The failure of his family’s bank could cost Illinois Senate candidate Alexi Giannoulias support from the Democratic Party and the White House.
Broadway Bank was seized Friday by federal regulators, but the campaign had suspected for weeks that the seizure was coming. The institution had until April 23 to raise some $85 million in capital — a deadline it failed to meet.
Obama will be in Illinois on Wednesday for a “Main Street Tour” event in Quincy where he’ll speak at the Oakley Lindsay Civic Center. Giannoulias has been invited to the event in his official capacity as state treasurer and is planning to attend, according to his campaign. What Obama says about his fellow Democrat during his remarks could signal the level of support the White House is planning to provide Giannoulias’ campaign.
Giannoulias campaign officials have tried to downplay fallout from the bank’s collapse, noting he hasn’t worked there in more thanfour years.
They also note the issue emerged during the Democratic primary, and he still won the nomination.
But observers say it could hamper Giannoulias’s ability to raise money and garner institutional support in the general election. And without Obama stumping for him, it will be a tough campaign against Rep. Mark Kirk (R-Ill.)
“I think his first worry is donors. This is giving potential donors a sense that maybe this race is running away from them,” said Brian Gaines, a professor at the University of Illinois. “He’s lagging behind Kirk in money. Part of the implication of the collapse of the bank is he’s going to have a harder time financing his campaign himself.”
The Giannoulias campaign notes it’s coming off one of its most successful fundraising quarters to date, having pulled in $1.2 million in the first three months of 2010. But that’s some $1 million less than Kirk. Giannoulias also trails in cash on hand, having banked roughly $1.2 million, compared to $3 million for the Republican.
When running for Senate in 2004, Obama spent more than $14 million on his campaign. With redistricting looming, Democratic donors might decide instead to focus on the governor’s race.
“They might end up writing off Giannoulias,” Gaines said. “The energy of the party may end up working entirely on the governor’s side and letting Giannoulias fend for himself.”
The White House has made bland pronouncements of support — even as the president campaigns for Democratic incumbents in Colorado and California.
“The president intends to help Democratic candidates in Illinois up and down the ballot,” said White House spokesman Matthew Lehrich.
It has not commented specifically on the bank’s collapse. Originally, the White House tried to get Illinois Attorney General Lisa Madigan to run for Obama’s old seat, but she declined.
Giannoulias still has the support of Senate Majority Whip Dick Durbin (D-Ill.), who chairs his campaign.
His campaign pushed back hard against the negative coverage of the bank’s collapse.
He held a press conference Friday, made campaign appearances Sunday and released a statewide TV ad Monday.
“I was very proud to be a part of it. And while I left over four years ago, it was in good shape but no one could have foreseen these problems,” Giannoulias says in the minute-long spot. “We’ve seen family businesses go under on every block, on every corner.”
The ad then pivots into an attack against Kirk, noting the congressman voted for the “Bush policies that got us into this mess — including tax breaks for companies that ship jobs to China.”
The Kirk campaign hit back Monday with a release chronicling the amounts lent by Broadway Bank while Giannoulias was a loan officer.
“This is nothing more than a desperate political tactic to divert attention from Alexi Giannoulias’s reckless business decisions that drove his bank into the ground — decisions that will cost the Federal Deposit Insurance Corporation $394.3 million as the fourth most expensive Illinois bank failure in the last 10 years,” said Kirsten Kukowski, a spokeswoman for Kirk.
Kukowski said Giannoulias was “engaged in years of risky lending schemes and hot money investments coupled with nearly $100 million in loans to convicted felons and organized-crime figures.”
She added, “Instead of misleading voters, there are a lot of questions about Broadway Bank and how it got to this point that Giannoulias should start answering.”