's $1.7 Million "Bookgate Scandal" Contract Revisited

Most people in the United States don't believe it's democratic for a German media conglomerate like Bertelsmann AG to monopolize control over the U.S. book publishing industry. Yet Democratic President Barack Obama still apparently has no program for reducing foreign corporate control of the U.S. book publishing industry and other U.S. media industries.

One reason Obama might not want to propose that U.S. anti-trust laws be enforced against German media monopoly conglomerates like Bertelsmann AG is that between Election Day 2004 and his swearing in as a Senator in 2005, Obama was given a $1.7 million two-book contract by the Random House/Crown Publishers/Alfred Knopf subsidiary division of Bertelsmann AG. By signing his lucrative book contract with the German media conglomerate's U.S. subsidiary before officially taking his seat in the U.S. Senate, Obama did not fall under various requirements for disclosure and reporting that applies to members of Congress who accept money from U.S. media conglomerates.

Like many U.S. Establishment politicians and U.S. television news correspondents and talk show hosts, Obama's 2004 book deal with the Bertelsmann AG subsidiary was arranged by Robert B. Barnett of the Washington, D.C. law firm, Williams & Connolly. Besides representing the special financial interests of U.S. Establishment politicians and U.S. television correspondents, Williams & Connolly lawyer Robert B. Barnett also represents the special interests of German corporations like Deutsche Bank and has coached Democratic Party presidential candidates before presidential debates since the 1980s.

As long ago as the 1990s, the Bertelsmann media conglomerate was the world's largest book publisher and the second-largest U.S. publisher. In 1981, Bertelsmann purchased Bantam Books and, in 1986, Bertelsmann took control of Doubleday and RCA Records. Its U.S. property by the early 1990s also included eight U.S. printing plants, Doubleday Book Shops in New York City and elsewhere, Dell Publishing, Arista Records and "Parents Magazine."

During the early 1990s, the administration of New York City's first African-American Mayor, a Democrat named David Dinkins, gave a $10.8 million special tax break to Bertelsmann AG when it purchased a 44-story Manhattan skyscraper for $119 million in March 1992.

Bertelsmann AG has been owned for many years by the family of Reinhard Mohn, who was a member of the Third Reich's Afrika Korps during World War II; and the same German firm published books for the Nazi regime in Germany between 1933 and 1945. During the early 1990s, the Mohn family still owned about 69 percent of the Bertelsmann/Doubleday/Bantam Books/Dell Publishers/Random House/Crown Publishers foreign-based media monopoly.

In his 2004 book The New Media Monopoly, Ben Bagdikian made the following reference to the German media conglomerate whose U.S. subsidiary gave President Obama a lucrative “book contract”:

“Like the other members of the Big Five that dominate the American media world, Bertelsmann’s list of media companies is lengthy. It requires nine typed pages. Thirty percent of its holdings are in the United States, bringing from this source alone $63 billion annually.

“Most of Bertelsmann’s eighty-two book subsidiaries were once freestanding, independent publishing houses, some of them household words not so many years ago—Alfred Knopf, Pantheon, Random House, Ballantine, Bantam, Crown, Doubleday, and Modern Library…

“With all its power, Bertelsmann is haunted by a ghost…

“…German sociologist Hersch Fischler discovered that, during the war, Bertelsmann had, in fact, been the largest publisher under Hitler. Among its 19 million books, it had large contracts from the Nazi Propaganda Ministry, including anti-Semitic tracts supporting Hitler’s insistence that Germans needed to take over central and western Europe…

“…Some board members and executives have been restive over Mrs. Mohn’s increasing power in replacing three executives and her appointing two of her three sons to operating influence within the giant firm…”

But don't hold your breath waiting for the stable of U.S. politicians who are represented by the Williams & Connolly corporate law firm to finally introduce some legislation to democratize power within the foreign-controlled U.S. book publishing industry in 2009 to insure that U.S. anti-trust laws are finally enforced within the U.S. mass media industry world.

An article by a Peter Osnos that was posted on The Century Foundation’s website (http://www.tcf.org/list.asp?type=NC&pubid=1425 ) on October 30, 2006 characterized Democratic President Obama’s 2004 book deal in the following way:

“…Here, as an indicator of how Obama operates in a practical realm, is the way he came to terms with the book business. In the process, he displayed ambition, real talent, luck, ruthlessness, and, in my view, questionable judgment about using public service as a personal payday.

“At Harvard Law School in February, 1990, Obama was elected president of the law review, and the New York Times did a profile of him as the first black leader of the publication. The article caught the attention of a young literary agent named Jane Dystel. A book proposal by Obama about his life was submitted to publishers and a deal was reached with Poseidon, a small imprint of Simon & Schuster, for what is known in the industry as “six figures” (about $125,000, I am told). Several years passed and Obama was too busy finishing law school and embarking on his career to get the book done. Simon & Schuster canceled the contract, which probably meant that Obama had to pay back at least some of what he had received of the advance.

“Dystel approached Henry Ferris, then a senior editor of Times Book at Random House. Ferris and I, as publisher, met with Obama, found his story fascinating, and believed he would finish the book. We paid an advance of $40,000.

“In June 1995, Dreams of My Father: A Story of Race and Inheritance was published. .. The book…sold about 10,000 copies…Times Books licensed the paperback rights to Kodansha, a Japanese publisher that was doing a series of multi-cultural books in the U.S. market. Eventually, Kodansha closed and the rights went back to Random House. When the Times Books franchise was sold to Holtzbrinck, all its inventory, including Dreams of My Father, became the property of Random House’s Crown Books Division.

“…When Obama was selected to be the keynote speaker at the Democratic Convention in Boston, Dystel, who had stayed in touch with Obama, had the idea of reclaiming rights to the book and reselling it. But an alert editor at Crown had already spotted it on the proverbial shelf and it was quickly reissued in paperback…A rough guess as to the royalties the book has earned from all its versions…is about $1 million….

“Now comes the part in which Obama showed a steely side and displayed an element of character which, while completely legal and entirely within his rights as a writer, makes me uneasy. Everyone agrees that our political system and values are being corroded by money. One subset of the cash culture is that public figures use books funded by large media companies to support a lifestyle that is possible only because their service to the country makes them salable. Generals Tommy Franks and Norman Schwarzkopf came home from their Persian Gulf stints and took about $5 million each to write about their triumphs. Bill and Hillary Clinton earned tens of millions of dollars telling the stories of their lives in the White House. As soon as Newt Gingrich led the GOP to a 1994 takeover of the House of Representatives, he signed a $4 million contract with Rupert Murdoch–owned HarperCollins. Revelation of the deal backfired on Gingrich. Eventually, he took $1 and royalties on copies sold. But the episode made Gingrich a target on ethics issues…

“Between Election Day 2004 and his swearing in as a Senator, Obama signed a two-book deal with Crown for “seven figures” (probably somewhere in the vicinity of $1.5–$2.0 million). By signing the contract before taking office, which Hillary Clinton also did on her book deal, Obama does not fall under various requirements for disclosure and reporting…”