…ordered to pour millions of dollars back into Broadway bank…in 90-days. It is somber news for the bank…and a serious blow to the Democratic front-runner in Illinois’ U-S Senate race.
With the primaries just five days away…Alexi Giannoulais now must deal with a crisis at Broadway bank…the family business was founded by his father…and where Giannoulias worked before getting elected State Treasurer.
On Tuesday…Broadway Bank entered into a consent decree with the FDIC…to essentially right the bank’s finances. In recent years…the bank went from a successful community bank making over $49-million in 2007…to a $13-million dollar loss in 2008…to losing $27+ million dollars in just the first nine months of 2009.
During that same time period…the bank paid out dividends totaling $86-million. The Giannoulias campaign has insisted the dividends were ordered as a part of father Alexis Giannoulias’ will. (He died in 2006.)
Now, Broadway Bank has agreed to re-capitalize…or put money back into the bank. Until federal regulators are satisfied the bank is financially stable….Broadway Bank is ordered not pay any more dividends.
Broadway Bank was reportedly heavily invested in real estate development deals. When the US housing market fell…the bank’s fortunes seemed to have plunge with it.
Giannoulias’ opponents in the Democratic primary have pounced the bank’s flagging finances. Cheryle Jackson on her campaign website says, “I am calling on the Treasurer to do the honorable thing and withdraw from this race.”
Michael Powell…campaign manager for David Hoffman…in a statement says: “(The Giannoulias) family’s decision to take $86 million in dividends for themselves, has caused the bank’s collapse, and a likely bailout and takeover by the FDIC.”
Polling in the Democratic primary for the Senate seat (once held by President Obama) has consistently shown Giannoulias leading.