Broadways Fortunes at Center of Illinois Senate Race
US Banker | March, 2010
A Chicago-area community bank’s capitalization struggle is evolving into a potential white-hot campaign issue in Illinois’ 2010 U.S. Senate race.
Broadway Bank, a $1.1-billion asset franchise owned by the family of Illinois state treasurer and Democratic Illinois Senate candidate Alexi Giannoulias, has been under FDIC orders since Jan. 25 to shore up is balance sheet after it lost $75 million in 2009 and reported that 20 percent of its loans were seriously delinquent.
That order came just one week before Giannoulias won the Feb. 3 Democratic primary, and has triggered an offensive by his Republican opponent looking to pin the bank’s woes on some of the decisions made while the Giannoulias was active at the bank.
“I think there’s no question that Alexi Giannoulias bears direct personal responsibility for reckless loans that could bankrupt the Broadway Bank,” said U.S. Rep. Mark Kirk, currently a GOP congressman, to the Chicago Tribune’s Clout Street blog.
Giannoulias said he has not worked at the bank in four years. But Sunday’s Tribune reports that while he was at the bank, he had previously serviced millions of dollars worth of property loans to Michael Giorango, a “convicted bookmaker and prostitution ring promoter” that have since gone bad.
The National Republican Senatorial Committee has harangued Giannoulias on not only the ties to Giorango, but the $70 million in dividends paid to the Giannoulias family in 2007 and 2008 (which the Giannouliases claim went into estate planning and corporate taxes following the 2006 death of Alexis Giannoulias, the founder of Broadway Bank and the candidate’s father.)
Demetrius Giannoulias, Broadway CEO and the Senate candidate’s brother, has indicated the family will need to raise $85 million by the end of April to stave off federal seizure. “Regulators aren’t cutting us any slack,” said Demetrius Giannoulias.
And neither is Kirk.
“I…worry that the possible collapse of the Broadway Bank will leave taxpayers left paying for Alexi’s reckless loans,” Kirk said.
Both candidates are running for the seat formerly held by Barack Obama.
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