Kirk Questions Giannoulias on $2.7 Million Tax Write-off

Alexi Giannoulias, who wants to be your next U.S. Senator, is a fairly young guy, and is a glib politician, sometimes to the point of being a bit flippant. Well, a comment Alexi made the other day may wind up getting Alexi in hot water with voters, and perhaps with the IRS.

As we discussed last week, despite having claimed that his involvement with his family's failed Broadway bank ended in September 2005, before the bank tanked and questionable loans to questionable characters were made, Alexi nevertheless claimed a $2.7 million tax deduction based on the claim that he worked more than 500 hours at the bank in 2006. Leaving aside the lack of consistency in Alexi's story (having come a full 360 degrees from his campaign for state treasurer when he was the brainpower behind Broadway), Alexi made light of his obligation to keep records documenting his claim for working at the bank in 2006, and his opponent, Republican Congressman Mark Kirk, was quick to pounce with a press release:


Kirk Campaign Expresses Serious Concern over Giannoulias Comment Suggesting He Cannot Justify $2.7 Million Tax Write-Off

“When asked about formal records of his hours logged there, he said he could ‘see if there's still video cameras of me being in the office.’” – Daily Herald, 10/3/10

Northbrook, Ill. – The Kirk for Senate campaign today expressed its serious concern over a comment made by Alexi Giannoulias on Friday to the Daily Herald indicating he claimed a $2.7 million tax-write off without any documentation to prove he worked at Broadway Bank for at least 500 hours in 2006.

Yesterday, the Daily Herald reported:

The controversy stems from a $2.7 million tax deduction Giannoulias received for losses in his share of the family's now-failed bank, Broadway Bank. Giannoulias got the deduction because he claimed to work at the bank for five of the last 10 years logging 500 hours in 2006.

Giannoulias, news reports pointed out last week, has told voters he was largely gone from the bank by then and was not involved in the bank's spring 2006 loan to convicted fundraiser Antoin "Tony" Rezko.

Giannoulias said Friday "there have been no inconsistencies" in his story. The Chicago Democrat has repeatedly reiterated that he left "day-to-day operations" at the bank in 2005, but formally left in April 2006.

"I continued to close out files and continued to work at the bank as I campaigned for state treasurer," Giannoulias said.

When asked about formal records of his hours logged there, he said he could "see if there's still video cameras of me being in the office."

“Mr. Giannoulias’ suggestion that he has no documentation to support the $2.7 million tax-write off he claimed raises serious concerns,” Kirk spokesperson Kirsten Kukowski said. “In June, Mr. Giannoulias said that when you run for office, ‘you need to be out there and be as transparent as possible and answer questions.’ We urge him to apply this standard to himself and explain how he could qualify for a $2.7 million tax write-off without any supporting documentation.”

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Given the IRS moves at a glacially slow pace to investigate such issues, there's little chance this controversy will blossom into any kind of official tax investigation before the election, but the specter of being so cavalier with his tax obligations may gain traction with voters in this tight race well before that. As the article also pointed out, the notion that Alexi maneuvered himself a multi-million dollar tax deduction when people are standing in the unemployment lines does nothing to bolster Alexi's image of a 'man of the people.'