Carol Felsenthal
On politics

Houlihan on Giannoulias vs. Kirk: Alexi’s In to Win

Early Monday morning, I spoke on the phone with Jim Houlihan, whom I interviewed in person last Wednesday. I wanted an update on the Senate race in light of the closing of the Giannoulias family’s Broadway Bank on Friday. Houlihan was in Washington for the wedding of a friend, but he got a chance to see his pals, David Axelrod and Rahm Emanuel…

Early Monday morning, I spoke on the phone with Jim Houlihan, whom I interviewed in person last Wednesday. I wanted an update on the Senate race in light of the closing of the Giannoulias family’s Broadway Bank on Friday.

Houlihan was in Washington for the wedding of a friend, but he got a chance to see his pals, David Axelrod and Rahm Emanuel.

In Part I of this Q & A, the Cook County assessor said he would like to run for mayor. His Washington visit didn’t change his mind. Houlihan said the consensus among Obama’s “politicos” is that Daley will run again. (He added that he did not discuss the race with Emanuel, who last week also expressed interest in becoming mayor.) The assessor also said that he and the other potential candidates—the latest to express interest is 44th Ward Ald. Tom Tunney—must be sensitive that this is a “tough time for Rich.”

Here, part two of the interview with the assessor—with updates from our phone conversation yesterday

CF: The last time we talked, there were rumors that Broadway Bank would be shut down by the feds. It happened on Friday. What impact does this have on the race?
JH: I did see a statement by [Republican Congressman and Giannoulias opponent Mark Kirk], the kind of statement which is indicative of the politics of negativism. He’s laying every possible blame at Alexi’s feet, which is overstated. The speculation is over now, so the question is who would be the better senator. I think Alexi will show… that he has a much better grasp of the issues facing Illinois.

CF: Kirk focused on employees who might lose their jobs because of the family’s “reckless” lending practices.
JH: I don’t think the lending practices were reckless. I think it was just political opportunism on [Kirk’s] part to dance on the grave of the bank. The reality is that the bank was very successful… because real estate was so strong. Alexi’s role at the bank, I think, maybe, was overstated in the treasurer’s race. The politically-charged aspects of who some of the loans were to has to be separated from the viability of the bank and the financial decisions. You make your loans based on performance and based on numbers, supporting assets. If the loan makes sense, then you make the loan. [NOTE: The Chicago Tribune reported that, at the time Alexi was Broadway’s chief loan officer, the bank extended $20 million in loans to two convicted felons, Michael Giorango and Demitri Stavropoulos, who were on their way to prison.]

CF: Unfortunately another of the loan recipients was Tony Rezko. That couldn’t have been more loaded.
JH: Well, it’s very loaded now, and a lot of people are Monday-morning quarterbacking. But Tony Rezko—until he became involved in the Blagojevich issue—was a hard-working, successful developer. I think there’s a lot of taking what they know now and projecting and saying you should have known back then. It’s unfair.

CF: Obama has kept his distance from Alexi. It looked like he was really hoping that Lisa Madigan would be the candidate.
JH: I think that was more the operatives, Rahm and David; I don’t think that was Obama. I think Rahm and David saw Lisa as somebody who would be more an automatic election: look at their chart of things to do; if Lisa was the candidate, check it off.

CF: Are Axelrod and Emanuel looking to slip Alexi out of the race and substitute a new candidate?
JH: I don’t think they’re looking for a new candidate.

CF: Will Alexi win this slugfest with Kirk?
JH: I think Alexi will win. When it comes to the fall election, it’s going to be about the economy, the track record. We have yet to see Kirk explain a lot of his reversals. I think Alexi brings an energy and a freshness to the office… a real charismatic presence. It may be that people see that and they don’t see a very thoughtful young man. It’s easy to be distracted [because] when Alexi walks in a room, the room lights up. He’s got the magic. 

CF: What other gossip or info did you pick up in Washington this weekend?
JH: There’s a lot of concern about how the Illinois legislative session is going to impact the election [here] this fall. Illinois doesn’t seem able to deal with the deficit that is looming—not only at the state level, but also at the city level. And that conversation has overshadowed what I think is probably the most important issue for the future: the quality of education that should be provided for each of our kids.
[NOTE: Houlihan supported Dan Hynes against Pat Quinn in the gubernatorial primary. He told me that he now supports Quinn, adding that he and the governor used to play basketball together.

CF: How is Quinn doing as governor?
JH: I think he’s in a very difficult position. He has to articulate with some consistency his desire to address the serious problems, and he has to work with the legislature, and it doesn’t appear as if Speaker Madigan is willing to address the fundamental issue of the deficit.


4 years ago
Posted by chris robling

Party loyalty sometimes asks a lot.

Here, it knocks on Jim's door to be a lonely supporter of Alexi's in a difficult time. Jim has replied admirably -- from the standpoint of party loyalty.

From the standpoint of political analysis, at which Jim excels as well, he falls far short of the moment. At a time of widespread anger at incumbents for variety of government, economic and societal ills, Alexi is permanantly linked to loss of Brite Start funds, lax oversight of his choice to operate Brite Start, merrily driving around in a Brite Start SUV while hemorrhaging Illinois parent investments, Tony Rezko, convicted mobsters getting big loans w/o background checks, Tony Rezko's upcoming starring tenor role in the Blago trial and... what else?

Oh, yes -- the failure of the bank whose loan operation he led as "senior loan officer," and from whose footstool of success he stepped onto Illinois' vaunted political ladder.

Jim may think political opponents are unfair -- or "overstated" -- to point out these elements of Alexi's record. He may think that Alexi's positions are more in line with those of Illinois voters. But those thoughts are beside the point that these lapses -- and Alexi's many others -- have implicated his very suitability for high office.

Iow, who will wait to hear the positions when the messenger is so questionable?

(I of course think Alexi's positions are awful and he would do better to return to his Republican roots, but doing so would only make his prospects even worse.)

Jim is a loyal party person carrying water to his donkey. Sometimes party loyalty asks for a clear-eyed assessment. Here is mine: Alexi is deeply flawed in his present role.

4 years ago
Posted by Still Here

I disagree with Chris Robling in downplaying the importance of who's positions are more in line with those of Illinois voters. I think that will be of primary importance come November. And slightly behind it, but only slightly, will be the economy and the question of whether the Democrats are to be rewarded or blamed.

4 years ago
Posted by Still Here

you don't have to be a banking expert to realize Jim Houlihan is full of it on Broadway Bank. After all, most community banks didn't fail. Only the banks that lent very significantly to real estate developers and owners to the exclusion of balance in their portfolios went kapluie. They did that because those loans were laden with up front fees which allowed them to rake in earnings while exposing and overexposing the bank in a very cyclical sector. And I can't agree that you look at the asset and not the borrower in a bank loan- the character of the borrower is as important as the quality of the collateral. Mobsters aren't welcome at most banks.

There is no question in my mind that this bank was badly mismanaged. Of course, that doesn't mean that Alexi mismanaged it. Jim is probably right in saying Alexi's credentials for becoming State Treasurer were overstated. The question now is who will better represent the people of Illinois in this incredibly politically supercharged Senate. For all his obvious faults, I still think the answer may be Alexi, and my current intention is to hold my nose and vote for him.

4 years ago
Posted by PaulMcGrath

Unfortunately, the question boils down to whether Alexi will be a reliable vote for the Democratic agenda, and he will. The other stuff is distasteful but irrelevant.

But how about this: Just to complete the farce that this election has become, Alexi gets persuaded to drop out and then Scott Lee Cohen is persuaded to drop his independent gubernatorial candidacy and run for the Senate as a Democrat. Naw, I guess not.

4 years ago
Posted by H-bomb

In response to Chris Robling's comment about party loyalty, Houlihan did criticize Lisa Madigan, and she is a member of his party.

4 years ago
Posted by carol f

This observation was emailed to me and the sender asked me to post it "without attribution."

The sender described Jim Houlihan's defense of Broadway Bank's lending practices as "utter nonsense."

"I was in the banking industry for about 20 years. The group with which I was involved purchased troubled banks and cleaned them up.

In the late 1980's or early 1990's, we were introduced to Broadway Bank, which was an under-performing bank with troubled assets, including (if my memory serves) loans to questionable characters.

Over time, one telltale sign of a troubled bank is a concentration of real estate assets in the loan portfolio. For community banks, another sign of trouble are loans made outside the bank's operating region. Base on what I have read, Broadway was grossly mismanaged, which was a continuation of what I had seen."

4 years ago
Posted by jerpaul


4 years ago
Posted by law student

"Alexi's got the magic!" "You just feel inspired when you see him!"

sounds like......

"He's a handsome charming fellow that makes all the boys and girls tingle! He's so sweet!"

What a fruit. Houlihan is an idiot. I've seen Alexi in person twice. He talks about whoever is running the fundraiser as if they are the greatest person ever. This is the type of things people say to make something seem nice when there's nothing nice about it. Empty praise with no facts. I don't vote for people because they are charming. I vote for them because they are honest and hard working.

The real question with Giannoulias should not be about how many criminal investigations have been centered around his associations should be how many people still got away? Or what has he actually done that should EARN him a vote?

The broadway bank scandal is deep. Alexi has sucked at every job he has had. His family bank would probably not have ever survived but for their ties to corruption. Kirk is a little wacky, but extremely trusted an respected by the majority of people he currently represents. Not to mention 10 years experience and a military career...Please make Alexi stop. Him as a senator is a travesty of the American dream and experience.

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