Giannoulias: $150 million of hubris

At the February Illinois Republican unity breakfast, Alexi Giannoulias' predecessor as state treasurer, Judy Baar Topinka, said of her twelve-year tenure that she ran a "good honorable, outstanding office that never lost money."

Giannoulias can't make the same claim, although he has the hubris to claim Bright Start, a college savings fund, as a success on his campaign web site and in television commercials. But one of those funds within Bright Start, the Core Bond Fund, was a big money loser for its investors--ordinary Illinoisans saving money for the children's college education. It was marketed as a conservative investment option that would invest in "investment grade bonds and U.S. government securities." Oppenheimer was put in charge of the fund by the treasurer's office; in late 2007 it changed the focus of that fund. Crain's Chicago Business' Greg Hinz reported last year that it became "heavily invested in mortgage-backed securities, far beyond what its benchmark specified. But [Giannoulias] kept putting new Bright Start money into the fund for another seven months."

In January of 2009 Giannoulias informed Bright Start investors of fund losses--by then the Core Bond fund had lost 38 percent of its value. Five months later Alexi's office announced a "tentative, handshake deal" with Oppenheimer that would recoup 90 percent of the fund's losses.

But facts are stubborn things. By this time Giannoulias was in the midst of his ultimately successful effort to win the Democratic nomination to the US Senate. Last fall one of his opponents, David Hoffman, filed a Freedom of Information Act requesting correspondence and records about Bright Start.

Three days before Christmas--when many people's minds were dominated by visions of sugar plums dancing in their heads--Giannoulias' office revealed that the Core Bond Fund's losses were double than what was first reported, $150 million--investors lost half of what they put into it. Talk about a lump of coal in their stockings!

Alexi Giannoulias now wants to fill Roland Burris' seat in the US Senate. Don't we already have enough reckless spenders in Washington? Don't we already have too many politicians with hubris?

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