RINOs Are F'n' Awesome: Rasmussen Puts Kirk Up by Six Over Mob's Juicebox Guy; Has +37 Lead With Indpendents

Hey, he was the most conservative likely candidate the citizens of Illinois would elect.

The system worked.

Republican Mark Kirk holds a modest 46% to 40% lead over Democrat Alexi Giannoulias in the race for the Illinois Senate following Tuesday’s party primaries.

The first post-primary Rasmussen Reports Election 2010 telephone survey of the Kirk-Giannoulias race finds just four percent (4%) of likely voters in the state prefer some other candidate, while another 10% are undecided.

Among voters not affiliated with either of the major parties, the Republican holds a sizable 59% to 22% lead.

In December, Giannoulias was up by three points over Kirk. In October, the two men were tied at 41% each. In mid-August, Kirk held a modest 41% to 38% lead over Giannoulias.

It is possible that a bigger push for a conservative candidate by the rightroots/Tea Partiers could have gotten someone more conservative the nod.

The trouble was no one really knew that a victory in Illinois, in The Obama Seat, was even possible. All of this has snuck up on us. Well, I think I can say "us." I don't think too many people were expecting the Brown win, or... this.

Mark Kirk actually ran. Can't get too angry at him for being the only major Republican candidate to show up for the party.

I Expect Keith Olberman's Special Comment to be Ferocious: The Democratic candidate for lieutenant governor once kinda-sorta held a knife to his girlfriend's neck.

Scott Lee Cohen -- a pawnbroker who shocked state Democratic leaders Tuesday night by winning the party's nomination for lieutenant governor -- was arrested about four-and-a-half years ago and accused of holding a knife to a former live-in girlfriend's neck, newly obtained court records show.

The misdemeanor charge against Cohen was dropped weeks later when the woman -- who had just been found guilty of prostitution -- failed to show up to testify, according to those records.

This isn't the only piece of information Republicans might try to use against the Democratic gubernatorial ticket, the other half of which was being sorted out as Gov. Quinn and Dan Hynes ran neck-and-neck with ballots still to be counted.

Cohen's Oct. 14, 2005, arrest came five months after his wife filed for divorce and convinced a judge to give her a temporary order of protection, records show. A status hearing in the divorce case took place Wednesday, hours after Cohen's election-night triumph.

Cohen -- who records show also had federal tax troubles that he says he has settled -- denied in a written statement that he ever hurt the ex-girlfriend or his family. Cohen disclosed his domestic violence arrest when he announced his candidacy, but the details about the knife and prostitution case didn't surface in the campaign, as Cohen was considered a longshot.

It's a one-time gift by Democrats that they've nominated these guys with absolutely no regard to how they would fare in the general. They assumed that, as usual, the general would be a cakewalk, and so they could nominate whatever corrupt/crazy/socialist idiot they liked in the primary.

Conservatives have been having a heated argument about just this -- how far can we go? It seems the Democratic Party hasn't had this argument at all in blue states.

They're going to pay for that.

Alas, they will not be this stupid for too much longer.

Backgrounder on Alexi "Juicebox" Giannoulias: A few weeks old, but still true.

After graduating in 1998, Alexi played pro ball for a year in Greece, then enrolled in law school at Tulane. His JD in hand, he returned to Chicago and took a job as a loan officer at Broadway Bank. Within two years he'd been named senior loan officer and a bank vice president.

It's not clear what responsibilities came with these titles. He's said that as VP he oversaw all of Broadway's lending—but he's also said he was really just the guy who serviced the bank's loans—overseeing things like billing and payment collection— while more senior officers, including his older brother Demetris, negotiated the deals and made the final decisions. When I pressed him to specify his job descriptions at each stage of his employment at the bank, he laughed.

"You have to understand that it was the family business—I did everything there," he said. "Sometimes I was a teller and sometimes I serviced loans—whatever we needed."

...

Broadway was one of hundreds of banks around the country that profited greatly from that boom and kept it going with aggressive lending policies. From 2002 through 2006 its assets more than doubled, from $434 million to $946 million, and Crain's Chicago Business ranked it the most profitable bank in Illinois (by figuring its income as a percentage of its assets) for four years running.

Notice after the fact Bush is credited with a "boom." It was never described as such at the time, when it might politically benefit him.

"People think there's some kind of magic to it," Alexi told Crain's in 2004. In fact, he said, it was simply the result of hard work and his father's deep roots in the community. "He knows what deals are solid or not solid, what areas are hot or not hot."

But there was at least one additional factor: risk tolerance. Broadway's growth and profits were fueled largely by its rapidly expanding business in issuing loans for new real estate development. Traditionally lending for construction and development (known in the industry as C & D) has been seen as a bigger gamble than lending for, say, existing homes or small businesses, since a relatively high number of plans for new hotels, condos, housing developments, office complexes, and the like end up flopping. In the early to mid-2000s, though, as the soaring real estate markets drove the national economy, many lenders downplayed the risk and dived in.

At the end of 2002, Alexi's first year as a full-time employee, the bank had nearly $80 million in outstanding C & D loans—about 25 percent of its total loan portfolio, according to records filed with the FDIC. By the end of 2006, not long after he'd left the bank, it had $356 million in C & D loans accounting for nearly 46 percent of its loan total. During those years, it was consistently among the 20 banks, out of hundreds its size, with the biggest share of their portfolios tied up in such loans.

Moreover, rather than relying primarily on depositors from the community for its lending money, the bank relied heavily on brokered deposits, or "hot money"—pots of money collected by brokers from investors around the country. Over the last decade scores of banks have used brokered deposits to quickly bolster their cash supplies—but at a cost. These deposits command higher interest rates; furthermore, the depositors are less likely to stick with the bank if they see they can do better somewhere else. "When properly managed, BDs offer institutions a number of important benefits such as ready access to funding," the FDIC notes on its Web site. "However, BDs can be a higher-cost and more volatile funding source and, as such, present potential liquidity, earnings, and other risks that must be properly managed."

In 2002, the ratio of brokered deposits to total assets at Broadway was 53 percent, according to FDIC records; four years later, it had risen to 68 percent. The average for all federally insured banks nationwide was 4.5 percent. According to an explanation of hot money on AOL's Daily Finance in July, "the 79 U.S. bank failures in the last two years had four times the brokered deposits of the average bank, and 33 percent of the failed banks had high brokered deposits and extremely fast growth."

In the early and middle part of the decade, when the economy was thriving...

First I've heard the economy was thriving under Bush.

...this just meant that Broadway had money to lend. Giannoulias says that it was able to aid countless small businesses and enable important development projects to get off the ground. "We've taken enormous pride in helping people," he says, naming a neighborhood health store and a nail salon. "We have people who've had checking accounts for 25 or 30 years."

But experts and community leaders say Broadway developed a reputation for giving out loans to just about anyone who walked in the door. Among the recipients of loans while Alexi worked full-time at the bank were: Michael Giorango, a Florida developer who's been convicted of running bookmaking and prostitution rings; Boris and Lev Stratievsky, a father-son team later convicted of laundering money for Ukrainian drug dealers; and Tony Rezko, the developer-businessman-political fixer who was eventually convicted of fraud and money laundering for his role in pay-to-play schemes during the administration of Governor Blagojevich. Giannoulias and current bank officials have said all of them were creditworthy when the loans were issued.

Another loan, for $1 million, was issued in 2002 to a woman whose family claims she was suffering from dementia—and that both Alexi, as the loan officer, and his brother Demetris, then the bank's CFO, knew it but gave her the loan anyway.

During his 2006 run for state treasurer -- once a fundraiser and campaigner for Obama; now Obama's protoge -- Giannoulias' mob connections surfaced.

Just days before the election, news outlets ran stories about Broadway Bank loans in the 1990s and early 2000s to Giorango, the Florida developer with ties to bookmaking and prostitution—stories prompted by a pre-primary mailer from the Madigan-led state Democratic Party declaring that Giannoulias was "friends" with mobsters. Giannoulias said privacy laws prohibited him from getting into details, but he noted that there was nothing illegal about the loans. "We lend money to people who we trust from a business standpoint," he said at a news conference. "We're a safe and sound financial institution and we run a good business." He added that these loans were irrelevant to his campaign—he'd been in law school when they were issued.

That was true—but Giannoulias himself had overseen a couple of loans to Giorango in 2005, and the Tribune soon dug up records of those. The paper reported that one of those loans had been used to take out a mortgage on a marina in South Carolina that was home to a casino boat. One of the companies with a stake in the boat had been led by a Greek immigrant named Konstantinos Boulis, who'd been murdered in an apparent hit in 2001. The company was then sold to investors that included Jack Abramoff, the Washington lobbyist convicted on federal corruption charges in June 2006, before being sold back to Boulis's nephew, Spiros Naos—who had donated $5,000 to Giannoulias's campaign in December 2005. But the campaign had returned the check in February, when the Daily Herald had written about Naos's connection to Abramoff.

Forced to concede that he'd met Giorango and checked out some of his properties in Florida, Giannoulias continued to downplay his involvement in the loans, saying he'd merely done the paperwork and credit evaluation. "I don't cultivate the relationships," he said. "I don't bring these deals in." He said Giorango had led him to believe the money for the casino mortgage was going toward a condo development, and he emphasized that because banks don't generally run background checks of their borrowers, he had no way of knowing that Giorango had a criminal record.

His general election opponent, Republican Christine Radogno, seized on the controversy, accusing Giannoulias of "an association with organized crime" and questioning what he'd actually done at Broadway. "When it was convenient he was the vice president in charge of loans, but when they became an issue he wasn't involved," she says.

And when all the risky loans the family had made started going bust, the Giannoulias family did what any prudent bank would do -- they depleted the bank's operating capital by paying themselves big dividends.

At the end of 2006, the last year Giannoulias worked there, Broadway Bank reported net income of more than $45 million, and its return on assets was ranked fifth nationally among 240 banks of its size. But it ranked tenth in the share of its loans tied up in construction and development projects (44 percent) and second in the share of its loans that went toward real estate (97 percent), according to Russ Yates of SNL Financial, a firm that specializes in bank and real estate data analysis.

Then the real estate market began to sink, and fast, leaving many of Broadway's borrowers struggling to keep up with their loan payments. FDIC records show that from the end of 2006 to the end of 2007 the value of the bank's bad real estate loans—those at least 90 days past due—more than doubled, from $3.4 million to $7.4 million. And that was just the beginning of the trouble. By December 2008 the figure had soared to $39.3 million. Giannoulias had left the bank for the treasurer's office by this time, but since there's typically some lag time between when a loan is taken out and when it goes bad, it's probable that some of Broadway's problem loans were issued on his watch.

Meanwhile, Broadway continued its risky real estate lending practices. The bank went from $356 million in construction and development loans in 2006 to $443 million in September 2009; Yates says it now has a larger portion of its loan portfolio tied up in C & D projects than all but two of those 240 similarly sized banks. And the number of these loans going south has also increased. Less than 2 percent of the bank's loans were at least 90 days past due in 2006; now nearly a quarter of them are, which is the second-worst rate in the nation for a bank of its size. Broadway's gone from being among the country's most profitable institutions to operating in the red. Last year it reported a $14 million loss, and it lost another $27 million in the first nine months of this year.

Analysts say that when banks engage in high-risk lending they're supposed to sock away extra money to protect them against the likely losses. From 2002 through 2006, Broadway paid out between $11.3 and $15.4 million a year in cash dividends, according to FDIC reports. In 2007 and 2008, as its earnings went south, it paid out $47.8 million and $34.5 million. The Giannoulias family owns all the stock in the bank's holding company.

By this fall Broadway was at its lowest level of equity—the capital invested in the institution—in six years. "Once their loans started going bad, what did they do?" says Iannaccone. "They pulled money out, and that is the problem."

A lot of Democrats have worried that if Giannoulias won the primary, they'd lose the senate seat in the general. Too inexperienced and too tied to the shady family business, with not enough distance between himself, his bad loans, his huge cashouts as the bank was struggling, and his mob clients.

And by the way: No one will confirm this -- not Obama and not Giannoulias -- but it is strongly suspected by conservative diggers that it was Broadway Bank which underwrote the shady loans for the sham Rezko "property sale."

posted by Ace at 12:21 PM

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