Dem's bank failed

FDIC shuts down struggling financial institution
Editorial, Chicago Tribune, April 23, 2010

Time has run out for Broadway Bank, the troubled family business that threatens to take Alexi Giannoulias' U.S. Senate campaign down with it.

Federal regulators showed up at closing time on Friday and took over the 30-year-old institution founded by Giannoulias' late father, Alexis. The family wasn't able to meet the Federal Deposit Insurance Corp.'s deadline for raising up to $85 million in capital, and the FDIC rejected bank CEO Demetris Giannoulias' plea for more time to turn things around. It's over.

But the political fallout won't fade until the election is past, despite Alexi Giannoulias' determined attempts to change the subject. Like it or not, he'll spend the next six months explaining over and over why the 34-year-old scion of a failed family business belongs in the U.S. Senate.

For better or worse, Giannoulias' political ambitions have been intertwined with Broadway's fortunes. It's a situation he invited when he ran for treasurer in 2006. The bank was thriving, and Giannoulias capitalized on that success. At 29, he could boast of being senior loan officer at the most profitable bank in Illinois.

Those campaign ads have come back to haunt him in his Senate bid. Broadway's heavy reliance on construction and development loans — an aggressive, high-growth strategy — sent the bank into a nose dive when the real estate market collapsed. Giannoulias sought to distance himself from those risky practices by pointing out that he left the bank in 2006, before things got ugly, and by backpedaling about how much influence he'd wielded in the first place.

He clung to that position to deflect questions about the bank's dealings with questionable characters, including two organized crime figures who borrowed $20 million from Broadway from 2004 to 2006.

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Broadway's failure raises fair questions about Giannoulias' experience and judgment. Those questions won't go away, no matter how many times he answers (or ducks) them.