During an interview this morning with WLS-AM’s Don Wade, mob banker Alexi Giannoulias (D-IL) was caught lying about whether his family’s failed Broadway Bank made loans to parties who controlled “a nationwide prostitution ring.” 

As the Capitol Fax Blog reports, “Don Wade asked Giannoulias a direct question: ‘Did you lend any money to anybody who was controlling a nationwide prostitution ring?’ Giannoulias answered ‘No.’”

But the Chicago Tribune reported in 2006:

Alexi Giannoulias said Wednesday he was “was ‘embarrassed’ by earlier remarks he made regarding millions of dollars in loans his family’s bank gave to a convicted felon, and he tried anew to explain a relationship that has cast a shadow over his campaign.

Giannoulias, the senior loan officer and vice president of his family’s Broadway Bank, previously described convicted bookmaker and prostitution ring promoter Michael Giorango as “a very nice person” and dismissed his relationship with Giorango as someone he had met at the bank “a few” times.

But on Wednesday, Giannoulias said he traveled to Miami “about a year or two ago” to inspect property the bank had financed for Giorango and met with him there. Giannoulias declined to provide details of that meeting.

In the same radio interview, Giannoulias was also caught lying about his plan to raise taxes, saying “No, I don’t want to raise taxes,” upon which the show’s host played audio of Giannoulias saying very clearly “I’ve 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.”

“Despite his attempts to run from his record, voters know that Alexi Giannoulias is a failed mob banker who loaned millions of dollars to convicted mob pimps and other criminals, and that he has promised to raise Illinoisans’ taxes,” said National Republican Senatorial Committee (NRSC) Press Secretary Amber Marchand. “Voters in Illinois deserve a U.S. Senator who will restore respect and accountability on their behalf – not a dishonest failed banker who loaned money to known criminals and pimps.”

Background Information:

Giannoulias’ Family Bank Made Loans To Convicted Mobster Michael Giorango:

Giannoulias’ Bank Made Loans To Mobster Michael “Jaws” Giorango, Who Was Convicted In 2004 For Running Prostitution Rings, And In 1988 On Illegal Gambling Charges. “Mr. Giannoulias and a spokesman confirm that the bank made mortgage loans to Michael Giorango for land in Florida and an office building on North Broadway just up the block from the bank. According to the FBI, Mr. Giorango was convicted in 2004 of helping run a nationwide ring of brothels and on bookmaking charges in 1988.” (Greg Hinz, “Alexi’s Business,” Crain’s Chicago Business, 3/13/06)

Starting In The 1990s, Giorango Secured Multiple Loans From Broadway Bank For Property In Chicago And Miami. “Starting in the 1990s, Giorango secured Broadway Bank mortgage loans and lines of credit totaling more than $6 million to control a Miami Beach hotel as well as several Chicago properties. In one instance, Broadway Bank lent Giorango and one of his property firms $2.5 million and extended a line of credit allowing him to borrow an additional $2.5 million, Miami-Dade County land records show. Those loans helped him finance his acquisition of the Lorraine Hotel in Miami Beach.” (Courtney Flynn and David Jackson, “Loans To Crime Figure Haunt State Treasurer Hopeful,” Chicago Tribune, 3/15/06)

Giannoulias’ Defended The Loans And Called Giorango “A Very Nice Person”:

Giannoulias Said He Met Giorango A Couple Of Times And Questioned Those Who Thought He Was A Criminal; Giannoulias Also Described Him As “A Very Nice Person.” “But Giannoulias said that since he became a full-time senior loan officer, he has met Giorango at the bank ‘a few’ times. He described Giorango as ‘a very nice person’ and questioned whether Giorango actually was a criminal. ‘Is he a crime figure?’ Giannoulias asked. ‘I don’t know what the charges are that makes him this huge crime figure.’” (Courtney Flynn and David Jackson, “Loans To Crime Figure Haunt State Treasurer Hopeful,” Chicago Tribune, 3/15/06)

Giannoulias Continued To Defend The Loans, Saying Giorango’s Legal Trouble Was Not The Bank’s Problem. “‘If every time someone got arrested the bank threw them out, I think it would be a problem,’ Alexi Giannoulias said. ‘We look at the commercial viability of loans, and that’s where we make our credit decisions.’”  (“Treasurer Nominee Says Giorango Loans Were Business Decisions,” The Associated Press, 4/8/06)

Giannoulias Defended The Loan And Said He Was Unaware The Loan Would Go To Gambling Purposes. “The Myrtle Beach loan went to a Giorango-run company called Highland Park Real Estate Development Corp. Giorango was the Highland Park company’s president and Stavropoulos was its vice president, Horry County, S.C., land records show. ‘From a commercial standpoint, it looked like a loan that should be made,’ Giannoulias said, adding he was unaware the marina was used to dock a SunCruz Casinos riverboat.” (David Jackson, “Loans Cast Pall Over Candidate,” Chicago Tribune, 4/9/06)

Giannoulias’ Good Friend And Campaign Supporter, Then-Senator Barack Obama, Said Giannoulias Needs To Explain Why His Bank Made Loans To Mobsters. “U.S. Sen. Barack Obama said Wednesday he is concerned by revelations that the bank owned by Illinois Democratic treasurer nominee Alexi Giannoulias’ family gave loans to a Chicago crime figure, and said the candidate owes him and the public a full accounting. ‘I’m going to take a look at what’s been going on, and I’m going to ask Alexi directly what is happening,’ said Obama, an early and enthusiastic backer of the first-time candidate, after a town hall meeting at York High School in Elmhurst. ‘I think it is absolutely appropriate for [Giannoulias] to have to explain what exactly the nature of the relationship was, how aware the bank was of some of the illegal activities that this gentleman had engaged in the past,’ he said. ‘I think that is something that, as his campaign goes forward, he’s got to explain to voters.’” (Rick Pearson and David Jackson, “Obama Demands Answers From Candidate,” Chicago Tribune, 4/13/06)

Giannoulias Eventually Took Responsibility For The Loans And Said He “Probably Should Have Looked Into It More”:

Giannoulias Finally Took Responsibility For Making The Loans.The Associated Press, 4/26/06) “Trying to put to rest questions that have dogged him since before last month’s primary, Democratic state treasurer candidate Alexi Giannoulias said Wednesday he should have known more about the criminal background of a man his family’s bank has loaned millions. Giannoulias said he didn’t negotiate the loans for Michael Giorango, a convicted bookmaker and prostitution promoter, but he is responsible for servicing nearly all of the loans at his family’s Broadway Bank. ‘So I am involved, and I do take responsibility for the loans that the bank makes,’ said Giannoulias, 30, a vice president and senior loan officer.” (Deanna Bellandi, “Treasurer Candidate Talks About Family’s Bank Loans To Criminal,”

Giannoulias Admitted That He “Probably Should Have Looked Into It More.” “Admitting he had been ‘too cavalier’ and ‘confusing’ in his past statements, Democratic candidate for treasurer Alexi Giannoulias tried to clear the air Wednesday about loans his family-owned bank made to two crime figures. ‘I should have taken more time to look at their background,’ Giannoulias said. ‘While we did our job as bankers to make sure that they were creditworthy borrowers and the value of the collateral was adequate, I probably should have looked into it more.’” (Scott Fornek, “Giannoulias: I Take It Back,” Chicago Sun-Times, 4/27/06)