Giannoulias family bank, Broadway Bank, once one of the most profitable banks in Illinois, is now on the verge takeover by the FDIC. On January 26, 2010, Broadway Bank entered into a consent decree with the FDIC that orders Broadway to raise at least $50 million in capital and imposes strict controls on how the bank operates.
Broadway banks poor financial situation is due to hundreds of millions of dollars in loans that went bad. In addition to the bad loans, the Giannoulias family withdrew $70 million from the bank in 2007 and 2008, more than twice the banks profits in those years.
Giannoulias served as the chief loan officer of Broadway Bank from 2002 to 2006. During that time, Broadways lending in risky construction and development loans increased sixfold, to $356 million. During Giannoulias tenure, Broadway also sharply increased its brokered deposits or hot money, which generally command much higher interest rates, and thus are more expensive for the bank. When Giannoulias left the bank in 2006, brokered deposits made up 80% of all deposits at Broadway.
Giannoulias made millions of dollars in loans to Tony Rezko, a political fundraiser for former Illinois Governor Rod Blagojevich who has been convicted of fraud and money laundering. He also loaned money to Michael Jaws Giorango, a suspected mob figure who has convicted for prostitution and bookmaking.
Yet according to one recent poll he is ahead of Kirk. If they can’t beat this guy then it makes you wonder can this nation really survive.