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Probably? Full Extent? Give Us a Break!

“Giannoulias acknowledged he ‘probably’ met with Giorango on a trip to Miami to inspect property involved in a loan application.”– Associated Press, 10/18/10

“I didn't know the extent of their activity." – Alexi Giannoulias, 10/10/10

During an interview yesterday with the Associated Press, Illinois Senate candidate Alexi Giannoulias said he probably met with convicted mobster Michael “Jaws” Giorango when he visited a Giorango property in Miami a few years ago. Probably?!? Wouldn’t you remember whether you met with a mobster with known convictions for prostitution promotion, bookmaking and tax violations? The latest Giannoulias comment comes less than 10 days since the candidate said he “didn’t know the extent” of the criminal activity of the mobsters who received loans from Broadway Bank. The comment also raises new inconsistencies in Giannoulias’ ever-changing story about his involvement in loans to felons. In April 2006, Giannoulias definitively said that he met with Giorango in Miami: “Giannoulias said he traveled to Miami ‘about a year or two ago’ to inspect property the bank had financed for Giorango and met with him there. Giannoulias declined to provide details of that meeting.” Key Questions for Alexi Giannoulias

Why is Alexi Giannoulias suddenly changing his story on whether he met Michael “Jaws” Giorango in Miami?

When did he go to Miami and when did he return?

Where did he stay during his visit?

What did Alexi and “Jaws” talk about?

Giannoulias admitted meeting convicted mobster, bookmaker and prostitution ring promoter in Miami but never gave further details

On the heels of a blistering editorial by the Chicago Tribune this morning slamming Alexi Giannoulias’ “damning non-denial about loans to criminals,” the Kirk for Senate campaign released a new web video highlighting Giannoulias’ now-infamous comment on Meet the Press that he “didn’t know the extent” of the criminal activity of the mobsters who received loans from Broadway Bank. In addition, Congressman Mark Kirk urged Giannoulias to finally come clean about his visit to Miami in 2005 to meet with mobster Michael “Jaws” Giorango. “If Alexi wasn’t involved in these mobster loans, why did he travel to Miami to see Michael ‘Jaws’ Giorango?” Kirk said. “When did this visit take place, where did Alexi stay and what did Alexi and ‘Jaws’ talk? After four years of silence, the voters of Illinois deserve to know what happened in Miami once and for all.” In 2006, Giannoulias told the Chicago Tribune that he had traveled to Miami to inspect property the bank had financed for Giorango and met with him there. That property, the Lorraine Hotel, was at the center of Giorango’s conviction for promoting a prostitution ring by encouraging prostitutes to work from the hotel and using the women to entertain and entice his business associates. According to the Tribune, Giannoulias declined to provide details of that meeting in Miami. In today’s editorial, the Chicago Tribune wrote: “Giannoulias tries to minimize the significance of all this, but there is no way to deny the central fact: While he was a loan officer at the family bank, the bank chose to lend money to known felons connected to organized crime. Maybe he didn't know the ‘extent of their activity.’ But a conscientious banker wouldn't have needed to.”
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New Question #5

Giannoulias Response to Chicago Tribune Story on Organized Crime Loans Contradicts Candidate’s Previous Statements

1) Why did your campaign just say you had “no role with these two individuals” when you have previously admitted that you did?

2) Why did Broadway Bank continue to loan money to Michael “Jaws” Giorango and Demitri Stavrapolous after the Chicago Tribune identified them as organized crime leaders in 2004?

3) Why did you meet with Michael “Jaws” Giorango in Miami after the Chicago Tribune identified him as an organized crime leader?

4) If you are now downplaying your role at Broadway Bank, does that mean the cornerstone of your 2006 campaign for State Treasurer was baseless?

New Question #4

Between 2003 and 2007, Broadway Bank loaned more than $20 million to Salman Ibrahim, a man accused of stealing $50 million from Chicago-area families. Of the loans, roughly $8 million were approved between 2003 and 2005 when Alexi Giannoulias served as Vice President and Chief Loan Officer.

1) How did you come to know Salman Ibrahim?

2) What were the reported purposes of all Broadway Bank loans to Salman Ibrahim?

3) Did you or Broadway Bank have any contact with Salman Ibrahim in 2008 before his disappearance?

4) Have you or Broadway Bank been in contact with Salman Ibrahim since his disappearance?

New Question #3

When will Alexi Giannoulias answer questions about his association with Nick Giannis?

The Giannis Watch:

1) Who authorized Broadway Bank’s $1.2 million loan to Nick Giannis in December 2002?

2) Who authorized Broadway Bank’s $4.25 million loan to Boston Blackie’s in February 2005?

3) If it was not you, what role did you play in the loan process as Chief Loan Officer of the bank?

4) In the past, you have defended loans to criminals by saying, “If I knew then what I know now, I probably wouldn’t have made those loans.” How did Nick Giannis get a loan if you knew he had a gun conviction?

New Question #2

According to the FDIC’s Consolidated Reports of Condition and Income for A Bank with Domestic Offices Only (CALL Reports) filed by Broadway Bank, the Bank reported losses of $13 million in 2008.

1) Beyond the tax refund that Giannoulias family members would get from their $75 million loss in 2009, what about a second tax refund they could claim using the $13 million loss of 2008?

“A $75-million loss at the struggling lender last year generated tax benefits potentially worth between $12 million and $15 million to Mr. Giannoulias, his two brothers and his mother. As the sole owners of a subchapter S corporation that controls $1.2-billion-asset Broadway, they pay the taxes on the bank’s income and reap tax deductions on its losses.” (Crain’s Chicago Business, “Alexi Giannoulias, kin could walk away from Broadway Bank collapse with $15 million,” 3/5/10)

2) What did the Giannoulias family do with its $13 million Bank loss in 2008?

3) If they took a tax refund, did they use it to help rescue Broadway Bank?

“They are actively pursuing a refund of this money as a way to help save the bank.” (Giannoulias Press Release, 3/6/10)

4) If they didn’t take a tax refund on 2008, why would they take one on 2009?

New Question #1

Giannoulias Dodges Questions in Editorial Board Appearances

New Questions Surround Giannoulias’ Risky Lending Practices, Dividend Payments and Loans to Convicted Mobster Michael "Jaws" Giorango

1) How did the Giannoulias family come to know a convicted mobster named Michael "Jaws" Giorango and why does Alexi Giannoulias keep changing his story?

In answering questions about Broadway’s loans to Giorango, Giannoulias said Giorango had a relationship at the bank before he worked there full-time after his graduation from law school. But in offering his latest explanation of his contact with Giorango, Giannoulias today at first contended he was unaware of Giorango’s criminal history. That contradicted Giannoulias’ comments in 2006 to the Tribune, in which he acknowledged knowing Giorango had a criminal background. When reminded today of his past comments, the treasurer said he would have to check his past statements before saying any more because he doesn’t want to give inconsistent answers. (John Chase, "Giannoulias seeks to blunt damage, says family bank likely to fail," Chicago Tribune, 3/3/10)

Mr. Giannoulias also was somewhat vague when asked about Broadway loans to convicted bookmaker Michael "Jaws" Giorango. 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. (Greg Hinz, "Giannoulias defends family’s bank, but leaves unanswered questions," Crain’s Chicago Business, 3/3/10)

2) Why did the Giannoulias take $70 million in dividends out of the bank in 2007 and 2008 when the family’s tax bill was only $40 million?

Kirk and national Republicans have questioned why Giannoulias and his family accepted the nearly $70 million in dividend payouts in 2007 and 2008 – at the same time the economy was beginning to struggle. Giannoulias in November had said the payout was the result of helping settle his father’s estate. His father, Alexis Giannoulias, died in June 2006. In his appearance today, Giannoulias added new details, saying that $40 million went to pay off income taxes for bank shareholders – which include him and his family members – and that $29 million was paid out so he and his family could better diversify their economic portfolios. (John Chase, "Giannoulias seeks to blunt damage, says family bank likely to fail," Chicago Tribune, 3/3/10)

3) Why did Alexi Giannoulias vastly expand the amount of brokered deposits and real estate loans at Broadway Bank and why didn’t he do more to cushion that risk?

Mr. G also is acknowledging that the amount of brokered deposits and real estate loans on Broadway’s books soared when he was chief loan officer earlier this decade. Both tend to be expensive and risky. Shouldn’t the bank have done more to cushion that risk? (Greg Hinz, "Is Giannoulias turning corner on his family bank woes," Crain’s Chicago Business, 3/3/10)

But he did not dispute that the small Chicago community bank effectively changed its business model during his tenure, sharply ramping up its exposure to oft-risky real estate loans to nearly half of its portfolio, and relying for deposits not on local savings accounts but brokered, relatively high-interest deposits from all over the county. (Greg Hinz, "Giannoulias defends family’s bank, but leaves unanswered questions," Crain’s Chicago Business, 3/3/10)