By Steve Rhodes
As the Reader’s Mick Dumke points out in “Alexi’s Albatross,” state Treasurer Alexi Giannoulias continues to be dogged by his association – and performance – with his family’s Broadway Bank. The ambitious upstart overcame questions about Broadway to win statewide office in his first foray into politics, but those questions continue to loom over Giannoulias’s run for U.S. Senate. Let’s take a look at Dumke’s piece – which also illuminates Giannoulias’s relationship with Barack Obama – to find out why.
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First, about that first run. How indeed did an unknown capture the treasurer’s office in his first race?
“Four years ago Giannoulias was a 29-year-old officer at the bank, and known in political circles – if at all – as the guy who’d helped Barack Obama raise lots of money in the Greek community. Then Obama paid Giannoulias back, endorsing him in TV spots that propelled him to a come-from-behind win in the 2006 Democratic primary for treasurer.”
He raised a lot of money for Obama, that’s how. Pure and simple.
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“After graduating in 1998, Alexi played pro ball for a year in Greece, then enrolled in law school at Tulane. His JD in hand, he returned to Chicago and took a job as a loan officer at Broadway Bank. Within two years he’d been named senior loan officer and a bank vice president.
“It’s not clear what responsibilities came with these titles. He’s said that as VP he oversaw all of Broadway’s lending – but he’s also said he was really just the guy who serviced the bank’s loans – overseeing things like billing and payment collection – while more senior officers, including his older brother Demetris, negotiated the deals and made the final decisions. When I pressed him to specify his job descriptions at each stage of his employment at the bank, he laughed.
“‘You have to understand that it was the family business – I did everything there,’ he said. ‘Sometimes I was a teller and sometimes I serviced loans – whatever we needed’.”
It was a family business. Giannoulias got his job through old-fashioned nepotism. His description of his duties will become more important as we go along.
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“But experts and community leaders say Broadway developed a reputation for giving out loans to just about anyone who walked in the door.”
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“Among the recipients of loans while Alexi worked full-time at the bank were: Michael Giorango, a Florida developer who’s been convicted of running bookmaking and prostitution rings; Boris and Lev Stratievsky, a father-son team later convicted of laundering money for Ukrainian drug dealers; and Tony Rezko, the developer-businessman-political fixer who was eventually convicted of fraud and money laundering for his role in pay-to-play schemes during the administration of Governor Blagojevich. Giannoulias and current bank officials have said all of them were creditworthy when the loans were issued.”
Depending on what you mean by “creditworthy.”
On the other hand, why should an association with Rezko be held against Giannoulias when it wasn’t held against Obama?
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“In 1998 Giannoulias met state senator Barack Obama playing pickup basketball at the University of Chicago rec center. In addition to Obama’s competitive fire (‘He’ll stack the teams so he’s with the winner,’ he says), Giannoulias says he was impressed by Obama’s smarts, friendliness, and passion. The two became friends, hoops buddies, and, most significantly, political allies.”
So, one, Obama is a prick. Two, how convenient for the both of them. I thought only Todd Stroger picked up political acolytes during pick-up basketball games. But do you think Obama would have become buddies with Giannoulias if he was poor?
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“Friends say he talked up Obama long before there was any buzz about him. ‘I remember people asking him, Wait, who is this Barack guy?’ says Sean Conlon, a Chicago-based real estate developer and consultant.”
You mean after eight years in the legislature Obama wasn’t the star his campaign presented him as? You’d think he would’ve been a household name for the way he purportedly changed and unified Illinois.
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“Obama appears to have politicized Giannoulias. He’d never run for anything, never been a member of a political organization, never worked on a campaign. ‘He wasn’t very public at all until he started to run for office,’ says a north-side community activist who didn’t want to be named because of ongoing relationships with Giannoulias’s family and Broadway Bank. ‘He didn’t go to any community events. He had no policy experience. Then all the sudden he started talking about public service’.”
And how badly he wanted to serve one term as state treasurer to serve his country.
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“But Giannoulias had some advantages. He was bright, he had people skills, he had money, and through the bank he already had some political connections. Secretary of state Jesse White and alderman Walter Burnett both had accounts at the bank – as did Obama, for that matter.”
Huh. Why would Obama, who lived in Hyde Park, have an account at a bank in Uptown?
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“His family knew most of the elected officials on the north side and had contributed to a number of their campaign funds – recipients included White, Schakowsky, Blagojevich, state reps Harry Osterman and Dan Burke, Cook County Board president John Stroger, county commissioners Forrest Claypool and Roberto Maldonado (now alderman of the 26th Ward), county Board of Review commissioner Joe Berrios (now chairman of the Cook County Democratic Party), and aldermen Burt Natarus and Manny Flores.”
And yet, he never showed any interest in politics until he met Obama. Huh.
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“Giannoulias also reached out to some of the elected officials he and his family had supported. Schakowsky says she was impressed from their first meeting. ‘I always want to know, when young people come to me, if they want to be somebody or if they want to do something,’ she says. ‘After a 40-minute conversation I thought he was the kind of guy who really wanted to do something’.”
He didn’t know what, but something.
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“Still, Schakowsky says she was ‘skeptical’ when Giannoulias told her he wanted to run for treasurer. ‘A young guy who wants to start out in a statewide office? I’ve heard that before,’ she says. ‘But I was just immediately taken with him’.”
And his wallet.
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“Schakowsky was so smitten she served as Giannoulias’s political tour guide, taking him with her to events, introducing him around, and offering advice. ‘Since he was a novice, I wanted him to be talking to and meeting the right people,’ she says.”
But he already knew Tony Rezko!
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“But the single biggest factor in the race was Obama’s willingness to speak out for Giannoulias on the air – at the time, the freshman senator was one of the most popular politicians in the world. Asked by reporters why he was going to bat for an unknown candidate in a down-ballot office, Obama was frank about wanting to return a favor. ‘He was critical for me in terms of reaching out to the Greek community, other ethnic communities in the city,’ he said. ‘He was there from the start, when people didn’t give me a shot’.”
So there you have it. Alexi Giannoulias is our treasurer today – and maybe our U.S. senator tomorrow – because Obama was repaying a political favor to a rich kid who raised a boatload of money for him.
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“In a 30-second TV spot, Obama praised Giannoulias in a way that seemed far more personal than the typical campaign sound bite. ‘He’s one of the most outstanding young men that I could ever hope to meet,’ Obama said as the ad showed images of Giannoulias at a desk, apparently hard at work.”
Doing what, approving loans?
“He’s somebody who cares deeply about people. He got that from his family.”
I thought he got that from you.
“Alexi Giannoulias – he’s going to be an outstanding treasurer.”
Alexi Giannouiias – he did me a huge favor and I’m here to repay it.
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“Under serious questioning, though, he sometimes faltered. When the Tribune’s editorial board asked him how he could address the funding shortfall in the state pension system, Giannoulias said he wasn’t sure.”
Outstanding!
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“Just days before the election, news outlets ran stories about Broadway Bank loans in the 1990s and early 2000s to Giorango, the Florida developer with ties to bookmaking and prostitution – stories prompted by a pre-primary mailer from the Madigan-led state Democratic Party declaring that Giannoulias was ‘friends’ with mobsters.
“Giannoulias said privacy laws prohibited him from getting into details, but he noted that there was nothing illegal about the loans. ‘We lend money to people who we trust from a business standpoint,’ he said at a news conference. ‘We’re a safe and sound financial institution and we run a good business.’ He added that these loans were irrelevant to his campaignhe’d been in law school when they were issued.
“That was true – but Giannoulias himself had overseen a couple of loans to Giorango in 2005, and the Tribune soon dug up records of those.”
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“His general election opponent, Republican Christine Radogno, seized on the controversy, accusing Giannoulias of ‘an association with organized crime’ and questioning what he’d actually done at Broadway. ‘When it was convenient he was the vice president in charge of loans, but when they became an issue he wasn’t involved,’ she says . . . Obama said Giannoulias needed to do a better job of explaining the loans to voters.”
I mean, how could he associate himself with Tony Rezko?!
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“On January 9, 2007, his first day at his new job, Giannoulias delivered on his campaign pledge to ban contributions to the treasurer from any firm doing business with the office. He also prohibited office employees from donating to the treasurer’s political fund. ‘Trading political money for political favors is a way of doing business that seems ingrained in our system of government,’ he declared.”
Flashback: “Obama was frank about wanting to return a favor. ‘He was critical for me in terms of reaching out to the Greek community, other ethnic communities in the city’.”
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Comments welcome.
Posted on December 10, 2009