Broadway Bank, owned by the family of Illinois Treasurer, Senate Candidate and Barack Obama ally Alexi Giannoulias (D), was shut down by federal regulators on Friday. While Mr. Giannoulias tried to portray his "father's bank" as a victim of a bad economy, his political opponent sees it differently. A spokeswoman for US Representative Mark Kirk (R) said, "While years of risky lending schemes, hot money investments and loans to organized crime led to today's failure, it's a sad day for Broadway Bank employees who may lose their jobs due to Mr. Giannoulias' reckless business practices." (source)

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Broadway Bank's connection to organized crime has been well publicized. It loaned a pair of Chicago crime figures about $20 million during a 14-month period when Alexi Giannoulias was a senior loan officer and had already lent millions to Michael Giorango when he and a new business partner, Demitri Stavropoulos, came to the bank in mid-2004. Although both men were preparing to serve federal prison terms, Broadway embarked on a series of loans to them. Alexi Giannoulias took a senior position at the bank at about the same time and used it as a launching pad for his political career. (source)

Yet today Mr. Giannoulias bemoaned, "There was no bailout for my father's bank. It is an incredibly sad and heartbreaking day for me and for my family." Of course the family could collect millions in tax refunds by writing off bank losses and could take advantage of a special provision made available in the stimulus bill for writing off business losses. While Mr. Giannoulias said he would not take advantage of that stimulus bill provision, he couldn't say if others in his family would. That could certainly ease a lot of heartbreak.

Before the bank's failure, Giannoulias campaign chairman Senator Dick Durbin (D-Illinois) said President Obama intends to help Illinois Democrats "up and down the ballot." Assuming the president has enough political capital left to help any candidate, it remains to be seen what effect the failure of Broadway Bank will have on his willingness to help Mr. Giannoulias.