First lady Michelle Obama told the Democratic National Convention that "Barack and I were both raised by families who didn't have much in the way of money or material possessions."

It is a claim the president has repeated in his books, on the speech-making circuit and in countless media interviews. By his account, he grew up in a broken home with a single mom, struggled for years as a child in an impoverished Third World country and then was raised by his grandparents in difficult circumstances.

The facts aren't nearly so clear-cut.

Ann Dunham was just 18 years old when she gave birth to Obama. She was a freshman at the University of Hawaii. His Kenyan father, Barack Hussein Obama Sr., was a few years older than Ann. They were married against family wishes.

Obama Sr. does not appear to have been welcoming or compassionate toward his new wife or son. It later turned out that he was secretly married to a Kenyan woman back home at the same time he fathered the young Obama.

He abandoned Obama Jr.'s mother when the boy was 1. In 1964, Dunham filed for a divorce that was not contested. Her parents helped to raise the young Obama.

Obama's mother met her second husband, an Indonesian named Lolo Soetoro, while working at the East-West Center in Hawaii. They married, and in 1967, the young Obama, then known as Barry Soetoro, traveled to Indonesia with his mother when the Indonesian government recalled his stepfather.

In Indonesia, the family's circumstances improved dramatically. According to Obama in his autobiography "Dreams from My Father," Lolo's brother-in-law was "making millions as a high official in the national oil company." It was through this brother-in-law that Obama's stepfather got a coveted job as a government relations officer with the Union Oil Co.

The family then moved to Menteng, then and now the most exclusive neighborhood of Jakarta, where bureaucrats, diplomats and economic elites reside.

A popular Indonesia travel site describes Menteng: "Designed by the Dutch Colonial Government in 1920s, Menteng still retains its graceful existence with its beautiful parks, cozy street cafes and luxurious housing complexes."

In 1971, his mother sent young Obama back to Hawaii, where his grandmother, Madelyn, known as Toots, would become one of the first female vice presidents of a Honolulu bank. His grandfather was in sales.

Obama's grandparents moved the same year into Punahou Circle Apartments, a sleek new 10-story apartment building just five blocks from the private Punahou School, which Obama would attend from 1971 to 1979.

Obama explains in "Dreams from My Father" that his admission to Punahou began "the start of something grand, an elevation in the family status that they took great pains to let everyone know."

To his credit, Obama did not downplay Punahou's upscale status, noting in his autobiography that it "had grown into a prestigious prep school, an incubator for island elites. Its reputation had helped sway my mother in her decision to send me back to the States."

Obama also admitted in the book that his grandfather pulled strings to get him into the school. "There was a long waiting list, and I was considered only because of the intervention of Gramps's boss, who was an alumnus."

The school still features a lush hillside campus overlooking the Waikiki skyline and the Pacific Ocean. It was one of the most expensive schools on the island, and both Obama and his half sister Maya Soetoro-Ng received scholarships.

While the Dunhams were not among the wealthiest families on the island, he nevertheless studied and socialized with the children of the social and financial elite. Obama has said he didn't fit in at the school. But that's not how other Hawaiians remember it.

Associated Press writer Sudhin Thanawala reported from Honolulu in 2008 that "classmates and teachers say Obama blended in well. He served on the editorial board of the school's literary magazine, played varsity basketball and sang in the choir. He went on the occasional date."

In his recent book "Barack Obama: The Story," Washington Post reporter David Maraniss said the future chief executive often smoked marijuana with prep school friends, rolling up the car windows to seek "total absorption," or "TA." They called themselves the "Choom Gang."

Edward Shanahan, a retired newspaper journalist who now edits downstreet.net and makes no effort to conceal his admiration for Obama, retraced his Hawaii years shortly after the president was elected.

Shanahan wrote that Obama lived in a "well-off neighborhood near the University of Hawaii where Barry, as he was known, resided in a comfortable home with his mother and her parents before she took him to Indonesia."

Sanahan said "our tour ended up on the lush, exquisitely maintained and altogether inviting campus of Punahou School, which we can imagine was a place of great comfort for Obama."

Tellingly, Obama has never lived in a black neighborhood. Maraniss reported in his book that when leftist activist Jerry Kellman interviewed Obama for a community organizing job in Chicago, he asked Obama how he felt about living and working in the black community for the first time in his life.

Obama accepted the job but chose not to live among those he would be organizing. Instead, he commuted 90 minutes each way daily from his apartment in Chicago's famous Hyde Park to the Altgeld Gardens housing project where he worked.

It was an early instance of Obama presenting himself one way while acting in quite a different way.

Reporting for this special report by Richard Pollock, Examiner staff writer.

Next: Chapter II: The myth of the rock-star professor