Did Carol Marin challenge and engage Alexi Giannoulias enough on his "Broadway Bank facts."

The Carol Marin interview last night on Chicago Tonight (WTTW) seemed, on its face, to cover all bases. You wouldn't say that Marin was throwing softballs at Alexi Giannoulias, State Treasurer and the Democratic Party's U. S. Senate Candidate nominee. But, as you watched the twenty-three minute interview (usually Chicago Tonight keeps these segments to fifteen minutes), you had the impression something was amiss.

Do Giannoulias' facts hold up?

And, that something is this statement by Alexi:

Less than 9% were loans that were initiated [by me] during the time...I think it's in the realm of twenty million dollars worth of loans that are now non- performing...so approximately twenty million dollars [of our family bank's current non-performing assets were initiated by me] ...the non-performing assets are in the range of $240 million dollars. [Emphasis Supplied]

Questions Berkowitz would have asked if he had been co-hosting with Carol:

Berkowitz: So, let me get this straight, Alexi, It was reported last December and in January:

From 2002 to 2006, Alexi Giannoulias increased Construction & Development loans from $80 million to $356 million - expanding such risky investments from 25 percent to 46 percent of the bank's total loan portfolio. (Chicago Reader, Alexi's Albatross, 12/3/09)

From 2002 to 2006, Alexi Giannoulias increased the bank's brokered deposits (also known as "hot money") fourfold to $640 million. The typical bank at this point was growing brokered deposits at about 9 percent a year. ("As Lender, Senate Candidate Impacted Bank Woes," New York Times, 1/30/10)

When Alexi Giannoulias left the bank, the ratio of brokered deposits to total assets at Broadway was 68 percent, according to FDIC records. The average for all federally insured banks nationwide was 4.5 percent. (Chicago Reader, Alexi's Albatross, 12/3/09)

[Hat tips for all of the above to Rich Miller's Capitolfax blog, Kirk for Senate Press Release and of course the Chicago Reader and the New York Times].

Berkowitz: So, Alexi, how do you square those facts with your assertion that you "initiated only 9% of your family bank's current, non-performing loans." I mean the risky Construction and Development loans more than quadrupled during your tenure as chief loan officer, right?

Berkowitz: And, during your tenure as the Chief Loan Officer, Alexi, the hot money brokered deposits increased fourfold, right?

Berkowitz: Further, if you were going to be able to pay higher interest rates to attract the hot money, you had to issue riskier loans to get the higher rates of return, right?

Berkowitz: So, it doesn't make any sense that you could be responsible for only 9% of the bank's non-performing loans, does it? I mean, when were all the bad loans made? In 2007 and 2008? I mean, the Bush bailouts started in fall, 2008, so your family bank only had nine months, at most in 2008 and all of 2007 to make those bad loans.

Berkowitz: Unless you are telling me the bad loans were made prior to 2002? Is that your argument?

Berkowitz: Or, are you saying that you weren't really the chief loan officer in 2002 to 2006? But, didn't you say you were when you ran for State Treasurer in 2006?
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Challenge, Probe and Follow-up

Well, maybe Alexi Giannoulias has good answers to the above. And, maybe the questions are based on erroneous premises. But, if so, the only way to find out is to ask the questions. There certainly are good faith assertions and facts to warrant the questions. Challenge, probe and follow-up. Isn't that what journalists do?
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The secret to a good interview

About a decade ago, I asked the late John Callaway, the original host of Chicago Tonight, "What's the secret to a good interview." Mr. Callaway said," Start with a script. If the guest gets engaged, throw away the script." Words to live by. I try to follow them every week on "Public Affairs with Jeff Berkowitz."

Well, when Alexi came up with that 9% statement, that was the big number of the night. Whatever I had planned or scripted, I would have tossed that out. Because the guest had become engaged with the 9% number. So, engage Alexi. That should have been the show. I think that's what John Callaway would have done. At least for five minutes. I mean, Carol had a bit more time than she is usually given. And, I say that as a compliment to WTTW. This was an important interview. It warranted the additional time.  .

Carol Marin and I would make a good team. That's what I think. A good cop and a bad cop routine. I'm not sure if we would always play the same role. Perhaps we could take turns. But one thing is for sure, the show would be engaging. And, that would surely please the late John Callaway.   

 

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