Giannoulias risks backlash in calling out 'corporate rogues'

Alexi Giannoulias is trying to broaden to other companies the potential taint of political contributions from Goldman Sachs Group Inc. employees.

Giannoulias, who counts Obama as a mentor and basketball buddy, yesterday called on his Republican opponent to return campaign contributions totaling more than $380,000 from 14 companies and their employees. Three are Illinois companies in the area -- Abbott Laboratories, based in Lake County's Libertyville Township, Chicago's Boeing Co. and Deerfield-based Baxter International Inc. Collectively they employ about 19,000 workers in the state.

The strategy carries with it political risk in a state where unemployment is 11.5 percent, said Jim Schmidt, executive creative director at the advertising firm Downtown Partners Chicago.

"You do risk offending them and their employees by intimating that they did something wrong," Schmidt said. "In general, those companies are considered good corporate citizens."

Mark Kirk, a five-term congressman from Chicago's northern suburbs who is the Republican nominee competing against Giannoulias, said earlier this week that he would return more than $20,000 in contributions from Goldman Sachs employees amid a fraud lawsuit filed April 16 against the bank by the Securities and Exchange Commission.

Donations from the bank's employees, including almost $1 million to Obama in 2007 and 2008, have become an issue for political candidates from both parties as the president and Democrats in Congress push the most sweeping changes to financial regulation since the Great Depression.

Labeling them "corporate rogues," Giannoulias's campaign called on Kirk to return $381,075 in contributions it said he has taken while in Congress from "corporations that, like Goldman, have been charged with, or found liable of, fraud."

"Given his own proclaimed standard, it is reasonable to expect Congressman Kirk also to return the almost $400,000 worth of contributions from corporations that, like Goldman Sachs, have defrauded taxpayers and, in some cases, brought on the financial crisis," said Matt McGrath, a Giannoulias spokesman.

The new line of attack comes as Giannoulias's family faces the potential closure of the bank they have owned since 1979.

Broadway Bank in Chicago, whose wealth helped finance Giannoulias's successful 2006 bid for state treasurer, has been operating since January under a consent agreement with the Federal Deposit Insurance Corp. because of commercial real- estate loan losses. The family must raise at least $75 million by next week to meet regulatory demands.

"With his family bank moments from collapse and a huge tax windfall awaiting him, Alexi Giannoulias would rather attack Illinois employers and their workers than find solutions to expand opportunities and create new jobs," said Kirsten Kukowski, a Kirk spokeswoman.

In an opinion piece posted yesterday evening on the Chicago Tribune's Web site, Demetris Giannoulias, Broadway Bank's president and chief executive officer, said the institution "could be closed by regulators."

Demetris Giannoulias, who is the candidate's brother, criticized the "outdated" practices of regulators and asked for more patience from them.

"Over the past few years, we made decisions that -- though sound at the time -- resulted in a high level of nonperforming assets," he wrote. "Where big banks got a bailout, all we ask is to be allowed to live, with the capital we have, until the market turns around -- as it already has for the big banks."

Giannoulias, who has pledged not to accept corporate political action committee contributions, listed regulatory, legal and other issues involving the 14 companies.

For Abbott, Giannoulias referred to an investigation by the U.S. Justice Department over sales and marketing activities for Depakote, which is used to treat bipolar mania and epilepsy.

Adelle Infante, an Abbott spokeswoman, did not respond to a request for comment.

In the case of Baxter, the Giannoulias campaign listed a $2 million settlement with Kentucky over pricing for intravenous solutions from Baxter Healthcare, a subsidiary. The company's media department didn't respond to a request for comment.

John Dern, a spokesman for Boeing, said Giannoulias's allegation of "high profile fraud cases including attempting to use insider trading to secure a lucrative no-bid tanker contract" contains errors.

The company has in the past dealt with defense-contract scandals, including allegations of improperly acquiring documents, which resulted in government fines and the resignation of executives.

"I'm not eager to get into the middle of this other than to say some spelling and fact-checking work needs to be done on future releases" from the campaign, Dern said.

Criticism of the companies by Giannoulias is misguided, said John Challenger, chief executive officer of Challenger Gray & Christmas, a Chicago-based workplace consulting company.

"It's wrongheaded trying to capitalize, in a risky way, on the anti-corporate and business environment," Challenger said. "Many of these corporations have supported both parties, so I don't think you want to start demonizing, especially in this state where we have lost corporate headquarters.

"You might be able to score some political points in the short-term, but it's not good for the state."

<div class="infoBox">

<h1>More Coverage</h1>

<div class="infoBoxContent">

<div class="infoArea">

<h2>Stories</h2>

<ul class="links">

<li><a href="/story/?id=375344">Troubled bank a potential stain in Senate race <span class="date"> [04/22/2010]</span></a></li>

<li><a href="/story/?id=374361">Kirk to return Goldman Sachs donations <span class="date"> [04/19/2010] </span></a></li>

</ul>

</div>

</div>

</div>