Giannoulias defends family bank after GOP attacks

March 4, 2010 4:39:13 AM PST
U.S. Senate candidate Alexi Giannoulias is defending his family's business, hoping to dispel claims from his opponent that Broadway Bank made bad loans. But Giannoulias says his family's bank is struggling.

Giannoulias made the media rounds Wednesday to respond to Republican attacks that link him to trouble at the Broadway Bank. Eight months before the November election, the Democratic candidate is putting the issue front and center, perhaps diffusing it before the fall campaign.

"Like thousands of other businesses and families that are dealing with enormous challenges, unfortunately, my family is not immune to these same challenges," Giannoulias said.

Giannoulias says he hasn't given up hope that the Broadway Bank, owned by his family, will survive. But controversy surrounding the bank, fueled by Giannoulias's political opponents, has made it difficult for Broadway to raise the $80 million that federal regulators say it needs to remain open.

"I hope they can, and I really want them to. I think the next few weeks, next couple months are going to be critical," said Giannoulias.

Democrat Giannoulias was Broadway's chief loan officer until his election as Illinois treasurer in 2005. When he left, he says, the bank was in good financial condition. And, he says, only a small percent of the loans he made went bad.

"Less than 9 percent that are currently not performing were even around when I was there. I still take responsibility for that 8.5 percent," said Giannoulias.

Republican US Senate candidate Mark Kirk says Broadway's current problems are rooted in reckless and risky real estate loans that Giannoulias made five-to-eight years ago.

"Alexi Giannoulias engaged in the same kind of reckless lending that brought our US economy to its knees," Kirk said Monday.

But Giannoulias calls Kirk dishonest for blaming the nation's economic problems on small community banks like Broadway and not the Wall Street banks that he says Congressman Kirk voted to bailout last year.

"We can't afford to give Mark Kirk a promotion after he's done all these favors for Wall Street banks and misrepresents what community banks, which in many instances are the pillars of their communities, do every single day," Giannoulias said.

Congressman Kirk was in Washington Wednesday. ABC7 News called for a response to what Giannoulias said Wednesday. Eric Elk, a spokesman for Kirk's campaign, issued the following statement to ABC7 News:

"The coming election offers the people of Illinois a clear choice to change direction, create jobs and clean up corruption. Congressman Kirk brings a thoughtful, independent record of fighting for jobs and reform while Alexi Giannoulias brings a record of poor judgment, reckless behavior and mismanagement of public funds. Alexi's failure to take responsibility for his risky banking practices, loans to organized crime figures like Michael "Jaws" Giorango and $70 million loss of Bright Start college savings funds will not go unnoticed by the citizens of Illinois. After Rod Blagojevich and Roland Burris, we won't get fooled again."

David Hoffman made the Broadway Bank an issue during the primary campaign. It didn't get much traction then. Perhaps, if the bank actually fails, it will be a different story.