Many of the biggest donors to Democratic state treasurer candidate Alexi Giannoulias also received millions of dollars in loans from his family’s Broadway Bank–some making their campaign contributions within weeks or months of receiving the loans, a Tribune analysis shows.
Giannoulias has received nearly $300,000 in campaign contributions from 19 donors who held a combined $200 million in bank loans, according to campaign disclosures and other records. They were among the 42 donors outside of his family who gave at least $5,000 each as of June 30.
No banking or campaign laws prohibit Giannoulias, Broadway’s vice president and senior loan officer, from turning to his bank’s borrowers for donations.
Giannoulias said Monday that he had “absolutely not” pressured any of those borrowers to donate. “There’s no correlation between these loans and the state treasurer’s office,” he said. “They’re not contributing because they want to do business with the state.”
Some of the bank’s borrowers and his donors are “people from a Greek background,” Giannoulias pointed out. “As a candidate, you don’t start raising money from people you don’t know. These are people who support my candidacy and want to help out; many are longtime friends.”
But some political experts and watchdog groups said Giannoulias might fuel public skepticism about so-called “pay-to-play” politics in state government by tapping businessmen who owe money to his family’s bank.
“By raising money in this fashion, you open yourself up for criticism, because people are going to believe the worst until Illinois politicians demonstrate they shouldn’t assume the worst,” said Kent Redfield, professor of political studies at the University of Illinois at Springfield.
`People connect the dots’
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Should Giannoulias be elected, the contributions from borrowers could heighten voters’ concerns about potential conflicts of interest, Redfield said. “They’ll say, `This is part of a pattern,'” Redfield said. “`They hit on all the bank customers when he was running for office and now, aha!’ People connect the dots.”
Giannoulias’ fundraising has far outpaced his Republican challenger in the Nov. 7 election, state Sen. Christine Radogno of Lemont. Between November and July, he raised nearly $3 million to her $363,000.
Most of the Broadway Bank loans to Giannoulias’ contributors long predate his candidacy, and some have been paid off. In some cases, however, his contributors gave at about the same time they secured bank loans.
In one instance, one of Giannoulias’ biggest contributors, The Prime Group Inc., a Chicago-based real estate firm, gave his campaign $25,000 in January, records show. Also that month, the company secured a $9 million loan from Broadway Bank. In May, the firm donated another $25,000 to the campaign.
Prime Group’s chairman, Michael Reschke, said that loan was a small part of the $150 million 10 East Delaware condo tower his company is developing, and it had nothing to do with the campaign contributions.
Reschke said his long-standing business relationship developed into a friendship with the Giannoulias family. He was part of a group of friends and business associates Giannoulias brought together last year “to see would we be there for support, time and money.”
`A great financial mind’
“Even though he’s young, he’s got a great financial mind, but what impressed me about Alexi is his commitment to public service,” Reschke said. “Obviously he could have a long career as a banker, but he was extremely motivated to run for office.”
Another donation from a bankclient came from Michael Winter, the former CEO of Builders Bank. Winter and his companies donated $14,000 to Giannoulias’ campaign in the months before and after one of Winter’s firms secured a $2.2 million loan from Broadway Bank.
Winter’s Oceanna Holdings company used the loan to acquire a 10-unit apartment building in Sarasota, Fla. Winter did not respond to a request for comment. Winter has had a close financial relationship with businessman Antoin “Tony” Rezko, who is one of Gov. Rod Blagojevich’s top fundraisers.
Most of Giannoulias’ $5,000-plus contributions came from bank customers who already held loans from Broadway when they donated, records show.
Nick Giannis, co-owner of Boston Blackies and other popular restaurants in Chicago, has secured mortgages totaling more than $6 million from the bank, records show. But Giannis said he has paid off almost all of those loans and added that he supports Giannoulias because he has known him since he was a school chum of Giannis’ son.
“I’m doing it not because of the bank,” Giannis said. “I’m doing it because the kid is an honorable, hard-working guy–and don’t forget, he’s Greek too.”
Another donor, Luis Flocco, has given Giannoulias $10,000, while Flocco’s ventures have secured more than $4 million in Broadway mortgage loans, records show. Flocco is president of the New Chicago Real Estate, a property sales and development firm.
“I have close ties to the bank, but if I didn’t think [Giannoulias] was the best candidate, I’d contribute maybe only a little,” Flocco said. Alexi is “a truly decent human being. He has the qualifications. After all, state treasurer is a banking gig.”
Jim Kouklakis, owner of a travel and shipping business, said his companies have borrowed millions of dollars from Broadway during the last 15 years. But Kouklakis said he had no expectation of special treatment from the bank when he gave $23,000 to Giannoulias’ campaign.
The donation would be of “absolutely no benefit–no benefit,” Kouklakis said. “I’ll never see my money back.”
Kouklakis added that he dealt with Giannoulias’ late father and two brothers at the bank, adding, “I didn’t even know Alexi was at the bank at all. Alexi was not handling my loans. I was dealing with the father.”
Several of the bank borrowers and campaign donors were Florida and New York real estate developers who do not appear to have projects in Illinois.
One of them was Florida casino executive Spiros Naos, who gave Giannoulias $5,000 in December, about eight months after one of Naos’ companies secured a $4.8 million Broadway loan. Giannoulias returned the money after questions were raised about Naos’ ties to convicted Chicago bookmakers Michael Giorango and Demitri Stavropoulos, who have borrowed millions of dollars from Broadway. Naos did not respond to a request for comment.
The `perception of scandal’
Giannoulias pointed to an ethics package he unveiled last month to highlight his stance against corruption. “My ethics plan is to prevent pay-to-play politics. We’re trying to bring transparency,” Giannoulias said. “I’m trying to do the best I can to rid the perception of scandal from politics in Illinois. That’s what the state of Illinois needs.”
The plan includes a vow that Giannoulias will not accept political contributions from banking institutions to avoid any appearance of a conflict of interest.
But state disclosure records show Giannoulias accepted a $2,500 donation from the Community BancPac in November. Giannoulias said he would keep that money because it came from a political action committee and not an individual bank.
Giannoulias said his campaign intended to repay his Broadway Bank for $36,975 in donated services, from office space to postage.
Radogno has criticized Giannoulias’ ethics plan because it still allows him to raise money from bank directors, executives and employees. “It’s a distinction that he’s pretending that he’s not going to accept money from banks when, in fact, he is,” she has said.
In particular, records show Giannoulias and his family lent or donated more than $1.6 million of the nearly $3 million he received.
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Radogno has said that she would not rule out receiving contributions from any particular institution, including banks.
Giannoulias pointed out that Radogno has accepted money from special interests. Records show that includes $18,500 from banks and bank PACs, $12,450 from other political action committees and $40,224 from political committees.
Records also show Giannoulias has taken at least $54,850 from PACs and another $15,500 from political committees.
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