September 5, 2007

Obama's Fundraiser Woes (Update: More Info On Jaws' Connections)

UPDATE: A commenter tries to pass this off as a smear by the Post by claiming that Alexi Giannoulias didn't administer the loans to Michael "Jaws" Giorango and that Giannoulias was only 18 years old when Jaws got convicted of his crimes. Donna uses one out-of-context sentence from this Rich Miller column in 2006 to bolster that argument -- "There’s no real indication that the Giannoulias family bank did anything illegal. The younger Giannoulias didn’t even work at the bank when most of this stuff went down."

However, that's not really true. First, Jaws got convicted of crimes in 1989 and 1991, when Alexi Giannoulias was 13 and 15, respectively, but also in 2004, when Alexi was 28 and in charge of loans at the family bank. He also admitted to approving loans to Jaws and his associates in 2005 in order for them to buy a casino fleet in Florida -- after two federal bookmaking convictions and the most recent 2004 conviction of promoting a prostitution ring. All of that can be found here, in a Chicago Sun-Times report:

Earlier, Giannoulias also had tried to distance himself from the loans, saying they occurred in the 1990s, when he was not a full- time employee at the bank. But subsequent reports revealed that Giannoulias had overseen $11.8 million in loans to a firm run by Giorango and Stavropoulos last year when Giannoulias was senior loan officer. Some of that money was used to buy a riverboat casino marina in Myrtle Beach, S.C.

Giannoulias insisted Wednesday he only meant that the bank's business with Giorango began when he was away at law school. He said banking laws and regulations had barred him from volunteering information on the more recent loans.

"It wasn't an attempt to be misleading," he said.

Why would Giannoulias want to distance himself from those loans? His family bank's loans helped Jaws finance the hotel where he ran the prostitution ring -- and the next year, Giannoulias approved $11.8 million more in loans after his conviction.

Giannoulias ran for state treasurer based on his experience running the family bank, as the Sun-Times report states. Claiming that he knew nothing about the background of Jaws while approving eye-popping business loans to the convict seems a little hard to swallow.

Original post follows ....

Barack Obama has mostly managed to keep the Norman Hsu on Hillary Clinton's foot, but the New York Post reports that another rainmaker may drop some precipitation on Obama's parade. Alexi Giannoulias, state treasurer of Illinois, has a reputation for corruption so troubling that Democratic state legislators will have nothing to do with his money -- but that doesn't stop Obama (via Memeorandum):

A man who has long been dogged by charges that the bank his family owns helped finance a Chicago crime figure will host a Windy City fund-raiser tonight for Sen. Barack Obama.

Alexi Giannoulias, who became Illinois state treasurer last year after Obama vouched for him, has pledged to raise $100,000 for the senator's Oval Office bid.

Before he promised to raise funds for Obama, Giannoulias bankrolled Michael "Jaws" Giorango, a Chicagoan twice convicted of bookmaking and promoting prostitution.

Giannoulias is so tainted by reputed mob links that several top Illinois Dems, including the state's speaker of the House and party chairman, refused to endorse him even after he won the Democratic nomination with Obama's help.

At least Giannoulias provides one improvement over Hsu; he's never been convicted. His family's bank gave over $15 million in loans to Jaws while Giannoulias was its chief loan officer, however. That was enough to keep the state Democratic chair and the state's House speaker from endorsing Giannoulias, even after he won the primary.

This gets added to the percolating issues surrounding Obama's relationship with Tony Rezko. Obama initially downplayed Rezko's assistance to his political career, but it turns out that the indicted businessman garnered three times more money for Obama than he previously admitted. Rezko's support made Obama look like a candidate who could raise serious money -- even if it came from suspect sources.

These days, that's hardly a disqualifier, and Obama's Hsu exposure is not as bad as some prominent Democrats. However, put Giannoulias, Rezko, and Hsu together and one comes up with a large amount of questionable cash flowing into the Obama campaign.


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Comments (18)

Posted by Teresa | September 5, 2007 3:22 PM

Yes, it's too bad that Obama and Hillary don't have upstanding guys like Jack Abramoff donating to their campaigns.

Face it, the current campaign financing system is ripe for corruption and I seem to recall another one of Bush's big "rangers" going to jail for illegal donations to his campaign.

Posted by pk | September 5, 2007 3:23 PM

somebody so sleezy that the DEMOCRATS won't take his money, must be really gross.


Posted by Otter | September 5, 2007 4:09 PM

Neat thing about that donor for Bush going to jail, teresa: HE WENT TO JAIL.

And he won't get a pardon like marc rich. But I'll BET if Hillary gets to the WH, one of the above-mentioned may well get one.

Posted by unclesmrgol | September 5, 2007 4:24 PM

The outsider is an insider.

Posted by Teresa | September 5, 2007 4:25 PM

Otter -- Get back to me at the END of the Bush presidency and then let's talk pardons. My guess is that all sorts of interesting folks will wind up with one of these goodies.

And, by the way, I think it is wrong no matter which party gives them out if it is done in exchange for financial gain.

Posted by flenser | September 5, 2007 4:45 PM

The media made a big deal about Abramoff. Lets see if they pay any attention to these stories involving Democrats. I'm guessing not.

Posted by docjim505 | September 5, 2007 4:57 PM


Yep. "Nothing to see here. Nothing to see here. Move along. Please move along."

Posted by Donna | September 5, 2007 5:16 PM

Oops, I guess I was wrong that this site was a lot different that others which post inflammatory stuff without checking the facts.

Here is what googled up from an Illinois website of 3-23-06:
"There’s no real indication that the Giannoulias family bank did anything illegal. The younger Giannoulias didn’t even work at the bank when most of this stuff went down."

Back in that election cycle, the establishment Dems in Illinois were backing a states attorney from Knox county to run in the primary against 29 year old Alexi Giannoulias. Both during that primary and during Alexi's successful run against the Republican candidate for state treasurer, unsupported smears abounded trying without success to tie Alexi to a guy dubbed Jaws who had been found guilty of bookkeeping offenses in 1988 [when Alexi was, ahem, 18 years old]. After law school, Alexi went to work at the family's Broadway Bank, and though he had met Jaws, he had nothing to do with the bank's loans to Jaws for financing a hotel in Miami [the feds nailed Jaws for an interstate phone call boosting a prostitution ring that moved around the country, and which may have serviced people at the Miami hotel].

So, here is Captain Ed, blithely swallowing and then repeating whatever twistings of the truth were put out by the New York Post. Ed, this is not acceptable for your site. Do better next time, please.

Posted by Captain Ed | September 5, 2007 5:44 PM

Nice work in taking one sentence out of Rich Miller's column, which can be found here. Miller notes that Giannoulias admitted meeting Jaws on several occasions at the bank. Why would he do that if he wasn't working there at the time, especially if Jaws wasn't anything more than just another client? Miller finds another connection to the mob and Giannoulias' bank as well.

By all means, read the Miller column and ask yourself why Obama's connecting himself with this fundraiser.

Posted by Captain Ed | September 5, 2007 5:52 PM

Oh, and by the way -- Giannoulias oversaw loans in 2005 to Jaws and his associates to the tune of $11 million. A quick Google search finds that here.

Nice try.

Posted by Del Dolemonte | September 5, 2007 6:35 PM

Teresa said:

"Yes, it's too bad that Obama and Hillary don't have upstanding guys like Jack Abramoff donating to their campaigns."

LOL! Of course, when Abramoff steered money to Harry Reid and Tom Daschle and many other Democrats, on your planet it was perfectly legit, because they had a "D" after their names.


"Because of the makeup of his team and the composition of Congress, the Abramoff lobbyists channeled most of their clients' giving to GOP legislators, according to a review of public records. Sen. Conrad Burns (R-Mont.), chairman of an Appropriations subcommittee that frequently deals with Indian matters, received the largest amount from the tribes as well as from the Greenberg Traurig lobbyists who helped direct those donations: $141,590 from 1999 to 2004, the study showed.

But Rep. Patrick J. Kennedy (D-R.I.) ran second, with $128,000 in the same period. From 1999 to 2001, Kennedy chaired the Democratic Congressional Campaign Committee, which solicited campaign donations for House candidates."

Posted by Jack Okie | September 5, 2007 7:45 PM

Did everybody leave? Where are Teresa and Donna? Hello..?

Posted by Teresa | September 5, 2007 7:51 PM

Del -- I think if you reread my post you will see that I indicted the entire current state of campaign financing. I think public financing of elections is the way to go and that both the Dems & Republicans have plenty of blots on their spread sheets. The whole practice of "bundling" by high powered folks is just lousy with opportunities to corrupt the process.

Jack -- I've got little kids so there are times it takes me a little longer to reply because I'm busy with dinner, soccer lessons, homework etc... I try to check back after I get the kids to bed.

Posted by John Jay | September 5, 2007 8:16 PM

Abramoff's influence was not exclusively but overwhelming aimed at helping Republicans.

And his scandals reflect on his own character, not his recipients. Same with Hsu.

"... The big picture is also compelling. Taken together, Abramoff’s tribal clients gave $868,890 to Dems before hiring him; afterwards, they gave $794,483 -- a decrease of nine percent. By contrast, the tribes’ donations to Republicans went from $786,560 pre-Abramoff to $1,845,975 after he became their lobbyist -- an increase of 135 percent. In other words, when Abramoff entered the picture, contributions to Dems dropped, while donations to Republicans more than doubled."

Posted by Scott | September 5, 2007 8:19 PM

I thought McCain-Feingold was supposed to cure all of these problems. What went wrong?

All of the Democrats (), and now Mitt's fundraiser. One thing is for sure. McCain isn't raising enough money to have attracted any illegal contributions.

Fred Thompson, if you are reading this site, suggestion:

When a check is received, have someone just google the name of the contributer before you deposit the check. If arrests, convictions, improper behavior with children or in restrooms, or anything like that, shows up,

send the check back. Or better yet, release it to the press and then send the check back. The positive publicity was far outweigh the financials.

Posted by Del Dolemonte | September 5, 2007 8:52 PM

Teresa said:

"Del -- I think if you reread my post you will see that I indicted the entire current state of campaign financing."

Sorry, the very first sentence of your very first post said, and I quote:

"Yes, it's too bad that Obama and Hillary don't have upstanding guys like Jack Abramoff donating to their campaigns."

That's not an indictment of the "entire state of campaign financing", it's an indictment of one political party, which just so happens to be the one you're not a part of. Nice try!

Just curious: are you aware of the decades-long financial relationship former (Democrat) President Lyndon Johnson had with Halliburton? Dick Cheney was a rank amateur compared to Lyndon. And even Bill Clinton gave Halliburton no-bid contracts during his non-UN sanctioned war of choice in Kosovo.

Posted by zeke | September 5, 2007 9:29 PM

Yes, Illinois and corruption go hand in hand. The Dims have finally managed to bring corrupt Chicago machine shennanigans statewide! And we are at their mercy! BUT, this state is a RED STATE trapped in a blue state's body and eventually Illinoisans(outside of Chicago and Cook county) will see the light and kick the crooks out. Hopefully, to elect responsible Republican officials. Even after 8 years of Hillary/Obama. Hey, a guy can dream can't he?!

Posted by Donna | September 6, 2007 10:03 AM

Thanks, Ed. I am pleased that you took the time to look further. After reading your update, I myself did a whole lot of googling to try to determine whether the NY Post was smearing or simply reporting.
Alexi ran in the 2006 race for state treasurer of Illinois. The questions about his family's bank loans to Giorango, and others came in the spring of 2006. At least, here in Illinois, those reputed 'mob ties' were erased in terms of later support for Alexi. For example, the Chicago Sun Times endorsed him on 10-24-06, saying:
"While that banking experience is the reason we're endorsing Giannoulias, that background also has opened him up to criticism over some of the bank's loans. He's been accused of making million-dollar loans to felons. He insists there was nothing improper in those transactions, says that the bank doesn't do criminal background checks on bank customers, but admits he's been too cavalier in answering questions about the loans. Still, Giannoulias hasn't been accused of wrongdoing, and the loans were repaid. In other words, the community bank, which was in the business of making loans, did just that. "

Also, the Daily herald endorsed Alexi as early as 3-06-06, and the State Journal Register [not a liberal newspaper] endorsed Alexi on 10-26-06.

After doing this extra study, I more than ever believe that the NY Post was stirring the dust of old charges trying to discredit Obama, by association with an association with an association with....etc, all already refuted to the satisfaction of anyone not trying to create a new really stretched sound bite.

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