If Barack Obama becomes president of the United States after an excruciating two year test of will, fund-raising, and a determined effort by opponents to take him down, he will have to figure out not merely what to say about lofty issues, but what can actually be done. 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. Publishers Weekly described it as a “poignant, probing memoir of an unusual life . . . a resonant book.” The book received good reviews and sold about 10,000 copies, a modest success. 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.

In 2004, after a stint as a state senator in Illinois and an unsuccessful run for Congress, Obama got the U.S. Senate nomination. His Republican opponent dropped out in a sex scandal and his replacement, Alan Keyes of Maryland, never had a chance. 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. After Obama’s brilliant speech at the convention, the book took off. In just over two years, it has sold about 500,000 copies in the United States and is widely admired for its writing (all Obama’s) and message. “The absolute best book I’ve ever read,” wrote a woman on Barnesandnoble.com this month in a typical comment. A rough guess as to the royalties the book has earned from all its versions (Obama won a Grammy for his reading of the audio version) is about $1 million. This bonanza for Obama and Dystel was good fortune at its absolute earned best.

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.
After his victory, Obama, on the advice of friends I have been told, decided to replace Dystel as his agent with Robert Barnett, the formidable Washington lawyer who has represented the Clintons and a host of other major Washington political figures and writers. Whereas agents take a flat percentage of all the clients’ earnings—usually 15 percent these days—Barnett charges by the hour, which means that the bill is substantially smaller as a portion of the proceeds on big deals. Dystel, a feisty sort, was furious. I have no idea about the details of interaction between Barnett, Dystel, and Obama, but I would bet it was not warm and fuzzy.

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 that applies to members of Congress. The Audacity of Hope: Thoughts on Reclaiming the American Dream  was published this month to great fanfare and sold, according to Bookscan, the service that tracks about three-fourths of book sales, 67,000 copies in its first week.

Barack Obama is the most exciting new Democratic politician in years. He is glamorous, including a handsome portrait as cover-boy for Men’s Vogue. He is also now a multi-millionaire. He speaks well and writes well. Americans admire people who make the most of what they have and Obama is certainly doing that. I just wish that this virtuous symbol of America’s aspirational class did not move quite so smoothly into a system of riches as a reward for service, especially before it has actually been rendered.