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* Many of us have been impressed with the way Alexi Giannoulias has handled himself as state treasurer. But his family’s bank is gonna dog him for a long while, I think. Today’s Sun-Times story is headlined “Alexi the amnesiac?”…

llinois State Treasurer Alexi Giannoulias was accused Tuesday of evading questions and playing a “game” about what he knew about a $1 million bank loan he gave in 2002 to an 86-year-old, “feeble-minded” woman.

Giannoulias was loan officer at his family’s Broadway Bank when he agreed to give the loan to Loren Billings, who once ran the city’s Museum of Holography. She had applied for the loan with co-signers who had a history of fraud. Billings’ family is now suing the bank.

Giannoulias testified he had concerns about the co-signers and approved the loan only after their names were removed. Still, Billings’ family says that within a day of Giannoulias cutting her a check, more than half of it was made out to a firm those co-signers were associated with, GnXpert Neural Technologies. […]

Later testimony revealed Billings can’t fill out basic forms on her own, though Giannoulias testified “she was confident in what she was doing” and given that she was willing to mortgage her business and home on the loan, “it would be a prudent loan.”

More…

Giannoulias was the loan officer on the Billings loan, although he had only been working full-time at the bank for about a month. He testified Tuesday that he did not recall whether he personally investigated Billings’ financial records but that he believed other bank officials most likely had done so.

He appeared largely unruffled during about three hours of questioning, though he frequently could not remember details, often repeating, “Again, that was five years ago.”

At one point, William Cook, an attorney for Kasprazak, protested about what he called Giannoulias’ “evasive dodging” on whether the loan was prudent.

Giannoulias eventually agreed that if the loan were based only on Billings’ tax return information, “I’m not sure it would be a prudent loan.” But Broadway Bank attorney Damon Cheronis argued that the question was not proper.

In a statement released Tuesday, bank officials argued that the lawsuit was “fraught with baseless claims and factual errors” and that they expected to prevail.

Billings “clearly understood the terms of the loan,” bank officials said in the statement.

posted by Rich Miller
Wednesday, Dec 5, 07 @ 9:30 am

Comments

Somewhere, Judge Mangieri is having a good laugh about this.

Comment by Bill Wednesday, Dec 5, 07 @ 9:35 am
“Vote for me, my daddy owned a bank and gave me a job I wasn’t qualified for. Barack the Messiah says I’m a fine young man (OK, so my daddy gave Barack lots of money, but the Messiah would never mislead anybody). Do you really need any more?”

That was your criteria for selecting for your state treasurer. There were other such revelations during the campaign, but nothing else mattered because Obama endorsed him. Soon, you will all forget the Tony Reszko real estate “deal” and vote for Obama in droves. Since he’s now running for President, Obama will distance himself from Alexi, but will say nothing negative about him or his past.

Conveniently, the media will continue their love affair with Obama and not ask him any probing questions about Alexi’s past, his bank’s past and possible connections to Obama, and what Obama knew. They will not ask him whether he actually investigated Alexi’s background prior to endorsing him. Of course, the Reszko Affiar is off limits, too.

As for Alexi, either he is a perjurer who is hiding some dark secrets, or his long term memory is so bad that he must suffer from some kind of reverse Alzheimer’s Disease. I won’t venture an opinion as to whether he’s lying or has an extremely bad memory, but either way, it hardly qualifies him to hold such a high office.

Comment by Snidely Whiplash Wednesday, Dec 5, 07 @ 9:49 am
Well, what are the responsibilities of the bank in this situation.

Am I presumed at aged 86 or 83, depending on which account you read, to be unable to make decisions or to not have the freedom to make bad ones. On what basis is that decision made, beyond a formal court order declaring me incompetent, which presumably was not the case here.

If banks are to become our mothers, baby boomers need to raise the alarm, as there will be increasing numbers of us in the coming decades.
Along with a lot of greedy relatives.

Comment by Cassandra Wednesday, Dec 5, 07 @ 9:55 am
Cassandra, I think that the issues at hand here are judgment and integrity. Why the shift in focus away from Alexi individual and the institution-bank?

Comment by Snidely Whiplash Wednesday, Dec 5, 07 @ 9:59 am
Correction: Why the shift in focus away from Alexi the individual and to the institution (the bank)?

Comment by Snidely Whiplash Wednesday, Dec 5, 07 @ 10:00 am
Yeah, because Judge Mangieri hasn’t had his own problems as of late.
http://www.the-paper.net/articles/2007/04/27/breaking_news/00_breaking_news.txt

Comment by Juice Wednesday, Dec 5, 07 @ 10:07 am
I have to side with Cassandra on this one. The women had at least 10k a month in income and was asking for a large loan. Billings family seemed uncocnerned with here “febble mindedness” until she went out and obtained a loan. Now the Family, seeking to create inheritance money, suddenly is concerned about her state of mind? if she was feeble minded the family should have brought proceedings long before to have a guardian of her etsate appointed. the Family is the one who dropped the ball in protecting Ms. Billings, if she truly needed protection. The fact she was 86 and drawn to a bad investment seems questionable grounds for calling her feeble minded. AT&T went bankrupt investing in questionable buisness, I see no reason why an 86 year old is not free to invest their money however they choose. If this business had panned out and made millions in return I doubt they would be praising Giannoulias and giving his bank some of the gain for agreeing to risk the loan. She was either in need of protection before hand and the family dropped the ball; or there was no reason to suspect she needed protection in which case the Bank doesnot need to act in loco parentis.

Comment by Ghost Wednesday, Dec 5, 07 @ 10:10 am
Christine Radogno must be laughing this morning.

Comment by Ravenswood Right Winger Wednesday, Dec 5, 07 @ 10:10 am
I agree with Snidely on the Obama connection in spirit somwhat but not letter. You do not have to be a genius to be a loan officer; less so if your father owns the bank.

Paragraphs 2 and 3 are basically correct; however, after the Clintons are done cutting up Senator Wonderful, Alexi could be distancing himself from Obama. (I’ll admit this is a possiblity more than a probability–maybe Alexi’s kindergarten records are more accessible as they are more recent.)

The Greek community is solidly behind Alexi, and it is generally known that Greeks love to donate money to other Greek politicians, regardless of their own personal ideology or party affiliation.

That said, it would not surprise me one iota if Alexi runs for Governor in ‘10. The state treasurer does not have to take controversial positions (or positions in general) and can stay out of the current Springfield fray. His disconnection from the Madigans could be a benefit in light of the public’s perception of our current government (even though Rod is to blame, no question.)

Finally, with regard to Alexi’s lying or bad memory–if he indeed only had one month on the job it is almost certain the final (or original) decision on that loan was not his at all.

Comment by Fun(d)-Raiser Wednesday, Dec 5, 07 @ 10:12 am
Well, it sounds as though he was a twentysomething new bank officer in the family bank, presumably following some kind of standard process for giving loans. Even if he made a mistake, which is up for debate, couldn’t you chalk it up to inexperience.
After all, it is the business of banks to make loans. Why presume malfeasance when they don’t turn out well. I suppose a lot of them don’t turn out well, and not all of those are awarded to
83 year old women. Are elderly women to be treated differently in the giving of loans? Yikes.

And before I am accused of being partisan, let me
reiterate that I voted for Judy and Christine. And
were there another election tomorrow, I would do the same.

Comment by Cassandra Wednesday, Dec 5, 07 @ 10:14 am
It looks to me like this is a bunk lawsuit that will ultimately fail. If the bank backs down on this one, why wouldnt everybody who’s gotten a loan come in and do the same thing. The bank has to fight this and the bank will win.

By the way, is it me or did the names of those other dudes who went with her for the loan sound like Russian mobsters? What was she doing with these guys in the first place? My bet is that the family thinks its easier to get a loan erased by suing the bank, rather than dealing with Russian mobsters. They’ll poisen you! Ask the dead KGB guy.

Comment by The Pacifist Wednesday, Dec 5, 07 @ 10:20 am
What you’re missing here is the fact that Alexi himself admitted to some suspicion as to the intention of the individuals who brought her in for the loan and only approved it when their names were taken off of it. Would a prudent loan officer think there might not be a back-up plan for getting their hands on the money? If he suspected they were taking advantage of her and therefore took their names off the loan, wouldn’t common sense also dictate that the loan itself was to their advantage and not hers?

Obviously, there is a court case pending and the issue of whether these people actually took advantage of her is still undecided, but what is now known is that Alexi had his suspicions and took action on them only to protect his bank, and left the elderly borrower out on a limb. Sure, the bank was now protected because if Granny defaulted, the bank would take her property and wouldn’t lose its money.

I’m curious as to what exactly Alexi’s suspicions were. If he suspected that the co-borrowers were con artists, then I think he should have at least the moral obligation to at least attempt to protect an elderly woman from financial ruin. Then again, maybe I’m being over idealistic in a dog-eat-dog world.

Comment by Snidely Whiplash Wednesday, Dec 5, 07 @ 10:21 am
Ravenswood: Senator Radogno is in for the fight of her political life. I don’t think she is laughing about anything right now…

Comment by Fun(d)-Raiser Wednesday, Dec 5, 07 @ 10:21 am
“his family’s bank is gonna dog him for a long while”

You are right Rich. There is too much smoke in this room. There is a fire somewhere.

Comment by VanillaMan Wednesday, Dec 5, 07 @ 10:35 am
I echo cassandra’s sentiments. At what point do we relinquish control of making our own decisions. I’m sure this sort of thing happens alot in our banking industry, thousands of loans get approved daily, whats the difference if its a family relative that takes advantage. Lets call in the banking police to monitor the industry. It’s only an issue because it’s more of the continuing enuiendo that started during the election. I say enough already. The fact is the treasurer has done a phenomenal job in his first year in office, more than I can say for any other constitutional officer, including our governor. It’s those lacking the progressive mindset that continue on this very path, they like seeing more of the same.. mass transit thats a disgrace, county system thats falling apart and legislatures who don’t have the guts to act on their own. So before you question integrity, you should really evaluate and look around.

Comment by Realist Wednesday, Dec 5, 07 @ 11:03 am
Oh so there’s more to his time at Broadway Bank than him lending money to a mobster? WOW!

Comment by Levois Wednesday, Dec 5, 07 @ 11:08 am
I have been VERY impressed with Alexi. He has been a breath of fresh air, and in Illinois’ political climate, sometimes it takes a “rich boy” who can buy an election and not be beholden to anyone to do the right thing and act as his own man. Her certainly has done so.

However, these were the same concerns that dogged him last year. If Alexi goes down in flames because of this, it’s not like every paper in the state - save for the Sun-Times - didn’t try to make his banking and mob issues know.

Then again, banks and lending institutions often give out many questionable loans. The current mortgage and foreclosure mess should remind us of that.

Comment by Team Sleep Wednesday, Dec 5, 07 @ 11:11 am
I think that everyone needs to relax a bit and let the court of law determine innocence or guilt. Reading through some of the responses on this thread I can’t help but think that some of them sound very biased and discriminative.

Obama has nothing to do with this case. Nor is Rich caring or asking if Radogno is smiling this morning.

Facts are that he gave a large loan to an elderly lady, who may or may not have been coerced by members of her family to apply for it. I think that unless we are talking about possible scenarios, its unfair to judge Alexi without waiting to see how it plays out.

Relax!

Comment by YouNeverSawMe Wednesday, Dec 5, 07 @ 11:29 am
His family’s bank is going to “dog” him?

The bank that keeps being ranked as #1 bank in Chicago by Crain’s? The bank that has tons of customers who praise the family for the help and service they have provided over the years?

I just hope the Sun Times pays as much attention to the case when Broadway wins and declares that this was a frivolous lawsuit by the Billings family.

Comment by get real Wednesday, Dec 5, 07 @ 11:34 am
Ok, there’s one paragraph in the S-T story which, if true, pretty much sums everything up:

“A senior loan officer asked a Billings relative if they were sure she knew what she was doing, while Billings’ monthly income would have barely covered each month’s loan payments and she applied for the loan with questionable people — all “red flags” that family attorney Peter King wondered how Giannoulias could have missed.”

Assuming that this paragraph is a statement of absolute fact, my feeble mind comes to the following conclusions:

1. A senior loan officer was involved along with Alexi, so at least any deserved blame on his part can be shared with a superior in the bank.

2. The senior loan officer believed that the woman applied for the loan “with questionable people,” so the loan shouldn’t have been made.

3. The monthly loan payments would have consumed almost the entirety of the woman’s monthly income. I’m not a banker, but doesn’t that tell you as a loan officer that your bank would eventually be the proud owner of her collateral? The loan shouldn’t have been made.

3. The senior loan officer had concerns over the woman’s fitness to make financial decisions and acted on them by approaching a family member. The loan shouldn’t have been made.

4. Alexi admitted to having “concerns” about the co-borrowers and removing them for the loan. So, it seems logical that he knew all of the above. Alexi shouldn’t have made the loan.

5. The senior loan officer had these suspicions yet made the loan because the elderly borrower’s property was given as collateral. The bank (and Alexi) protected the bank, but did nothing to protect the elderly borrower other than to ask family members if she was sure of what she was doing.

6. Approaching the family with these concerns was probably enough to cover the bank’s (and Alexi’s) behind and to put the family on notice.

7. At least one family member was informed of the bank’s concerns about the lady’s mental fitness and their opinion about her co-borrowers, so the bank and Alexi are probably not entirely blameless, assuming any blame is deserved.

8. As Fun(d) said, the decision to make the loan was in all likelihood made by someone higher than Alexi within the bank.

Never let it be said that Snidely conveniently ignores facts contrary to his own opinion.

Comment by Snidely Whiplash Wednesday, Dec 5, 07 @ 11:37 am
Is it possible that Madigan knew about the “skeletons in Alexi’s closet”, and that is why he never closed ranks with Alexi. I think that is the case. What do you people think?

Comment by MOON Wednesday, Dec 5, 07 @ 11:56 am
I think what Mike Madigan may or may not have known about Alexi is completely irrelevent to this topic. I also think I should find something better to do with my day off from work, but dammit, it’s terrible outside!

Comment by Snidely Whiplash Wednesday, Dec 5, 07 @ 11:58 am
Snidely –

since you have such doubts about Giannoulias’ qualifications, what standards are you using?

Were you one of people, like Christine Radogno, who argued that our Bright Start program was a “great” program, only to be “surprised” to find out that it was ranked 49th in the country? Are you one of those that ignored the Morningstar report declaring the reformed Bright Start under Alexi is now one of the country’s top 5 529 programs?

Maybe you are one of the supporters of other political figures that refuse to follow any measures that limit “pay for play” politics — much less enact the widest ranging ethics order (like Giannoulias has).

Whoever you are, you are definitely someone who thinks a story about a bogus lawsuit is more important to the constituents of the State Treasurer than is a story the same week (in Crain’s) showing how that same Treasurer pulled the state’s investment funds out of mortgage-based securities and thus insulated state funds from the subprime loan meltdown.

Snidely — I don’t know what name you were using while slamming Alexi during the campaign, but you are using the same rhetoric. But you now have a big problem. . .you can’t question Alexi’s qualifications or experience the way you did during the campaign, because he is doing a great job as Treasurer.

Comment by The Truth Wednesday, Dec 5, 07 @ 12:05 pm
Moon –

“skeleton’s” in Alexi’s closet? Madigan and his crew tried to make something out of this “going nowhere” lawsuit and other exaggerated/fictional/mythical claims, and as Alexi’s supporters predicted, those manufactured scandals went nowhere, because there was no substance behind them.

The Madigan crew wishes there were “skeletons” because there is no one in this State with a more promising (immediate) future than Alexi. He is the one statewide who can both boast a track record of achievements (even in one year), a vision, and accountability.

Wake up people. This lawsuit is going nowhere, and will be yesterday’s news very soon. Alexi is going to be making great headlines for years to come.

Alexi for Governor! ! !

Comment by Wrath of Khan Wednesday, Dec 5, 07 @ 12:26 pm
To “The Truth:”

I have never posted under any name other than this (at least as far as I can recall, since I’ve used this one for so long).

Quite honestly, I don’t have much issue with his job performance to date. My issue has, and continues to be, his qualifications at the time he ran, the questions pertaining to loans made by him and his bank, and the way he vaulted to office with little life or professional experience at such a young age simply because Obama did campaign commercials for him. You seem to be implying that I’m some kind of Republican (or perhaps Democratic?) polical operative. I really wish that were the case, but sadly, I’m just a schmuck with too much time on his hands today and nothing else to do because I don’t want my car to look like Rich’s by venturing out on such a dangerous day for driving.

Government is a big job, and I don’t think that the state level is where one should learn the ropes. My barometer for qualifications is a long history of working in actual government, or a long history of professional experience in a field related to the office.

While I realize that most actually get into government based on family, friends or “money” connections, the way he came out of nowhere and got elected simply because Obama called him “a fine young man” really makes me question us as an electorate.

Comment by Snidely Whiplash Wednesday, Dec 5, 07 @ 12:27 pm
Wrath

Forget the lawsuit. I’am referring to Alexi’s judgement and business practise. Overall I think Alexi has done a good job since he has been in office.

Comment by MOON Wednesday, Dec 5, 07 @ 12:33 pm
The way this looks to me is that Alexi and the bank did nothing wrong what so ever. There are laws and regulations that had to be followed and were followed.

Treasurer Giannoulias is one of the most qualified persons to ever be elected State Treasurer and he proves that over and over again.

He has a great future in our State. Keep up the good work Treasurer Giannoulias.

Comment by (618) Democrat Wednesday, Dec 5, 07 @ 12:34 pm
Alexi’s obviously closing in a strong first year in office. I don’t think his opponents will get much mileage out of a lawsuit like this.

A credit decision isn’t based on just reveiwing income–there are lots of factors, like net worth, value and liquidity of collateral, guaranties and other security.

The bad guys seem to be ignored in all this. And they aren’t the loan officers.

Comment by corvax Wednesday, Dec 5, 07 @ 1:20 pm
Well, at least we all seem to be on the same page that Alexi is doing a great job.

As for the judgement and business practices that we all should be concerned about (and that he is responsible to us as voters for) try these on for size:

(1) At a time when everybody else wants to raise our taxes but make no cuts to their favorite programs or government employees, Alexi cut his own budget (by $200,000 I think).

(2) For those of us with 529 plans for our kids, he gave us more options, less fees, a better performing program, and unlike his predecessor, if his Bright Start doesn’t perform, he won’t punish (he removed the tax penalty with his first piece of legislation) an Illinois parent for using another state’s 529;

(3) He kept us out of the subprime loan mess at a time when some other states are writing off BILLIONS of bad investments.

(4) In less than one year, he has kept ALL OF HIS CAMPAIGN PROMISES (ethics reform, Bright Start overhaul, higher rate of return, environmentally friendly programs/Green Rewards, etc., getting more for unclaimed property through ebay auctions), etc.

If our statewide officers were all stocks, everybody would be buying Alexi.

Comment by The Truth Wednesday, Dec 5, 07 @ 1:33 pm
Snidely Whiplash wrote:

“Government is a big job, and I don’t think that the state level is where one should learn the ropes. My barometer for qualifications is a long history of working in actual government, or a long history of professional experience in a field related to the office.”

*** Isn’t that the same philosophy keeps patronage in Cook County and other State offices?

Comment by YouNeverSawMe Wednesday, Dec 5, 07 @ 1:38 pm
Unfortunate that a frivolous lawsuit can smear the good name of a honest public official. If Alexi was not state Treasuer, he never even would have been called as a witness. Banking is a heavily regulated industry and thus all loans are reviewed closely. If he denied the loan the family would be suing for age discrimination. From what I read about Giannoulias he is doing a great job and is loaded with intergrity. This nuisance suit should not detract for that.

Comment by Rocket Wednesday, Dec 5, 07 @ 1:47 pm
* 34,000 bidders in first week of Ebay auction as opposed to 150 in all of 2006. More money (which goes to paying pension obligations from this auction goes to State.)

* 529 program goes from highest fees to lowest fees.

* New 529 manager gives $35 million for scholarships for low income students.

* Cuts his own office’s budget by $200,000.

* saves the State billions by pulling out of mortgage-backed investments.

* BrightStart goes from 49th ranked 529 program to top 5.

* Stopped the bleeding on two hotel deals tolerated for 2 decades by all the “experienced” pols, and saw them magically turn into profitable hotels as soon as the old guys were thrown out.

Moon — would you rather still have Judi’s business judgement than this?

and Snidely — the electorate apparently got this one right. Alexi is not only a “fine young man” but he is a “fine public servant” and as Obama predicted a “great Treasurer”.

Comment by Numbers Don't Lie Wednesday, Dec 5, 07 @ 1:47 pm
All of you recognize that I am just a little right of Genghis Khan, but a single 2002 deal when not the young Loan Officer but the Bank’s loan committeee would have had to approve.

These loans are not just made through the transom Loaning a million requires careful documentation or The Federal Reserve, the state bank examiners et al will come down on the bank like a ton of bricks. A loan of that size is likely syndicated to other banks as well.

Plaintiff’s attorneys always hit a vulnerable name in hopes of inducing a settlement.

As far as I can tell, Alex is doing good work at the State level. Leave him be.

Comment by Pete Speer Wednesday, Dec 5, 07 @ 2:46 pm
The only universal qualfication to be an public offical is the ability to get elected.

Now that Alexi G has been elected, I think the only way to legitamately evaluate him is based upon his perfroamnce in office. He seems to be doing a good job as State Tresurer.

Personally I don’t have voter’s remorse about voting for him when he ran agsint Radagno.

Comment by Captain America Wednesday, Dec 5, 07 @ 3:07 pm
If you can’t bilk an 85 year old woman out of her money-why bother comin’ to work? You can’t take it with you so why not fund technological progress. Chalk this up to public service and be done with it.

Comment by Garp Wednesday, Dec 5, 07 @ 3:24 pm
Okay, now that we have determined this is a bogus lawsuit and we are all on the same page about Alexi doing a GREAT job in office, let’s reinstate the draft, and draft Alexi for Governor

Comment by Southside Tony Wednesday, Dec 5, 07 @ 3:49 pm
This story probably sounds very familiar to anyone with grandparents or older parents, and there is no easy answer.

Seniors want to remain active and independent for as long as possible, and react almost with violence to any effort to force them to relinquish control over their lives. Whether your talking about taking away their driver’s license, or taking control of their bank accounts, or moving them to a nursing home.

At the same time, their children and grandchildren live with the dread of them getting in car accidents, getting ripped off by con artists, or falling helplessly in their home in the middle of the night.

I’ve been through this with three grandparents and I can tell you it is tough. At the same time, I’m sure I’ll feel exactly the same as they did when I’m 70+ years old.

I haven’t heard about any criminal charges being introduced in this case, so I presume no one is arguing criminal intent on behalf of Alexi or the bank.

And the plaintiffs have not entered into evidence, at least at this point, any proof that federal or state banking regulations were violated.

From what I can gather, the woman’s family was aware that she getting involved in this business deal at the time, yet they did nothing. Perhaps they were afraid of angering her and getting written out of her will. But I have to agree with others that they seem to be much more culpable than the bank, and they are no where close to proving negligence.

Comment by Yellow Dog Democrat Wednesday, Dec 5, 07 @ 4:30 pm
Garp says:

“If you can’t bilk an 85 year old woman out of her money-why bother comin’ to work? You can’t take it with you so why not fund technological progress. Chalk this up to public service and be done with it.”

*** I can’t believe Rich is allowing some of these to be said. I’ve seen FAR worse get warned.

At this point– no matter…

I think that you will always have your cynics out there. If Alexi was to say that he goofed and made a bad call of judgement, he would be slammed. If he lets the courts find the blame (as he should!) then he gets responses such as some of the ones we have seen today.

Comment by YouNeverSawMe Wednesday, Dec 5, 07 @ 4:59 pm
Moon
You must struggle with intelligence to say the least. That is probably why Madigan hired you in the first place so you could follow him around like a lost puppy. Listen, the only reason Madigan didn’t back Alexi is because Alexi wouldn’t wait his turn to be Treasurer as little Mikey asked him to do. Period.

Comment by Smart Money Wednesday, Dec 5, 07 @ 5:05 pm
OK, everybody take a deep breath and relax. Enough with the insults.

Comment by Rich Miller Wednesday, Dec 5, 07 @ 5:14 pm
Number Don’t Lie -
Well put! To the rest of you give the guy a break, he has done an excellent job as state Treasurer. Keep up the good work Alexi!

And for the rest of you; “those in glass houses..

Comment by Reality Check Wednesday, Dec 5, 07 @ 8:10 pm