Marathon Pundit: Giannoulias family's Broadway Bank loaned $20 million to felons while Alexi was senior loan officer

Friday, April 02, 2010

Giannoulias family's Broadway Bank loaned $20 million to felons while Alexi was senior loan officer

Fridays come with trepidation for the Giannoulias family--it's the day when federal bankers close failing financial institutions. But this Friday comes with different bad news--although there is some familiarity to it.

From the Chicago Tribune:

The family bank of Democratic Senate candidate Alexi Giannoulias loaned a pair of Chicago crime figures about $20 million during a 14-month period when Giannoulias was a senior loan officer, according to a Tribune examination that provides new details about the bank's relationship with the convicted felons.

Broadway Bank had already lent millions to Michael Giorango when he and a new business partner, Demitri Stavropoulos, came to the bank in mid-2004. Although both men were preparing to serve federal prison terms, the bank embarked on a series of loans to them.

Alexi Giannoulias took a senior position at the bank at about the same time and used it as a launching pad for his political career. But as he campaigns to step up from state treasurer to the U.S. Senate, he has tried to distance himself from the bank's business with the pair and has been reluctant to detail his role.

Broadway is now suing to recover millions of the pair's delinquent loans as the bank struggles to avoid a federal takeover. While Broadway lawyers now criticize Giorango's business practices, the newspaper's examination of court files, land records and public bank documents raises questions about the bank's decisions to make loans to men with criminal histories.

And lending money to crooks is not standard banking practice. "Banks are not supposed to be doing business with criminals," said banking consultant and former Texas Banking Commissioner Catherine Ghiglieri. "The onus is on the bank to make sure they know who they are dealing with."

Much of the rest of the article involves Alexi and Dimitri, the latter is now Broadway's CEO, diminishing the Democratic Senate candidate's role at the troubled bank. Good luck with that. "We need a banker in the treasurer's office" is what Giannoulias would say during the 2006 treasurer campaign. After his election, Alexi's office mismanaged a college savings fund called Bright Start, which lost about half of its value.

Illnois voters have a better choice for the Senate: Republican Mark Kirk.

UPDATE 12:10pm CDT: The Illinois Republican Party has a whole lot more.

Why Did Alexi Giannoulias Mislead the People of Illinois?

“Banks do not perform criminal background checks on their borrowers. If I knew then what I know now, would we have given these loans to these colorful characters? Absolutely not.” – Alexi Giannoulias, Chicago Tribune Editorial Board Interview, March 3, 2010. (Listen to the Audio Here)

"I learned of it primarily when I was running for the office of state treasurer...I mean, I don't remember the exact date, whether it was during the primary or during the general. I think it was during the primary...We didn't know about this, no." – Alexi Giannoulias, Chicago Tribune Editorial Board Interview, March 3, 2010. (Listen to the Audio Here)

“Demetris Giannoulias said the bank learned of Giorango's bookmaking and prostitution promotion convictions from a spring 2004 Tribune report detailing those cases…He said he asked Giorango about the convictions and Giorango said, ‘It's in the past. I don't do that anymore.’” – Chicago Tribune, April 2, 2010
Less than one month ago, Alexi Giannoulias took a tour of Chicago newspaper editorial boards to answer questions about his time as Vice President and Senior Loan Officer at Broadway Bank.

When asked specifically to answer questions about loans Broadway Bank made to convicted mobsters Michael “Jaws” Giorango and Demitri Stavropoulos, Giannoulias flatly denied he or his family had any knowledge of their criminal backgrounds when they approved those loans.

Demetris Giannoulias in Today's Chicago Tribune:

“Demetris Giannoulias said the bank learned of Giorango's bookmaking and prostitution promotion convictions from a spring 2004 Tribune report detailing those cases…He said he asked Giorango about the convictions and Giorango said, ‘It's in the past. I don't do that anymore.’” (Chicago Tribune, April 2, 2010)

Alexi Giannoulias One Month Ago:

Audio Available: “Banks do not perform criminal background checks on their borrowers. If I knew then what I know now, would we have given these loans to these colorful characters? Absolutely not.” (Alexi Giannoulias, Chicago Tribune Editorial Board Interview, March 3, 2010)

Audio Available: “I learned of it primarily when I was running for the office of state treasurer...I mean, I don't remember the exact date, whether it was during the primary or during the general. I think it was during the primary...We didn't know about this, no.” (Alexi Giannoulias, Chicago Tribune Editorial Board Interview, March 3, 2010)

“Mr. Giannoulias personally visited Florida to see property involved in a Giorango loan. Asked if he was aware then of Mr. Giorango's criminal past, Mr. Giannoulias replied, I didn't know the full extent of his legal problems.’ Full extent? Mr. Giannoulias declined to say more, despite several efforts to get him to elaborate on exactly what he knew and when he knew it. (Crain’s Chicago Business, March 3, 2010)

“Giannoulias denied, even though he went down to Florida to inspect the properties, that he was aware of Giorango’s mob ties.” (Chicago Sun-Times, “Giannoulias acknowledges family bank will probably fail,” March 3, 2010)