The Chicago Tribune ran a front-page story today on the continued financial troubles of Broadway Bank, and the picture is not good.
At once-successful Broadway, headquartered in a former car dealership in the Edgewater neighborhood of Chicago, the situation has turned awful at an inopportune time for the Illinois treasurer. Less than a week before Giannoulias' Democratic primary election victory earlier this month, the scope of the problems at Broadway became clearer after a regulatory order was made public saying the bank has just three months to get its financial house in order.
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Broadway's chief executive, Demetris Giannoulias, Alexi Giannoulias' older brother, told the Tribune the family must raise at least $85 million by the end of April to stave off government seizure.
Demetris Giannoulias said he doesn't expect the government to drag its feet on shutting the bank if capital-raising efforts come up short.
"Regulators aren't cutting us any slack," said Demetris Giannoulias, 38, whose father founded the bank in 1979.
Hey, it's terrible that they're suddenly short $85 million. Wonder where it could have gone?
One question the e-mails from the Republicans and the Tribune editorial say Giannoulias should answer is whether he plans to give back any of the dividends paid out after his father’s death. That was $70 million to $86 million the Giannoulias family took out of the bank as it was struggling. Giannoulias said that money went to cover taxes on his father’s estate and the administration costs of handling that estate. Only $2.5 million of that went to Alexi Giannoulias and about $1.5 million of that went to taxes Giannoulias campaign has said.
Again, the explanation that "the money went to pay for taxes" doesn't really hold any water. It's intended to convey the idea that it's not like the Giannoulias family took out $86 million and used it to buy yachts. However, the fact is that the taxes in question were essentially personal taxes. They were owing and had to be paid. The fact that the family took the money out of the bank's funds to pay them essentially meant that they had $86 million of their OWN money now disposable to, you know, buy yachts with or something. And now, as a result of that decision (and, of course, the loans to the mob that won't be repaid), the Broadway Bank faces imminent foreclosure.
Ladies and gentlemen, this is the man who wants to have a say in deciding how much of your money the federal government gets and what is done with it. There are lots of good reasons to dislike his opponent, Mark Kirk, but so far as we know, he's never yet bankrupted any financial institutions through funding the mob.