Kirk Launches New TV Ad: “Truth”
Spot focuses on the economic impact of Giannoulias’ record and views as candidate dodges questions about $2.7 million tax write-off
Northbrook, Ill. – As embattled Senate candidate Alexi Giannoulias struggles to explain how we was eligible for a $2.7 million tax write-off last year, the Kirk for Senate campaign today launched a new TV spot to remind voters that Giannoulias’ risky decisions and policies come with a real price for Illinois families.
The new 30-second ad, “Truth,” reviews Giannoulias’ inconsistencies over when he left Broadway Bank – first telling voters he left in 2005 to avoid association with a $22.75 million loan to convicted felon Tony Rezko and then telling the Internal Revenue Service he left in 2006 in order to take a $2.7 million tax write-off. When asked by the Daily Herald, Giannoulias cold not provide any documentation he worked 500 hours in 2006 – the required time to collect the tax benefit.
The ad then lists off the economic impact of Giannoulias’ reckless behavior – a $394 million bill to the Federal Deposit Insurance Corporation due to Broadway Bank’s collapse and a $73 million loss in Illinois Bright Start college savings. “Truth” closes with a reminder to voters of the economic impact of Giannoulias’ policies as well: higher taxes and increased spending.
“Truth” can be viewed online here. A complete script and fact check appear below.
Ad Script and Fact Check: “Truth”
Mark Kirk: I’m Mark Kirk and I approved this message.”
Alexi Giannoulias (From Commercial): “You deserve a senator who will tell the truth.”
AVO: But Alexi doesn’t.
He told newspapers he was gone when Broadway loaned millions to convicted felon Tony Rezko. But Alexi told the IRS he was there to take a $2.7 million tax write-off.
ALEXI SAID HE LEFT BANK IN 2005, BEFORE LOAN TO FELON REZKO, BUT TOOK TAX WRITE-OFF FOR 2006 WITH IRS.
“U.S. Senate Candidate Alexi Giannoulias Tells Voters He Was Gone From His Troubled Family Bank By Late 2005, But That's Not What He Told The Internal Revenue Service.” (John Chase, “Family Bank Good For Giannoulias’ Taxes, Bad For His Campaign,” Chicago Tribune, 9/29/10)
“Giannoulias Was Able To Take A $2.7 Million Tax Deduction Last Year Because He Reported Working Hundreds Of Hours At Broadway Bank In 2006.” (John Chase, “Family Bank Good For Giannoulias’ Taxes, Bad For His Campaign,” Chicago Tribune, 9/29/10)
“Saying He Left In 2005 Gives Giannoulias Maximum Distance From The Bank's Questionable Lending Practices, The April Takeover By Federal Regulators And Other Controversies Such As A Loan By The Bank To Convicted Influence Peddler Antoin ‘Tony’ Rezko In Early 2006.” (John Chase, “Family Bank Good For Giannoulias’ Taxes, Bad For His Campaign,” Chicago Tribune, 9/29/10)
“But By Reporting That He Worked At Least 500 Hours At Broadway In 2006, Giannoulias Was Able To Get A Break That Helped Him Avoid Paying Federal Income Tax For 2009.” (John Chase, “Family Bank Good For Giannoulias’ Taxes, Bad For His Campaign,” Chicago Tribune, 9/29/10)
The truth?
Alexi’s bank failure cost millions.
GIANNOULIAS GAMBLED ON CONSTRUCTION & DEVELOPMENT LOANS
From 2002 To 2006, Giannoulias Increased Construction And Development Loans From $80 Million To $356 Million – Expanding Such Risky Investments From 25 Percent To 46 Percent Of The Bank’s Total Loan Portfolio. “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.” (Mick Dumke, “Alexi’s Albatross,” Chicago Reader, 12/3/09)
· Construction And Development Loans Considered A “Gamble.” “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.” (Mick Dumke, “Alexi’s Albatross,” Chicago Reader, 12/3/09)
HOT MONEY: GIANNOULIAS INCREASED BROADWAY’S BROKERED DEPOSITS LOAD DANGEROUSLY FAR BEYOND NATIONAL AVERAGES
Note: “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.’” (Mick Dumke, “Alexi’s Albatross,” Chicago Reader, 12/3/09)
When Alexi Giannoulias Left Broadway Bank, The Ratio Of Brokered Deposits To Total Assets At Broadway Had Risen From 53% To 68%. “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.” (Mick Dumke, “Alexi’s Albatross,” Chicago Reader, 12/3/09)
· “The Average For All Federally Insured Banks Nationwide Was 4.5 Percent.” (Mick Dumke, “Alexi’s Albatross,” Chicago Reader, 12/3/09)
“During Mr. Giannoulias’s Time At The Bank, Brokered Deposits Catapulted Fourfold, To $640 Million.” (David Greising, “As Lender, Senate Candidate Impacted Bank Woes,” The New York Times, 1/30/10)
“Mr. Giannoulias’s Bank Was Increasing Its Load By As Much As 48 Percent In A Single Year.” (David Greising, “As Lender, Senate Candidate Impacted Bank Woes,” The New York Times, 1/30/10)
· “The typical bank at this point was growing brokered deposits at about 9 percent a year.” (David Greising, “As Lender, Senate Candidate Impacted Bank Woes,” The New York Times, 1/30/10)
“Broadway Bank’s Brokered Deposits Reached 80 Percent Of Total Deposits In 2006.” (David Greising, “As Lender, Senate Candidate Impacted Bank Woes,” The New York Times, 1/30/10)
GIANNOULIAS’ BROADWAY BANK SHUTTERED IN APRIL 2010
“Broadway Bank, Chicago, Illinois, Was Closed Today By The Illinois Department Of Financial And Professional Regulation — Division Of Banking, Which Appointed The Federal Deposit Insurance Corporation (FDIC) As Receiver.” (Federal Deposit Insurance Corporation, “MB Financial Bank, National Association, Chicago, Illinois, Assumes All Of Broadway Bank, Chicago, Illinois,” Press Release, 4/23/10)
COST OF SHUTTERING GIANNOULIAS’ BROADWAY BANK ESTIMATED TO BE $394.3 MILLION
“The FDIC Estimates That The Cost To The Deposit Insurance Fund (DIF) Will Be $394.3 Million.” (Federal Deposit Insurance Corporation, “MB Financial Bank, National Association, Chicago, Illinois, Assumes All Of Broadway Bank, Chicago, Illinois,” Press Release, 4/23/10)
“Despite the fact that Broadway is less than one-third the size of Amcore, the FDIC estimated its failure would cost the fund $394 million, while Amcore's would cost $220 million.” (Steve Daniels, “Broadway Bank fails, MB Financial is the buyer,” Crain’s Chicago Business, 4/23/10)
Bright Start cost millions more.
GIANNOULIAS TOLD ACCOUNT HOLDERS BRIGHT START WAS “WELL-DIVERSIFIED” EVEN THOUGH IT WASN’T
On October 29, 2008, To Bright Start Account Holders, State Treasurer Alexi Giannoulias Wrote: “What I can tell you is that the Bright Start College Savings Program is a strong and well-diversified program that is standing by its management strategies, which have helped generate solid long-term results for investors.” (State Treasurer Alexi Giannoulias, Letter to Bright Start Account Holders, 10/29/08)
· But Giannoulias was contradicted by an Oppenheimer presentation to the Illinois Treasurer’s Office on September 16, 2008, that disclosed the Core Plus fund had 76.6% of its assets in mortgage-backed securities and junk bonds at the end of August, 2008. (“State Of Illinois 529 Plan,” Oppenheimer, 9/16/08)
· Giannoulias was contradicted again by another Oppenheimer presentation on October 20, 2008, that showed 87.4% of its assets were in mortgage-backed securities and junk bonds at the end of September, 2008. These asset concentrations were significantly in excess of Core Plus’ benchmark allocations. (“State Of Illinois 529 Plan: Core Plus Fixed Income Portfolio – September Review,” Oppenheimer, 10/20/08)
GIANNOULIAS TOLD ACCOUNT HOLDERS THAT BRIGHT START WAS GENERATING “SOLID LONG-TERM RESULTS” EVEN THOUGH INVESTMENTS WERE DETERIORATING
Giannoulias Also Told Investors That Bright Start Would Be “Standing By Its Management Strategies, Which Have Helped Generate Solid Long-Term Results For Investors.” (State Treasurer Alexi Giannoulias, Letter to Bright Start Account Holders, 10/29/08)
· However, a September 24, 2008 Core Bond Competitiveness Chart provided by Oppenheimer Funds to the Illinois Treasurer’s Office that shows that as of August 31, 2008, Core Bond was the second-worst performing fund among its peers for the year to date, the worst performing fund over one year, the third-worst performing fund over three years, and tied for the second-worst performing fund over five years. By the time Giannoulias sent his letter on October 29th, Core Plus had deteriorated significantly further from its August 31st position. (“Oppenheimer Core Bond Fund: Competitive Report As of August 31, 2008,” Oppenheimer, 9/24/08)
BRIGHT START: GIANNOULIAS SETTLED, RECOUPED $77 MILLION AND LOST $73 MILLION
“Illinois' Bright Start College Savings Funds Lost Nearly Twice As Much As State Officials Have Previously Announced -- About $150 Million -- The State Treasurer's Office Confirmed Today As It Announced A Settlement With The Fund Manager That Will Recover About 50 Cents On The Dollar For Families Who Lost Money.” (John Chase and Ameet Sachdev, “Losses In Bright Start Are Nearly Twice What Treasurer's Office Announced,” Chicago Tribune, 12/22/2009)
· “The $77 million settlement with OppenheimerFunds Inc., announced today by Treasurer Alexi Giannoulias and state Atty. Gen. Lisa Madigan would partially reimburse about 65,000 account holders.” (John Chase and Ameet Sachdev, “Losses In Bright Start Are Nearly Twice What Treasurer's Office Announced,” Chicago Tribune, 12/22/2009)
Now Alexi promises higher taxes and more spending.
GIANNOULIAS SUPPORTS HIGHER TAXES
Giannoulias Opposes Extending The 2001 And 2003 Tax Cuts:
· Giannoulias: “Those Tax Cuts Were Unnecessary And Irresponsible, And I Would Allow Them To Expire.” (“Giannoulias Tribune Endorsement Questionnaire,” Chicago Tribune)
Giannoulias Supports Generating Revenue Through Tax Increases:
· Giannoulias: “I Have Said From Day One, As Your State Treasurer, That, While Politically It’s Not The Smartest Thing To Say, We Need An Income Tax Increase.” (Alexi Giannoulias, 3/20/10)
· “[Giannoulias] Does Answer The Tax Question Clearly, Arguing An Income Tax Increase Must Be Part Of The Solution With State Government Drowning In Red Ink.” (Christopher Wills, “Some Illinois Officials Avoid Tax Debate,” The Associated Press, 6/9/09)
· Giannoulias: “I Don’t See Any Other Way Than New Revenues.” (Ryan Keith, “Giannoulias Not Always In Lockstep With Obama’s Policies,” The State Journal-Register, 12/14/09)
GIANNOULIAS CALLED FOR MORE SPENDING
Giannoulias: The Stimulus “Should Have Been Even Bigger.” (“State Treasurer: Stimulus Won't Fix Budget,” Bloomberg, 2/23/09)
Alexi’s truth hurts your wallet.
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