Voters cannot ignore Alexi Giannoulias' past
In the 2023 mayoral election, the Chicago Teachers Union and their chief ally, the Service Employees International Union, handpicked former CTU organizer Brandon Johnson, not because of his vision or ideas but because he was someone over whom they could exercise undue influence. Johnson has been a disaster, and as Chicago nears the 2027 mayoral election, the trade unions are signaling they intend to use the same formula to select a successor to Johnson by pouring millions of dollars into the coffers of their preferred candidate early to “clear the field.” Their candidate is Alexi Giannoulias.
Giannoulias, the current Secretary of State, reminds us of Kamala Harris: Woefully unaccomplished, incredibly vacuous, deeply incurious about critical issues, and unwilling to take risks. Yet party power brokers are eager to throw big donations his way to dissuade potential challengers for the 2027 mayoral election. Despite the massive fundraising haul, Giannoulias enters the race with considerable baggage. Though Giannoulias’ political past includes several episodes which should prove to be an Achilles’ heel, he is depending on Chicago’s lazy media to ignore his troubled history and voters’ short memory.
To begin any careful examination of Giannoulias’ past, it is probably helpful to start with a scandal that took place while he served as State Treasurer. During his tenure as Illinois State Treasurer (2007–2011), the state’s Bright Start 529 college savings bond program he administered experienced significant losses within a specific investment fund managed by Oppenheimer Funds Inc. The college program allowed families to invest money for their children's college educations. Among the advantages of the program were tax benefits and lower costs than private investment alternatives. Bright Start also allowed investors to split their money among many investment options.
However, because of risky investments in mortgage-backed securities and other volatile assets during the 2008 financial crisis, investors lost approximately $150 million between January 2008 and January 2009. To address the losses, Giannoulias and then–Attorney General Lisa Madigan negotiated a landmark settlement with Oppenheimer Funds that resulted in Oppenheimer agreeing to pay $77.23 million to Illinois families. The toll on investors, however, was staggering: 65,000 affected account holders were only able to recoup about half (approximately 51–56 percent) of their specific fund losses.
When the scandal became known to the public, Giannoulias was criticized for “sloppy management,” yet his office maintained they acted faster than other states facing similar issues and were among the first to secure a recovery for families. The problem with Giannoulias’ arguments is that the Bright Start program offered investors (parents) a choice of investments depending on their level of risk. The category that ensured parents the lowest level of risk to their investment lost 50+ percent, and why? Because Alexi’s office wanted to beat other states’ rates of return, even in low-risk investments, and invested in mortgage-backed securities as opposed to less risky government bonds or risk-level equivalents.
Equally troubling is federal regulators seizing a family-owned business, Broadway Bank, that helped launch his political career. While running for State Treasurer, Giannoulias publicized his role as a senior loan officer at Broadway as an asset to voters. Federal officials seized the bank in April after Broadway missed a deadline to raise $85 million in capital. News surrounding the bank worsened when it emerged the bank was engaged in dubious loans and questionable financial dealings with organized crime and the shady Antoin Rezko.
At the time news broke of the bank’s seizure, Giannoulias attempted to whitewash his role, explaining the conditions that led to the bank’s failure occurred after his departure. “At the time I left, according to every independent analysis, the bank was one of the best-performing in Illinois. The bank was a victim of an economic tsunami. Unlike some larger financial firms, there was no bailout for my father’s bank.” Another scandal for which Giannoulias had no plausible explanation, the cost to the FDIC — taxpayers — for Broadway’s takeover was estimated at $394.3 million.
Giannoulias’ lapses in judgment are not limited to his role as a loan officer or carelessness with taxpayers’ money. Donations to his political campaigns have become problematic. While most donors are legitimate, Giannoulias’ association with businessman Perry Mandera is troublesome. With reputed associates involved with organized crime, Mandera operated a topless bar on the Near North Side.
While Mr. Giannoulias appears untroubled by accepting political contributions from donors with interests in naughty nightclubs, what is more concerning with Mandera’s handouts is that Mandera also holds a position with Custom Companies, a Northlake-based trucking firm. This is problematic for a number of reasons, primarily because Giannoulias’ Secretary of State office manages issuing driver’s licenses, which encompasses the issuance of commercial licenses and learner’s permits. This overlap between Giannoulias and Mandera should raise some eyebrows.
By far, what is most disquieting about Mr. Giannoulias’ baggage train of scandals is the recent revelation his Secretary of State office had illegally issued non-domiciled commercial driver’s licenses (CDLs). According to an annual review carried out by the Federal Motor Carrier Safety Administration (FMCSA), it was discovered 20 percent of non-domiciled CDLs issued by Giannoulias’ office failed to comply with requirements in federal code.
In a damning conclusion describing the conditions inside the Secretary of State’s office which led to the licenses being illegally issued, FMCSA judged that “evidence of systemic policy, procedural, and programming errors” ran like a seam through Giannoulias’ office. FMCSA also stated in its conclusion that the agency found 15 instances in which Giannoulias’ office issued non-domiciled CLPs or CDLs but could not furnish any evidence to verify the drivers’ lawful presence in the United States. Worse, according to FMCSA, Giannoulias’ office was unable to furnish federal investigators with “sufficient management controls to prevent these errors or catch them if they occur.”
At the time of the report being issued, Secretary of Transportation Sean Duffy warned Giannoulias’ office that failure to comply with federal regulations could lead to the state forfeiting $128 million in federal highway dollars. Unsurprisingly, Giannoulias of course argued his office is in full compliance with federal CDL rules and the findings “do not justify cutting federal highway funding.” Giannoulias added his intent to review the FMCSA report.
These scandals cannot be dismissed as "old news"
In the past, any one of these scandals would have disqualified a candidate for further political office, but these are different times. Giannoulias’ troubled political past — managerial incompetence, accepting donations from seedy patrons, squandering tax dollars — are matters with which the public should not overlook. For when we ignore these aspects of a candidate, focusing only on the resume, we can — and often do — wind up with scandals, both fiscal and moral, which debase our democracy, undermine the rule of law, and decrease public respect for officeholders and thus government itself.
Union supporters and select corporate interests, the latter of whom had supported Kim Foxx and Lori Lightfoot, seem unconcerned not only about these Giannoulias scandals but also his refusal to stake out clear policy positions on every major issue facing the city: Violent crime, failing schools, the pension crisis, and spiraling property taxes. Judging by his social media presence alone — a combination of exercise videos and Trump bashing — Giannoulias is more concerned with appearing voguish and gregarious rather than a potential candidate with a governing vision for Chicago.
With the City of Chicago confronting serious challenges, Chicago voters must go to the polls with the aim of electing a mayor with vision, insight and, above all, leadership skills.
Mr. Giannoulias is not endowed with these qualities.
