Posted by John Chase at 6:08 p.m.
Democratic U.S. Senate candidate Alexi Giannoulias tried to dampen criticism today of what role he may have played in causing problems at the family bank where he worked before being elected state treasurer.
But on more than one occasion, Giannoulias didn’t answer direct questions about which loans he approved while chief loan officer at Broadway Bank that have since gone bad.
“We’ll have plenty of time to get into that,” Giannoulias said at a hastily-called news conference.
With five days left before the primary election, Giannoulias’ opponents have made his experience and decision-making at Broadway Bank a major issue. The struggling bank, which was founded by Giannoulias’ father and is still run by one of his brothers, reached a consent order this week with federal regulators that requires it to receive more oversight.
The bank is suffering in part from bad loans that haven’t been paid back and from being undercapitalized. Giannoulias was chief loan officer at Broadway from 2002 through 2006, when he left to run for treasurer.
After today’s news conference, a spokeswoman said that Giannoulias doesn’t know which loans may have contributed to the bank’s problems because he hasn’t been involved in the bank’s day-to-day operations since he left.
Giannoulias quickly organized the news conference to answer criticisms raised by U.S. Senate rival David Hoffman, who earlier highlighted the consent order Broadway reached with Federal Deposit Insurance Corp.
Hoffman said the consent order raises questions about Giannoulias’ experience and what he described as Giannoulias’ inability to accept responsibility for his actions.
“(Broadway Bank’s) decisions, including the decisions at the time he was there as the chief loan officer, are the reason that the bank is in such trouble,” Hoffman said.
In addition, Hoffman said the bank is in trouble because of $86 million in payouts that were made to Giannoulias and other family members who own the bank. About $70 million went directly to the family members — $2.5 million to Giannoulias himself. The other $16 million went to pay off a loan, a Giannoulias campaign spokeswoman said today.
Giannoulias has said the payouts were triggered by the 2006 death of his father, Alexis, who founded the bank and whose will called for estate and income taxes to be paid with dividend payments from the sale of Broadway shares. His family still owns the bank, which is run by one of his brothers.
Giannoulias, who has addressed some of the problems at Broadway in the past, said today that more than 700 banks have made similar agreements with the FDIC and reiterated the bank was heavily involved in real estate loans.
“Over the last four years a lot of the real estate market has just had some enormous challenges and while I haven’t been there for four years it’s a family institution and I hope that they can fight through and make it through,” he said.
Democratic Senate candidate Cheryle Jackson, who is holding a fundraising concert tonight with Lupe Fiasco, has called on Giannoulias to exit the contest.