FACT CHECK: Giannoulias Misrepresents Kirk’s Thoughtful, Independent Record Attempts to Distract Voters from Broadway Bank Collapse and Loans to Organized Crime
Statement by Kirk for Senate Campaign Spokesperson Kirstin Kukowski: “While Congressman Kirk continues to present his thoughtful, independent vision to create jobs, lower taxes and fight corruption, Alexi Giannoulias is launching a negative campaign to distract voters from the loans he approved for convicted organized crime leaders and the risky investments that wiped out more than $70 million in Bright Start college savings for Illinois families. Illinois voters have a clear choice to change direction and restore integrity to the State of Illinois.”
Get the Facts: “Let’s, for a moment, remember where we all were ten years ago.” (Alexi Giannoulias, 4/12/10, City Club of Chicago) Ten years ago, Alexi Giannoulias was completing his first year at Tulane Law School after playing basketball in Greece while Mark Kirk was on active duty serving as the air intelligence officer for a Navy Prowler squadron patrolling northern Iraq.
Misleading Giannoulias Claim: “He hasn’t talked much about creating jobs”
Get the Facts: Congressman Kirk presented a comprehensive plan to spur small business job growth by lowering taxes, reducing costs and cutting government red tape (read more here). The Kirk plan is endorsed by the National Federation of Independent Business (listen here).
Group Endorses Kirk’s Small Business Plan
U.S. Senate candidate Kirk offers economic recovery ideas during expo
Kirk unveils plan to help small business, economy
Kirk to push small business “wish list”
We’re not the party of “no”
Misleading Giannoulias Claim: “And a lot of that has to do with the disastrous Bush policies enthusiastically supported by a Washington politician named Mark Kirk.”
Get the Facts: Congressman Kirk has been a champion for new advancements in stem cell research, calling to protect federal funding with the Stem Cell Research Advancement Act, H.R. 4808.
Kirk agrees with Obama, wants to protect stem cell research
Kirk wants to protect stem cell research
Kirk woos moderates with stem cell stance
Misleading Giannoulias Claim: “Because of the unprecedented real estate market collapse, the family business I left years ago, along with hundreds of other community banks, is now in peril.”
Get the Facts: Broadway Bank is nearing collapse because Alexi Giannoulias and his family pushed reckless lending schemes, “hot money” investments and loans to organized crime leaders – not exactly your typical community bank.
- On January 26, 2010, the Illinois Department of Financial and Professional Regulation and the FDIC ordered Broadway Bank to “cease and desist from engaging in unsafe and unsound banking practices.” (www.idfpr.com)
- From 2002 to 2006, Alexi Giannoulias increased Construction & Development loans from $80 million to $356 million – expanding such risky investments from 25 percent to 46 percent of the bank’s total loan portfolio. (Chicago Reader, Alexi’s Albatross, 12/3/09)
- From 2002 to 2006, Alexi Giannoulias increased the bank’s brokered deposits (also known as “hot money”) fourfold to $640 million. The typical bank at this point was growing brokered deposits at about 9 percent a year. (“As Lender, Senate Candidate Impacted Bank Woes,” New York Times, 1/30/10)
- When Alexi Giannoulias left the bank, the ratio of brokered deposits to total assets at Broadway was 68 percent, according to FDIC records. The average for all federally insured banks nationwide was 4.5 percent. (Chicago Reader, Alexi’s Albatross, 12/3/09)
Misleading Giannoulias Claim: “We saved 600 good-paying Illinois jobs.”
Get the Facts: Under the deal Giannoulias is taking credit for that kept Hartmarx open in Des Plaines, the company’s plant in Rock Island closed – 300 people lost their jobs. (Quad City Times, “Seaford workers pick up paychecks, say goodbye,” August 10, 2009)
During the primary election, a Quad Cities reporter noted the Giannoulias campaign’s oversight (Dispatch/Argus, “Elsewhere in politics,” December 5, 2009):
In new television ads, U.S. Senate candidate and state Treasurer Alexi Giannoulias is touting his role in the sale of the Hartmarx clothing manufacturer, and by extension, Seaford Clothing Company in Rock Island.
“In tough economic times, it’s important that we send people to Washington that know what it takes to create and save American jobs,” his campaign released. “When the workers of Hartmarx needed someone, Alexi was there.”
Granted, 600 or so Illinois jobs were saved by the sale of Hartmarx. But perhaps no one mentioned to Mr. Giannoulias’ campaign that Seaford Clothing Company did indeed close, leaving more than 300 people out of work.
Misleading Giannoulias Claim: “We stood up to Oppenheimer when it mismanaged Bright Start.”
Get the Facts: Alexi Giannoulias’ decision to invest Bright Start funds in Oppenheimer’s high-risk fund wiped out $150 million in college savings for Illinois kids. Giannoulias brokered a secret settlement agreement to recover only half those funds. Now Alexi Giannoulias will only allow Illinois families to collect the settlement money if they promise not to sue him. Meanwhile, Giannoulias still refuses to break the state’s contract with Oppenheimer.
“In recent months, Giannoulias has come under fire for his stewardship of the $2 billion Bright Start program, a college savings plan that is supposed to allow parents to put away money and earn interest on the cash for their children’s education. The fund lost more than $85 million last year in large part, Giannoulias has said, because of the management of OppenheimerFunds. (John Chase, “Bright Start Funds Used For New SUV,” Chicago Tribune, 5/4/09)
“The losses in a mutual fund that was part of the Illinois Bright Start college savings plan totaled about $150 million in 2008, more than double what the state had previously disclosed. As a result, families will recoup about half of what they lost, where six months ago some expected to recover a higher percentage of their losses.” (Chicago Tribune, “College Fund Settlement Less Than Expected,” December 23, 2009)
However, what parents may not be expecting is who else gets a legal waiver under the settlement letter: Illinois Treasurer Alexi Giannoulias. That’s right. The settlement letter releases from all future claims not only Oppenheimer, which is paying that $77.25 million, but “the Office of the Illinois State Treasurer” and its sundry assistants and consultants, on whose watch the $150 million was lost. (Greg Hinz, “Alexi’s good deal,” Crain’s Chicago Business, 4/5/10)
Now, it’s time for the State of Illinois to exact retribution by canceling its seven-year contract with OppenheimerFunds, a contract that runs until 2014. Surely, the estimated 4,400 students and families who lost nearly half their money in mismanaged Bright Start accounts should get the satisfaction of seeing that the fund management company is also paying a price. And that’s The Savage Truth. (Chicago Sun Times, “Time for Bright Start to dump Oppenheimer,” 3/31/10)
Misleading Giannoulias Claim: “I became the first senate candidate in Illinois history to refuse money from federal lobbyists and corporate PACs.”
Get the Facts: Despite his campaign pledge not to take campaign contributions from lobbyists, Alexi Giannoulias has accepted more than $59,000 from 41 lobbyists registered with the State of Illinois, including more than $23,000 from 15 lobbyists whose firms are registered to lobby the State Treasurer (Sources: Illinois Lobbyist Search, Federal Election Commission Reports): Alexi Giannoulias also refuses to swear off contributions from the Democratic Senatorial Campaign Committee and Democratic National Committee, which can funnel millions of dollars in corporate PAC contributions to his campaign. Giannoulias accepted more than $1.98 million from businesses and unions for his state campaign fund, Citizens for Giannoulias (Source: Illinois State Board of Elections) and already accepted $93,500 from federal PACs for his Senate campaign. (Source: Center for Responsive Politics)
Get the Facts: Giannoulias Campaign Chairman, Senator Dick Durbin, accepted more than $6.5 million in campaign contributions from federal PACs – $4.4 million from corporate PACs alone. (Source: Center for Responsive Politics) He also accepted $663,000 in campaign contributions from lobbyists, $1.46 million from Big Banks and Securities, and $1.45 million from the health care sector. (Source: Center for Responsive Politics)
Key Questions Left Unanswered Today:
1. Why did the Giannoulias campaign say Alexi had “no role with these two individuals [Michael ‘Jaws’ Giorango and Demitri Stavropolous]” when Giannoulias previously admitted that he did?
“Giannoulias spokeswoman Kathleen Strand said he had ‘no role with these two individuals’…” (Associated Press, 4/2/10)
“He described Giorango as ‘a very nice person’ and questioned whether Giorango actually was a criminal. ‘Is he a crime figure?’ Giannoulias asked. ‘I don’t know what the charges are that makes him this huge crime figure.’” (Chicago Tribune, 3/15/06)
Giannoulias said he didn’t negotiate the loans for Michael Giorango, a convicted bookmaker and prostitution promoter, but he is responsible for servicing nearly all of the loans at his family’s Broadway Bank. ‘So I am involved, and I do take responsibility for the loans that the bank makes,’ said Giannoulias…” (CBS 2 Chicago, 4/26/06)
“‘If every time someone got arrested the bank threw them out, I think it would be a problem,’ Alexi Giannoulias said. ‘We look at the commercial viability of loans, and that’s where we make our credit decisions.’” (Associated Press, 4/8/06)
2. Why did Broadway Bank continue to loan money to Michael “Jaws” Giorango and Demitri Stavropolous after the Chicago Tribune identified them as organized crime leaders in 2004?
“Demetris Giannoulias said the bank learned of Giorango’s bookmaking and prostitution promotion convictions from a spring 2004 Tribune report detailing those cases… He said he asked Giorango about the convictions and Giorangosaid, ‘It’s in the past. I don’t do that anymore.’” (Chicago Tribune, 4/2/10)
3. Why did Alexi Giannoulias meet with Michael “Jaws” Giorango in Miami after the Chicago Tribune identified him as an organized crime leader?
“Giannoulias said he traveled to Miami ‘about a year or two ago’ to inspect property the bank had financed for Giorango and met with him there. Giannoulias declined to provide details of that meeting.” (Chicago Tribune, 4/27/06)
4. If Giannoulias is now downplaying his role at Broadway Bank, does that mean the cornerstone of his 2006 campaign for State Treasurer was baseless?
Giannoulias is downplaying his role at the bank now:
“Alexi Giannoulias, who started his professional career at the bank in 2002, said in his statement that he was ‘one of’ the senior loan officers at the bank and was not a member of the loan committee that approved the financing forGiorango.” (Chicago Tribune, April 2, 2010)
“Alexi Giannoulias’ role was limited to ‘getting the appraisals ordered, getting the loan documents prepared, coordinating with attorneys, getting commitment letters prepared. All that kind of stuff,’ Demetris Giannouliassaid. Chicago Tribune, April 2, 2010)
But he used to claim he was the Chief Loan Officer:
“State Treasurer Alexi Giannoulias, Kirk’s Democratic opponent for U.S. Senate, has said that as chief loan officer of his family’s bank from 2002 to 2006, he did not check loan applicants’ arrest records.” (Chicago Sun-Times, 3/13/10)
“You have to understand that it was the family business – I did everything there.” (Chicago Reader, 12/2/09)
“Prior to taking office, Giannoulias served as vice president and senior loan officer at Broadway Bank…” (Official State of Illinois Biography, Current)
“Broadway Bank is trying to recoup $12.9 million from two Chicago crime figures, rekindling a controversy as the bank’s former chief loan officer, state Treasurer Alexi Giannoulias, gears up to run for the U.S. Senate.” (Crain’s Chicago Business, 7/13/09)
As the Chicago Tribune put it:
“When the family bank was flying high and Giannoulias had his eye on the treasurer’s office, he was the senior loan officer, but when the tough decisions were made or the questionable characters came to call, it was almost always Alexi’s day to empty the wastebaskets.”
