Giannoulias responds as family bank faces troubles

January 27, 2010 9:05:37 PM PST
U.S. Senate candidate Alexi Giannoulias is defending his credentials following word that a Chicago bank owned by his family is having financial trouble.One of his opponents is already calling on him to drop out of the race.

Recent polls show Giannoulias with a comfortable lead over his opponents for the Democratic Senate nomination. Some of his opponents say man of the bank's problems can be blamed on Giannoulias who was the chief loan officer before he became the state's treasurer. Giannoulias dismisses that as desperate politics.

Alexi Giannoulias' father started Broadway Bank about 30 years ago and, over the years, it grew into a very successful business. Much of the bank's focus in recent years has been on real estate loans, a precarious business in this economy that has apparently led the FDIC to put the bank on notice with this consent order that will force them to raise tens of millions of dollars, sell troubled assets and improve management.

For the Giannoulias family which owns 100 percent of the bank, it is a crisis. Some of Alexi Giannoulis' primary opponents say it's reason enough not to vote for him.

"This is very strong evidence that in one of his only two jobs as the vice president of his family's bank the decisions he made led to what is now going to be the near failure of this bank," said David Hoffman , (D) U.S. Senate candidate.

Hoffman has been running ads questioning Giannoulias' history with the bank and linking him to a loan to convicted political fundraiser Tony Rezko. Cheryl Jackson, meantime, is calling on Giannoulias to withdraw from the race citing the fact his family withdrew $70 million in profits from the bank in the last couple years.

"Alexi Giannoulias and his family, they own 100 percent of the bank, and they pulled their money and their profits out of the bank which contributed to the insolvency at the bank," said Cheryl Jackson, (D) U.S. Senate candidate.

"There's nothing illegal about it but the fact is if they hadn't taken that money out the bank would be in better shape today than it is," said Joe Cahill, Crain's Chicago Business.

Crain's Chicago Business notes Broadway Bank's problems are similar to those of a lot of small Illinois banks, something another opponent says he understands.

"Here Mr. Giannoulias' family business is suffering from the economy and his opponents are trying to take advantage. That's wrong," said Jacob Meister, (D) U.S. Senate candidate.

Giannoulias says he hasn't worked at the bank in four years and he's not involved in the day to day business. But it is difficult on his family.

"It's the silly season. And with a few days left in the campaign, desperate candidates, candidates who are behind say silly things. It's not surprising. It's unfortunate. Because the fact is that the economy's awful," said Giannoulias.