Tuesday, October 5, 2010

What's Alexi Giannoulias's Definition of "Paid Leave"? Depends When You Ask Him... (UPDATED x3)

I guess whether Democratic U.S. Senate Candidate Alexi Giannoulias has been caught in a lie (or several lies) about exactly when he left his family's now-failed Broadway Bank depends on what the definition of "paid leave" is, compared to what the IRS would consider working at least 500 hours is.

A brief recap of the timeline for those of you who are also having trouble keeping Alexi's ever-changing story straight: Alexi first claimed he was the Broadway Bank wunderkind during his campaign for State Treasurer, and was the bank's senior loan office and in charge of its investments, right up until at least March 2006 (according to an interview Alexi did for the Windy City Times). He later changed his story once the charges of questionable loans came out, and not only did he do a complete reversal on the significance of his role as loan officer at the bank (he told ABC-7 news that he was responsible for only 9% of the bad loans at the bank, for example), his campaign stated that he "left daily operations" of the bank in September 2005.

However, when the quote from an interview with Alexi in the Windy City Times came up in an August 3rd post by Rich Miller at Capitol Fax Blog, Alexi's campaign responded to Miller that Alexi "took leave" in 2006. But, that didn't square with the fact that the Tribune also uncovered that Alexi was paid $41,000 in income in 2006 from the bank. This led the campaign to clarify to Miller that Alexi 'was on a paid leave'. Okay, got all that? Well, that little detail seems to have been forgotten when Alexi filed for a $2.7 million tax break based on his devotion of at least 500 hours working for his family's bank in 2006.

So, which is it? Did Alexi leave daily operations of the bank way back in September 2005 (which is not consistent with what he said on the campaign trail as late as March 2006) and was simply on 'paid leave' in 2006, or did this 'leave' really mean that was he working for the bank for at least 500 hours in 2006 (which is what he represented to the IRS)? We may never know, because Alexi apparently doesn't have any records to back up his claim, and suggested to the Daily Herald that maybe someone could check the bank security tapes to see if he was there or not in 2006.

Recall that the original Tribune article that broke the story on the IRS angle noted the following:

Giannoulias said he has been clear that he left the "day-to-day" operations of the bank in September 2005 to prepare his first run for public office, but was on paid leave until May 2006 when he left completely to campaign full time for treasurer.

That 2006 work consisted of roughly 30 hours a week closing out his responsibilities before quitting as a bank officer, and didn't involve making new loans, Giannoulias explained in a recent interview. It was more than enough to qualify him for the tax break, he said

So, waitaminutenow: all of a sudden, 'paid leave' means working 30 hours a week until May 2006??? Funny how Team Alexi didn't mention that detail to Rich Miller when he was checking into this in August.

Greg Hinz at Crain's also picked up on the 'paid leave' explanation offered by Alexi's team back in early August, but Hinz also apparently wasn't informed at the time that the 'leave' meant that Alexi was actually supposedly working 30 hours a week. We only heard that once the IRS story broke in the Tribune.

This controversy over Alexi's apparent inconsistencies in his story continues to build, and now it appears that even left-leaning (to put it mildly) Chicago Tribune columnist Eric Zorn is starting to doubt Alexi's veracity, or at least his political acumen:

In April, after the Tribune began asking questions about still more questionable loans, we reported that Giannoulias said in a written statement "that he was 'one of' the senior loan officers at the bank and was not a member of the loan committee that approved the financing. …"

The inconsistencies here seem to be not so much in what Giannoulias has said — an apparent bit of resume embellishment notwithstanding — but in what he has allowed or wanted the public to believe about his role at Broadway Bank.

Was he a hotshot with the financial chops to take over the state treasury at age 30? Or just an up-and-coming loan officer who wasn't always in the loop and was halfway checked out when some dubious deals went down?

And his mistake has been keeping this controversy fresh for more than four years now by letting the details dribble out.

I'll say this: In failing to stay out in front of the story, Giannoulias has been remarkably consistent.

I would humbly suggest that if you are a liberal Democrat like Alexi, and you've lost Eric Zorn, you've lost the election.

UPDATED: I wrote the piece above late last night (I initially even misspelled "Giannoulias" in the title, but it's only slightly easier to spell than "Blagojevich," so perhaps you'll all forgive me) so this is more of a few additional thoughts rather than an update per se.

The issue here, as Zorn also gets at (sorta), is was Team Alexi trying to mislead the voters at any stage of this long-developing story?

Most significantly, when Alexi's campaign spokesperson first claimed he was "on leave" and then clarified it with the contention that it was a 'paid leave', this was all in the context of the campaign trying desperately to distance itself from the suggestion that Alexi could have been involved in any way to the Broadway Bank loan to Tony Rezko that the Sun-Times uncovered back in August. They needed to make it sound like he was gone, baby, gone, so they first said that he had left 'daily operations' in September 2005, and then when confronted with the fact Alexi was still claiming in March 2006 to the Windy City Times to be a current, active bank officer (which fact was uncovered by yours truly, thank you) changed the story to 'he was on leave', and eventually after it was revealed that Alexi was paid $41,000 in 2006, it became 'paid leave'.

Now, after it has come out that Alexi claimed a $2.7 million tax break based on working at the bank in 2006 for at least 500 hours, we can look back at Alexi's slowly evolving explanation, and see that at best, his team was being disingenuous by claiming that he had left "daily operations" and moreover "on leave" when it was clear that the intent was to distance himself from the bank as much as possible in the wake of the Rezko loan revelation.

Remember what Giannoulias's team told the Sun-Times when the story broke:

Through a spokeswoman, Giannoulias says he knew nothing about the $22.75 million loan to Riverside District Development until reporters contacted him.

"Alexi left daily operations of the bank in September of 2005, months before this loan was made," says Kathleen Strand of his campaign staff. "He had no knowledge of it, and his name is not on any documents related to the loan.

If Alexi had responded that he "only" worked at Broadway Bank through May 2006, as he's saying now, instead of implying that he'd cut off his ties with the bank in September 2005, you can bet there would have been a lot more heat applied to Alexi over that loan.

Maybe there should be now.

UPDATED x2: One more set of thoughts: if Alexi was actually working 30 hours a week (75% of a 40 hour full-time week) for more than 4 months into 2006, as he says, a "leave" in common parlance doesn't seem to square with being paid 30 hours a week, so it appears Alexi was being misleading right there.

Plus, if we believe him that he stopped his work on "daily operations" in September 2005, this would imply that he spent over 7 months (from September 2005 to May 2006), at around 30 hours a week, simply 'wrapping things up' and trying to clear off his desk so he could concentrate on running for State Treasurer.

Frankly, even the 500 hours he claimed for 2006 seems like an awful lot of time simply to close out what you were working on since September 2005, never mind what he was doing from October 2005 to December 2005.

Reasonable? I think not. Truthful? I think not either.

UPDATED x3: I'm not the only blogger who is focusing on this. Marathon Pundit did a nice compilation of relevant news stories last week. Check it out.


Anonymous said...

Hey, TA, Alexi is just not up to the challenge. Eric Zorn's column in today's Tribune is good, makes some salient points about the boy wonder - NOT.
How about the endorsement from the Northwest Herald for Mark Kirk! Nice way to begin the day for the Kirk team and for our future Senator.

A. Bees said...

My not-so-humble prediction is that this is going to come out as a pure case of tax fraud.

I am speculating, but I would bet that Ma and Pa Giannoulias were supporting Boy Wonder on his state-wide run for Treasurer. However they wanted to set things up so that they were both politically AND fiscally beneficial. They didn't take into account that the bank was going to get into a ton of trouble and that Boy Wonder was going to get pulled into such deep scrutiny.

In truth if he had run for a second term as treasurer, this probably would never have become such a big issue. There wouldn't have been the designated research team to find all the details. But, following the family line, he got greedy and now he gets to wallow in his own political quagmire.

Ain't Democracy great!