- The Washington Times - Friday, April 23, 2010

CHICAGO | The bank owned by Illinois Treasurer Alexi Giannoulias’ family could fail in just days, forcing him to overcome a notable business stumble as he tries to keep President Obama’s old Senate seat in Democratic hands.

His Republican opponent, U.S. Rep. Mark Steven Kirk, is sure to brand him a failed banker at a time when Americans are still fuming over taxpayer bailouts of Wall Street. What’s more, Mr. Giannoulias’ family could walk away with millions in tax refunds after writing off Broadway Bank’s losses - giving Mr. Kirk the chance to paint him as a fat cat.

But with the election nearly seven months away, the campaign has time on its side to try to repair any damage and change the focus of the race - and help Democrats avoid the embarrassing loss of another high-profile Senate seat. It won’t be simple, and experts say it might not even be possible.

“When I decided to run, I knew it was going to be tough,” Mr. Giannoulias said this month in a speech to a Chicago civic club. “Examining my record is one thing, but putting your family in the line of fire is quite another. Believe me, it’s not easy. But I didn’t get into this race because I thought it was going to be easy.”

Mr. Giannoulias, 34, has been attempting to take some of the political and public-relations sting out of a collapse. While acknowledging the bank is likely to fail, he has put the blame on the bad economy, not bad management. And he has tried to turn the tables on his opponent, accusing him of running a one-note campaign.

“Just about every sentence that Congressman Kirk utters these days is a noun, a verb and Broadway Bank,” Mr. Giannoulias said earlier this month.

Mr. Kirk is drawing strong financial support, raising $2.2 million in the first quarter of the year compared with $1.2 million for Mr. Giannoulias, which was the Democrat’s best money quarter. And Mr. Kirk shows no intention of changing strategy. He will keep the focus on Mr. Giannoulias’ “reckless decision-making” at Broadway, said his spokeswoman, Kirsten Kukowski.

The Giannoulias campaign and Democratic insiders have maintained he can still beat Mr. Kirk, a moderate Republican and an officer in the Naval Reserve. Democrats outnumber Republicans in Illinois, and Mr. Obama remains a popular figure in the state. Mr. Giannoulias has said he expects Mr. Obama to campaign for him.

Mr. Giannoulias’ campaign won’t talk specifically about the strategy for dealing with a bank failure. Spokeswoman Kathleen Strand said he will focus on the economy and creating jobs, arguing that the bank’s problems are not major issue for some people.

“We are going to keep talking to voters about what matters to them most,” she said.

Changing the subject won’t be easy.

“You can’t overcome that … especially Giannoulias, who four years ago ran for treasurer touting his experience and expertise. I mean, you can’t have it both ways,” said David Yepsen, director of the Paul Simon Public Policy Institute at Southern Illinois University in Carbondale. “This is going to be an indelible stain on him.”

Mr. Giannoulias has tried to distance himself by stressing that the bank was financially healthy when he left four years ago. But some decisions made while he was there are also playing into the campaign - for instance, revelations that it had loaned $20 million to two felons.

Mr. Giannoulias has strong backing from Democrats, though some support is sometimes less enthusiastic because of the bank. “I’m glad I don’t have any deposits there,” Michael Madigan, chairman of the Illinois Democratic Party and House speaker, was quoted as saying by the Chicago Tribune.

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