* Democratic US Sen. candidate Alexi Giannoulias has two new TV ads up and running. I’m told they’re not being run in a way that dilutes the points. The first one we’ll look at is entitled “Heroes” and features a young African-American woman talking up the Bright Start college savings program. There are some obvious political calculations there, since the person polling second in this race is a black female. Watch it…

The second ad is called “Values” and talks about how he “recovered millions” when “Wall Street made improper investments.” Have a look…

I’ll have buy info for subscribers tomorrow.

Democratic rival David Hoffman may have gotten a sneak peak at the new Giannoulias ads, which were officially unveiled this afternoon, because he sent out a press release this morning. It’s long, but worth a look…

Giannoulias’ TV Ad Makes Questionable Claims About Bright Start

Illinois State Treasurer, Alexi Giannoulias, has a long-standing habit of claiming credit for the good things that happen during his tenure, but when it comes to taking responsibility for the mistakes and failures on his watch, he has been skillful at distancing himself. There is no bigger failure during his time as Treasurer than his mismanagement of Bright Start, the college savings program for families who aspire to send their children to college. And true to his nature, Mr. Giannoulias accepts no responsibility for his mismanagement and oversight failure of the $150 million that Illinois families lost in the savings fund.

Quite the contrary, Mr. Giannoulias has perpetrated a number of myths about his management of Bright Start that raise serious questions about his performance in office. This document lays out the many myths that Mr. Giannoulias has put forward over the last year and provides facts that will give you some perspective on the degree to which he has sought to duck responsibility for his mismanagement of Bright Start, and how he purposely misled the public about the catastrophic loss incurred by Illinois families who invested in the program.

As you begin to cover the last four weeks of the Senate Democratic primary, we hope you will ask the many questions about Bright Start that Mr. Giannoulias for more than a year has refused to answer. Voters deserve to know the true records of the candidates. Mr. Giannoulias has covered up his record with false claims and myths. You now have an opportunity to expose them.

Myth vs. Reality

True Loss to Bright Start Victims

Myth. From the very beginning of 2009, Mr. Giannoulias led the public to believe that Bright Start victims lost $85 million in the college savings fund.

Reality. On December 22nd when Mr. Giannoulias announced the settlement with Oppenheimer, he revealed for the first time that the true extent of the loss was $150 million.

Myth. On June 8, 2009, Mr. Giannoulias announced that he had a “tentative settlement” that would return 90 percent of the lost money to Bright Start victims.

Reality. On December 22, 2009, Mr. Giannoulias announced that the settlement would only return 51 percent of the lost money to Bright Start victims.

Giannoulias Markets the Core Bond Fund as Safe

Myth. In the Bright Start promotional material published by the Treasurer’s office, the Core Bond Fund was characterized as a conservative savings fund.

Reality. Mr. Giannoulias knows that the fund is investing in mortgage backed securities and corporate junk bonds. It said so in the Treasurer’s own promotional materials. Oppenheimer also told the Treasurer’s office on April 22, 2008 that, since fourth-quarter of 2007, the Core Bond Fund was investing in risky mortgage backed securities.

Myth. Mr. Giannoulias, a self-proclaimed experienced banker, should have known that risky mortgage backed securities were an inappropriate investment for families seeking to save money to send their children to college.

Reality. Mr. Giannoulias ignored all the warning signals, including the collapse of Bear Stearns under the weight of toxic mortgage backed securities and Morningstar financial analyst reports, and continued to allow families to invest their money in the Core Bond Fund from April of 2008 up until December of 2008, by which time they had lost almost 40 percent of their investment.

Myth. Mr. Giannoulias, knowing that the Core Bond Fund is heavily invested in mortgage backed securities and corporate junk bonds, claims he has no knowledge how the Core Bond Fund lost almost 40 percent of its value, and places all the blame on Oppenheimer.

Reality. Mr. Giannoulias emailed Oppenheimer on May 6, 2008, saying he wanted to discuss Core Plus’ underperformance. He demanded weekly status reports and monthly performance meetings. The fund was in a free fall, losing 20 percent by October 24, 2008 and 38 percent by December 4, 2008. From May 6, 2008-December 4, 2008, knowing full well that the Core Bond Fund was declining in value at a rapid rate, Mr. Giannoulias continued to allow families to invest in the fund.

How is Bright Start Rated?

Myth. Mr. Giannoulias routinely brags that Bright Start is rated as one of the top five college savings plans in the nation.

Reality. Morningstar Financial dropped Bright Start off its top programs list on May 14, 2009, citing losses in the Core Bond Fund due to investments in mortgage backed securities and credit default swaps.

Giannoulias Record on Transparency

Myth. Mr. Giannoulias claims “sunshine is the greatest disinfectant.” He claims that he imposed very tough ethics rules on himself when he became Treasurer.

Reality. Mr. Giannoulias stonewalled the Hoffman Senate campaign’s FOIA requests for documents on Bright Start for three months, which allowed him to continue to hide the true cost of the Bright Start loss and evade accountability.

Giannoulias’ View of Oppenheimer

Myth. On March 12, 2007, Mr. Giannoulias announces Oppenheimer as the New Manager of Bright Start. He promises they will have a good track record in investing Bright Start money.

Reality. On January 29, 2009, Mr. Giannoulias accuses Oppenheimer of “gross mismanagement.” He asks Attorney General, Lisa Madigan, to pursue a legal settlement to recover the lost funds. But after taking no responsibility for the mismanagement of Bright Start, and after blaming Oppenheimer exclusively for the loss, he keeps them as the investment advisor for the fund, where they continue in that role today.

Giannoulias’ View of the Bright Start Settlement

Myth. Giannoulias’ press spokesman put forth this reaction to the settlement: “This puts them back in the ballgame and will allow Bright Start families to move forward with their savings goals.”

Reality. Far from being back in the ballgame, Bright Start families have had their college savings plans decimated by the lack of oversight that Mr. Giannoulias failed to deliver in policing the hard earned money put away by these families. He is the Treasurer of the State of Illinois, one of the top financial officers of the state, yet he takes no responsibility for the devastating loss these families incurred. Mr. Giannoulias should ask any family who only recovered 51 percent of their investment if they “are back in the ballgame.”

Hoffman’s campaign, by the way, has a new Internet video trumpeting his endorsement by Paul Vallas. Take a peek…