Giannoulias’ Family Bank Problems ContinueFebruary 1, 2010 - 1:36 PM | by: Marla Cichowski
Less than 24 hours before election day in Illinois, the front runner for the U.S. Senate Democratic primary is facing more negative press surrounding his family’s bank.
Democratic candidate, Alexi Giannoulias, worked as Vice President and senior loan officer at Broadway Bank, founded by his late father, prior to getting elected State Treasurer in 2006.
New documents filed with the FDIC reveal Broadway Bank lost more than $75 million dollars in the past year. Just last week banking regulators ordered the bank to raise capitol and set aside more money for bad loans. Over the years the bank was heavily invested in real estate development deals. When the country’s housing market took a dive so did the bank’s finances. The community bank went from making more than $49 million in 2007 to losing $13 million dollar in 2008. Records show from 2007-2009 the bank also paid out dividends totaling $86 million. The Giannoulias campaign maintains the correct amount is $70 million.
When asked if the campaign would respond to the latest FDIC report, Giannoulias spokesperson, Kati Phillips, had no comment. In an email Phillips wrote, “No statement. All questions should go to Broadway Bank.”
The public relations firm representing Broadway Bank issued this statement: “The economic difficulties facing so many families, small businesses and communities have also affected the bank. In the fourth quarter, the bank wrote down a number of assets, which is reflected in our FDIC filings. We believe this is the last of the write downs and are confident that our capital will grow as we move forward.”
Last Thursday Giannoulias addressed the issue in front of reporters at his campaign headquarters in downtown Chicago by saying, “this isn’t something we were shocked by or surprised by. We knew it would be tough for a lot of people. We’ve been as transparent as we can be.” Giannoulias added, “I haven’t been there (the bank) for four years. I’m not involved in the management or the operation of the bank. When I left there it was a highly performing financial institution. But again it’s easy for me to look back four, five years ago and say I was there during the better days.”
Tuesday’s Primary Election in Illinois is not expected to draw a very high turnout. Average turnout for a primary election is typically around 35 percent. The latest polls show more than a third of likely democratic primary voters backing Giannoulias. His biggest threat is candidate David Hoffman – Chicago’s former Inspector General – who is closing the gap at 23 percent.