Giannoulias Family Bank & U.S. Senate SeatJanuary 27, 2010 - 12:54 PM | by: Steve Brown
Giannoulias Family Bank Looms Larger in Illinois’ Democratic primary for the US Senate seat once held by President Barack Obama.
State Treasurer Alexi Giannoulias, the front-runner in the contest, has been consistently dogged by questions about Broadway Bank.
It is the Giannoulais family business and just a few years ago was among the best performing community banks in the country. But Fox News has learned Broadway Bank is getting public relations help from the global powerhouse firm of APCO Worldwide. (More about the firm in a bit.)
When the US housing market hit the skids…Broadway Bank (which invested heavily in development deals) took a serious hit. Broadway went from making $49-million dollars in profit in 2007…to losing over $27-million dollars through the the first nine-months of 2009. (2009 year-end figures from Broadway are not in yet. More too on that in a bit.)
At the same time the bank went from money-maker to money-loser…it was paying out tens of million in dividends (or profits) to bank stock-holders. During the same three-year period (2007-2009)…FDIC records indicate Broadway Bank paid shareholders $86.3-million. Giannoulias acknowledges he owns some of that stock. Giannoulias says he owns only 4% of the shares. If true…Giannoulias potentially stood to gain some $3,450,000 in dividends.
Not only is it likely Giannoulias profited from a bank now hemmoraging money…he also worked there. Before getting elected State Treasurer…Giannoulias was a bank officer.
When asked about the money he and other family members may have made in dividend payments from Broadway…Giannoulias consistently says, “You’ll have to ask the bank.”
We did. Fox News asked for the 2009 year-end statement on a number of occasions…and when the report would be submitted to the FDIC. Our questions…left on voice mail with bank officer Kaushik Pancholi were not answered.
When we aired our original report Monday on the IL Senate race…the Giannoulias campaign insisted our numbers were wrong. An e-mail from the Giannoulias campaign stated Broadway share holders were only paid $70-million dollars.
We replied with the figures we originally reported…provided the totals…and where we found them…which again was on documents submitted to the FDIC by Braodway Bank.
The next response we got was from Tilden Katz at APCO Worldwide. In an e-mail exchgange…Katz indicated he was representing Broadway Bank and he pointed out:
“As (Chicago) Crain’s reported in September, the parent holding company issued $70 million in dividends to shareholders in 2007 and 2008 all of which were reviewed by accountants and approved by regulators. Additional money from the parent holding company was used to pay off a loan.”
We are still awaiting more information about this loan Broadway Bank reportedly paid and who loaned the money to the bank in the first place…but the appearence of APCO Worldwide is noteworthy.
APCO is headquartered in Washington with 31 offices around the globe…including Chicago. Its clients include non-for-profits organizations, governments, industry associations and corporations. One of APCO’s specialties listed on its website is ‘crisis management’.
Now…if Broadway Bank is in ‘crisis mode’…it may not emerge until after the February 2nd primary.
FDIC spokesman David Barr explains that the year-end balance statements (known as ‘The Call Reports’) are not due from banks until 30-days after the quarter ends. That’s January 30th…a Saturday. The next business day for the FDIC would be Monday, February 1st. Barr says typically…it takes a couple of business days to get Call Reports on-line for the public to view them.
A couple of days later in this case would be February 3rd…the day AFTER primary voting in Illinois is over.