Despite the recent failure of his family’s Broadway Bank, Giannoulias aims to go forward with “renewed determination” to bring change to the nation’s capital.
From television to newspapers, 2010 has been designated a nocuous year for Washington incumbents—regardless of party affiliation. With Tea Party demonstrations inciting rancor over big government and egregious spending, voters have yclept both congressmen and senators as problem advocates, blaming current officeholders for everything from massive unemployment to record-breaking deficits. But since the failure of Illinois’s Broadway Bank, incumbent U.S. Representative Mark Kirk has been less concerned about losing his seat, wielding the bank’s distressed finances as a weapon to derail his opponent’s campaign. The Republican representative will face off against Democrat Illinois Treasurer Alexi Giannoulias on November 2 in a tight race for Barack Obama’s former U.S. Senate seat.
“Fighter” for the Working Class
“When I decided to run (for the U.S. Senate) I knew it was going to be tough,” Giannoulias told a Chicago crowd of supporters during a speech at the civic club. “But I didn’t get into this race because I thought it was going to be easy.”
The coveted U.S. Senate seat would be a guerdon for either party but especially for Republicans looking to reclaim a congressional majority during the fall elections. Kirk, a five-term representative and a moderate on social issues such as abortion, raised $2.2 million in the first quarter of the year; Giannoulias raised $1.2 million. The announcement that Broadway, a major Chicago-based real-estate lender that lost $75 million last year, failed to raise the nearly $85 million in new capital by the deadline regulators imposed, sent a frisson of excitement amongst Illinois Republicans. The Kirk campaign is attempting to use the failed business to portray his opponent as a “reckless” banker. Kirk maintains the bank’s failure is only a taste of the fiscal irresponsibility voters can expect from Giannoulias in the Senate, citing “years of risky lending and poor investments.”
The Democrat campaign flouts Kirk’s accusations, claiming the GOP is using Broadway’s loans to divert attention from more substantial issues, such as jobs and the economy. In a televised campaign ad entitled “Fighter” that was released following the bank’s closure, the Democrat calls Kirk “a rubber stamp for Washington’s recklessness” and claims working families need someone who understands what it means to struggle in today’s economy:
“I understand firsthand the hardships this economy has created for the people of Illinois. If we had more people like that in Washington, our economy would not be in the mess it is today.”
Giannoulais says Broadway was a family-run business owned by his father, an immigrant from Greece who came to America and founded the bank over three decades ago “to help people achieve the American Dream—people who couldn’t go to big banks.”
Demetris Giannoulias, President and CEO of Broadway Bank and Alexi’s brother, issued a statement claiming the closure was “difficult” for his family, the community and “for all those who built businesses and protected their savings with the help of this bank. We fought to carry out the vision my father had when he founded Broadway Bank thirty years ago, but our bank . . . has struggled during these challenging times.”
Giannoulias served as Broadway’s Senior Loan Officer until he was elected treasurer four years ago. The Democrat, who called the bank’s closure “incredibly sad and heartbreaking,” for his family, said the bank’s finances were in “good shape” when he left the business and according to every independent analysis, Broadway was “one of the best performing (banks) in Illinois.”
He blames the real estate market crash for the business’s failure. During a press conference, Giannoulias claimed the economy had sailed into “uncharted waters” and hundreds of community banks are now struggling and being forced to close their doors in the wake of the “economic tsunami.” The FDIC announced that Broadway was among seven Illinois banks that had failed.
“Unlike the big Wall Street banks, there was no bailout for my father’s bank. Family businesses are dealing with challenges we never would have foreseen. We’ve seen family businesses go under on every block, on every corner,” Giannoulias states in his ad.
The bank’s deposit accounts were transferred to MB Financial. Former Broadway Bank employees will become employees of MB Financial, an FDIC spokesman said. Giannoulias claims his family will be taking a “massive financial loss” due to the bank’s closure and claimed he would not take advantage of a stimulus bill provision allowing him to write off business losses.
Giannoulias’s campaign is confident they can still win the election in spite of the recent developments with Broadway. A Giannoulias spokeswoman called the Illinois Treasurer a man who “keeps defying the odds.” Citing a “blistering” primary campaign during which Giannoulias’s opponent spent $2 million in an effort to defeat him, she claims Giannoulias has “kept this race within the margin of error.” The spokeswoman says the campaign “will be close to the very end.”
And she may be right. Democrats outnumber Republicans in Illinois, and Obama remains a popular figure in the state. Furthermore, the campaign says many of the bank’s customers are loyal supporters of the Illinois Treasurer and will not hold the bank’s failure against him. Although Broadway’s closure plays as a nodus for the Democrat campaign, Giannoulias, 34, isn’t allowing the minor setback to deter his focus, keeping both eyes fixed on Capitol Hill.
A “Big Issue”?
While the bank’s closure remains a major front for Republican attack, Giannoulias’s campaign is targeting Kirk with contributing to high unemployment, which currently hovers near 12 percent in the state and 10 percent nationally. Kirk’s spokesperson, Kirsten Kukowski, maintains the Congressman remains “focused on creating jobs, rebuilding our economy, reducing spending, lowering taxes and restoring integrity to government.”
But the Giannoulias campaign argues the incumbent’s voting record belies his constituent-friendly rhetoric. Giannoulias’s “Fighter” ad portrays Kirk as a “Washington politician” who just “doesn’t get it.” The ad says Kirk’s claims in support of job creation are fallible and states that the Republican candidate “voted for the Bush policies that got us into this mess, including tax breaks for companies that ship jobs to China.” A narrator goes on to say that Kirk “has the nerve to vote against extending unemployment benefits, saying unemployment is not a big issue.”
“People want someone who’s gonna fight for them, someone who’s been through tough times, someone who’s seen and looked those (economic) problems in the face and continues to move on and continues to fight and to struggle for people,” Giannoulias says in the ad.
Kirk shot back with criticism over some of Giannoulias’s decisions during his four years as the Senior Loan Officer at Broadway, citing revelations that the bank loaned $20 million to two convicted felons and made deals with “mob figures” such as Tony Rezco, a central figure in the corruption case surrounding then-Illinois Governor Rod Blagojevich.
Kukowski says the kerfuffle over the Broadway Bank is not an issue constituents will easily dismiss: “While Alexi Giannoulias may want to move on from the failure of the Broadway Bank, there are many questions he needs to answer surrounding the bank and his reckless business practices that speak directly to his experience and worthiness to serve in the U.S. Senate. These include why the FDIC had to offer nearly a 20 percent discount in order to find a buyer for Broadway and why while he was Chief Loan Officer brokered deposits grew fourfold and risky construction and development loans rose to 45 percent of the bank’s portfolio.” Kukowski also cited the $394 million in losses the bank cost the FDIC—the fourth most expensive Illinois bank failure in the past ten years.
Helping Working Families
Despite remarks from the Kirk campaign, Giannoulias contends that the Republican candidate and those of his ilk have spent the last decade in Congress supporting the Wall Street firms that served as the impetus for the downward spiral of the economy, immuring the nation in a debtor’s prison. On the offensive, Giannoulias says Kirk has been too involved in cozy relationships with big banks that have crushed Main Street.
Helping working class Americans “start businesses, build homes and follow their own dreams” was part of Broadway Bank’s mission, according to Giannoulias. The U.S. Senate candidate is re-establishing that mission, touting his agenda for backing universal paid family medical leave. The medical leave allows families to receive pay when they give birth, adopt a child or become gravely ill.
Giannoulias says that following passage of the original Family Medical Leave Act, several families in the private sector were concerned that it would destroy businesses and play as a “downfall.” He says “from that perspective, (universal leave) has actually become even more efficient.”
Kirk’s campaign questions Giannoulias’s commitment to American families after the Democrat backed a call for a state income tax increase to help decrease the state’s record $13 billion budget deficit.