giannoulias

Goldman Donations Spurned by Kirk in Illinois Campaign for Obama’s Seat

by on April 19, 2010

By John McCormick April 20 (Bloomberg) — Goldman Sachs Group Inc. ’s problems with the Securities and Exchange Commission are spilling over into the U.S. midterm elections. Congressman Mark Kirk , the Republican nominee for an open Senate seat in Illinois, said he will return contributions made by Goldman employees because the SEC is investigating the bank. Kirk, 50, made the announcement after his Democratic opponent, Illinois Treasurer Alexi Giannoulias , criticized him for taking the donations. The two men are vying for the Senate seat once held by President Barack Obama that will help determine whether Democrats retain control of the chamber. “We are calling on Congressman Kirk to explain why he voted against Wall Street reform,” said Matt McGrath, a spokesman for Giannoulias. “And we are challenging him to give back his tainted Goldman Sachs campaign contributions.” Kirk has taken $54,010 from Goldman employees, including $21,600 for his Senate bid, McGrath said. The congressman said that his campaign is still determining how much Goldman employees donated to him, and that he hasn’t accepted money from the bank’s political action committee. “I want to set an example on ethics for others to follow,” Kirk said yesterday during a Chicago news conference. “I will err on the side of caution and watch this case unfold.” A Goldman Sachs spokesman, Lucas Van Praag , declined to comment. Goldman Targeted Kirk said he made his decision over the weekend after reading about a civil suit filed by the SEC that targeted Goldman Sachs , alleging it created and sold collateralized debt obligations linked to subprime mortgages in early 2007 without disclosing that hedge fund Paulson & Co. helped pick the underlying securities and bet against the vehicles. “Obviously, this hits a number of other candidates as well,” he said. Kirk, a five-term congressman from Chicago’s northern suburbs, raised $2.2 million during the first quarter of 2010 and ended the period with more than $3 million in the bank, his campaign said in an earlier statement. Giannoulias, 34, raised $1.2 million during the first quarter and ended the period with that same amount in the bank, his campaign said last week. Kirk criticized Giannoulias for not releasing his 2009 tax return, as he has done. “I knew that I had to finish my taxes on time because I was running for a very high-profile office at a time when transparency is everything,” he said. Giannoulias Taxes Kirk pointed to financial troubles experienced by a community bank run by Giannoulias’s family as one possible reason why his opponent filed for an extension. “I worry that the coming implosion of his family bank may have tax implications for him and therefore he’s not willing to release his taxes,” Kirk said. Giannoulias routinely files for an extension on his taxes as he awaits documents from the family business, said Kathleen Strand, a spokeswoman. “Alexi, as he has for all of the years he has been in public office, will release his tax returns in full as soon as they are filed,” she said, adding they will be released “as soon as possible.” Broadway Bank Broadway Bank in Chicago, whose wealth helped finance Giannoulias’s successful 2006 bid for state treasurer, has been operating since January under a consent agreement with the Federal Deposit Insurance Corp. because of commercial real- estate loan losses. The family must raise at least $75 million by later this month to meet regulatory demands. Kirk has suggested that Giannoulias exercised bad judgment while working from 2002 through 2006 as a senior loan officer and bank vice president. Giannoulias has responded by saying the bank was healthy when he left and that just 9 percent of about $240 million in nonperforming assets on the bank’s books originated while he was there. Lenders are collapsing nationwide amid losses on residential and commercial real estate loans. U.S. banks with problems climbed to the highest level since 1992 in the fourth quarter of 2009, according to FDIC data. Kirk said he is opposed to legislation to overhaul U.S. financial regulations being pushed by Obama and Democrats in Congress. He said that proposal would “continue the ‘too big to fail rule’” with “even more taxpayer dollars” on the line. Blagojevich Trial The Senate seat in Illinois is held by Democrat Roland Burris , who isn’t seeking a full term. Republicans are trying to take advantage of ethical problems experienced by Illinois Democrats, including a public corruption trial set to begin June 3 for former Governor Rod Blagojevich , who appointed Burris to complete Obama’s term. The topic of Kirk’s news conference, held inside a federal courtroom and managed by his congressional staff, was to make the case that Illinois taxpayers and businesses are hurt by what he called a “corruption tax” they face through rigged contracts, kickback scenes and other fraud. He called for added funding for the Federal Bureau of Investigation and federal prosecutors. A poll by Public Policy Polling released April 6 showed Kirk leading Giannoulias by 37 percent to 33 percent, with 30 percent undecided. The survey of Illinois voters was conducted April 1 to April 5 and has a margin of error of 4 percentage points. To contact the reporter on this story: John McCormick in Chicago at jmccormick16@bloomberg.net

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Goldman Donations Spurned by Kirk in Illinois Campaign for Obama’s Seat

Obama Skirting Illinois in Campaign Visits as Democrats Confront Scandals

by on March 17, 2010

By John McCormick March 18 (Bloomberg) — President Barack Obama has campaigned for embattled Democrats this year in Massachusetts, Colorado and Nevada. There’s one trouble spot he’s so far stayed away from: his adopted home state of Illinois. Democrats’ travails since Obama last visited in July include a U.S. Senate contender facing questions about his family’s bank and a lieutenant-governor candidate who withdrew following reports he allegedly once held a knife to the throat of a former girlfriend. The state’s former Democratic governor, Rod Blagojevich , faces a corruption trial June 3. With congressional majorities at stake in the November elections, Obama may be called on to appear with and raise money for candidates in states such as Missouri, Indiana and Ohio, where analysts predict close races. Nowhere will the outcome be viewed as a reflection on his presidency as much as in Illinois, where Obama began his political career. “I’m not sure he should come right now,” said David Yepsen , a former political writer who is director of the Paul Simon Public Policy Institute at Southern Illinois University in Carbondale. Obama has battled suggestions that he is a product of “Chicago-style” politics since his 2008 presidential campaign. Traveling to Illinois, where four of the past eight governors have faced criminal charges, could give Republicans ammunition to reignite that storyline. Incentive to Visit Still, Obama has an incentive to visit Illinois later this year and campaign aggressively for Democrats, Yepsen said. “He is going to get tarred with the outcome in Illinois whether he comes here or not,” he said. “It is going to be portrayed as a referendum on him.” Matt Lehrich, a White House spokesman, declined to comment on the likelihood of an Obama campaign visit this spring or summer in Illinois, where unemployment was 11.3 percent in January, compared with a national average of 9.7 percent. One candidate eager for a visit is Alexi Giannoulias , the Democrat seeking the U.S. Senate seat Obama held until he was elected president. Giannoulias, 34, is running against five-term Republican Representative Mark Kirk , 50. “Hopefully before November, yes,” Giannoulias told reporters in Chicago on March 11, when asked whether he expected the president to campaign with him in Illinois. Broadway Bank Republicans have linked Giannoulias’s campaign to a controversy surrounding his family’s bank. The family must raise at least $75 million by late April to meet demands of regulators threatening to close their Broadway Bank because of commercial real-estate losses. Last week, a Chicago restaurateur who gave more than $100,000 to Giannoulias was charged with defrauding banks by writing about $1.8 million in bad checks. Nick Giannis , 62, is also a former Obama donor. He gave $4,600, the maximum allowed by law, to Obama’s presidential bid in September 2007, campaign finance records show. The owner of the Boston Blackie’s chain in Chicago also donated $2,000 to U.S. Senate candidate Obama in 2003 and 2004. Obama’s campaign plans to donate to charity the contributions to it from Giannis, said Brad Woodhouse , a spokesman for the Democratic National Committee. The National Republican Senatorial Committee seized on the bank issue, asking in a March 9 news release whether Obama would “campaign alongside” Giannoulias. The Republicans also told reporters that the White House had sought to convince Illinois Attorney General Lisa Madigan to run instead of Giannoulias because she has a longer political track record and doesn’t have ties to a troubled bank. Obama recognized Giannoulias, a basketball buddy, as a “potential member of Congress” during a March 9 White House event celebrating Greek independence. Earlier that day, Obama spokesman Robert Gibbs promised Giannoulias White House support. Dropout From Race In the Illinois lieutenant governor’s race, Democrats are searching for a new candidate following Scott Lee Cohen’s decision to drop out less than a week after winning the Feb. 2 primary. Cohen was arrested in 2005 on battery allegations involving a former girlfriend; he denied the charges, which were dropped when the woman failed to attend a court hearing, the Associated Press reported. Obama’s job approval in Illinois is 56 percent, according to a Rasmussen Reports survey taken March 8 that had a 4.5 percentage point margin of error. His national rating in Gallup’s tracking poll has dropped below 50 percent this week. Giannoulias sought to take advantage of Obama’s popularity in Illinois yesterday, criticizing Kirk for telling supporters at a private function in suburban Chicago March 12 that Republicans are “on the way to making this guy a one-termer.” ‘Political Points’ In a statement, Giannoulias said Kirk and Republicans “care more about scoring political points for their party than listening to the people.” The statement about Obama was first reported by Politico. Stu Rothenberg , editor of the non-partisan Rothenberg Political Report , said an Obama appearance in Illinois would increase fundraising and turnout. “If Obama is going to help anywhere, he’s going to help there,” he said. Democrats in Illinois say they would like to see the president back home sooner rather than later. “I don’t think you want to run the risk of waiting too late to come,” said Kwame Raoul , a Democrat who holds the state Senate seat on Chicago’s South Side that Obama once held. “I don’t think it’s a place he can afford not to come.” To contact the reporter on this story: John McCormick in Chicago at jmccormick16@bloomberg.net .

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Obama Skirting Illinois in Campaign Visits as Democrats Confront Scandals