Friday, December 18, 2009

The beginning of the end for the Giannoulias U. S. Senate Campaign?

The frontrunner in the U. S. Senate Democratic primary in Illinois, State Treasurer Alexi Giannoulias, feigned indignation Wednesday morning as he charged one of his three opponents, David Hoffman, with the “hypocrisy,” of owning stocks in some big banks at the same time Hoffman criticizes the banks’ lending/ investment behavior and drawdown of their reserves. Hoffman, a former federal prosecutor and Chicago Inspector General, seemed to relish the opportunity to “duke it out,” with his taller, but perhaps less vigorous debater, the thirty-three year old wunderkind, Alexi Giannoulias. Hoffman probably thought he was going to have to goad Alexi into a fight. Instead, Alexi was looking for an opportunity to engage the third place candidate at Wednesday morning's Union League Club of Chicago Forum.

Man bites dog

What went on here? A man bites dog story? Why would Giannoulias at 31% go after a third place candidate, Hoffman, at 9% in the polls, leapfrogging over Cheryle Jackson, at 17%.

Tom Bowen, Giannoulias’ campaign manager, responded to my inquiry with this statement:

When Giannoulias was a self-funder

Alexi is laying out Mr. Hoffman’s hypocrisy, that is all. There is no disputing that [Hoffman] is using his own money in this campaign and that he has hundreds of thousands of dollars invested in banks that were bailed out by the taxpayers.

But, Tom, it is hard to see voters, or even Alexi, getting indignant over that, even if true. Yes, Hoffman is self-funding a good chunk of his campaign. Not unlike the way Giannoulias self-funded a good chunk of his first campaign [for Treasurer in 2006]. That was before Alexi had built up trust, with union donors and other special interests, that his policies would appear to be favorable to them, and thus unions and others are now funding Alexi confident that they will get a handsome rate of return for their contributions. Not an illegal qui pro quo but a quid pro quo nonetheless. [If there is hypocrisy here, it is in Bowen’s or Giannoulias’ criticism of anyone else for self-funding].

Who invests in diversified portfolios

And, what is Tom Bowen’s problem with Hoffman having a diversified portfolio that includes some banks? No doubt, Treasurer Giannoulias understands modern diversified portfolio-finance theory and employs it in his own investment decisions at the Treasurer’s office. Are you telling us, Tom Bowen, that Giannoulias is boycotting investments in banks? That would be a news story.

Hoffman triggers the food fight?

Moreover, Hoffman’s ownership of bank stocks hasn’t stopped Hoffman from criticizing banks. Indeed, what Hoffman said Wednesday morning to trigger the food fight with Giannoulias was:

We need to increase the capital requirements for the big banks and community banks who have been irresponsible, irresponsible in terms of withdrawing too much money and putting their banks in harms way.

Alexi had heard this kind of criticism before and he thought he could knock Hoffman around a bit, intellectually that is. Yes, Alexi heard it as a slap at his family’s community bank, Broadway Bank. But, the real reason for Alexi’s response was that he wants to take Hoffman out now before he can grow a base.

Hoffman’s growing support

Alexi has seen, firsthand, the positive response that Hoffman got when he gave his independent, corruption fighter stomp speech on the North Shore, and Team Giannoulias does not want that to spread [In 2004, it was the North Shore that ignited Obama’s sweeping victory in the U. S. Senate primary, and in a sense that helped catapult Obama into the White House]. A strong three- way race between Giannoulias, Jackson and Hoffman is a race that anyone could win, or lose. [See the 2002 Democratic Primary for Governor, more on that in a subsequent post].

So, Alexi feigned indignation, saying:

[Hoffman] has hundreds of thousands of dollars of stock of these big Wall St. banks that is protected by TARP and he is now using that money to fund his campaign…The hypocrisy of going after big Wall St Banks when he uses that money to fund his campaign is staggering.

Well, the moderator, Chris Robling, with a smile and quip, or two, was doing his best to ignore the “debate within the debate,” and ask another substantive question to Hoffman, which Hoffman made short shrift of and then pounced again at Giannoulias. Clearly, Hoffman was licking his chops in anticipation that Alexi, like a big bear, would take the bait, and Hoffman was ready with his response.

Hoffman pounces:

I, like many Americans own stocks…I do own stocks in two of the big banks…my holding in those banks amount to less than one ten millionth of a percent of the ownership of those banks but the person to my right owns a much greater amount of a bank where not only was he …and still is a large owner, but for three years, he helped to run that bank and let’s be clear, it has nothing to do with my work, my history or anything like that, but for the person on my right, it’s a critical part of his experience. In fact, he has only held two jobs and the job just before this one was as the Vice-President and chief loan officer of a bank that is one of the worst performing in the country, so I am happy to continue this discussion at any time. [big time applause].

Note what happened here. A third place candidate had just been given an opportunity to showcase his skills as a corruption fighter, as a courtroom lawyer. Notice the prep in that answer: the highly structured language—the person to my right [individual G]—is repeated twice; And note how Hoffman emphasizes—if you are upset with fat cat bankers [as President Obama put it], please note that “I, David Hoffman am not a banker,” but for the person on my right, banking is a “critical part of his experience.” And, further, the person on my right was a banker at “one of the worst performing banks in the country.”

And, folks, where is Giannoulias looking as he is getting berated? Right at Hoffman, and he is doing so almost cordially. He clearly has been taught that he should do that –look at the other person speaking at a debate and smile respectfully. That usually is good advice. This time, not so much.

Giannoulias captured on video tape by Team Hoffman

Further, all of this is getting caught on tape, tape that the Hoffman campaign has. So, the above choice moments are not going to be seen merely by the 250, or so, attendees of the Union League Club forum. Nope, this has the potential to be cut up into 30 second or 60-second commercials, and then portrayed in the most negative light, shall we say, for Alexi Giannoulias.

But there is more. You almost think there should be some kind of “piling on penalty,” assessed against Hoffman, as he says:

Comparing the records: Giannoulias’ bad performance

[Giannoulias] says it is not fair to talk about banking when it is about his family. What the voters …deserve is a comparison between the records….when you are thirty-three years old and you have only held two jobs and your first job was as the chief loan officer of your family’s bank, it’s worth looking at how your performance was. That. bad performance is showing up in the bad performance of the bank now. It has nothing to do with his family. It is about his bad job performance when he was at the bank. …and I don’t know how he can ask us to trust him with the nation’s business in Washington when he couldn’t even protect the people’s money in his job as Treasurer. With regard to the Brightstart program, [that is] a program that on his watch lost 85 million dollars when money was invested in risky mortgage backed securities and junk bonds after families were told that their money was safe.

Notice again the structured, well thought out repetitive language: “Bad performance, bad performance, bad performance,” of this thirty-three year old who “has had only two jobs,” in his whole life and now wants to be your U.S. Senator. Even Barack Obama, who of course is the gold standard, had at least six jobs before he became your U. S. Senator—and Alexi wants to do it with only two? Well, think about that.

Giannoulias knocked to the ground

But, wait, there is even more. Hoffman has knocked Alexi to the ground and he kicks him one more time, just for good measure:

We have to be honest about the harmful effect of money in politics. Mr. Giannoulias talked about his pledge to not take certain kinds of PAC money or lobbyist money but what he left out was that he still takes some PAC money and some lobbyist money and I am the only one who takes no PAC money and no lobbyist money...

Has Giannoulias lost the honesty issue?

Note again the language choice—with Alexi looking on—“We have to be honest.” And, again, the repetitive framing. Just the right cadence:

He takes some, I take none. If you ever get to a point in a campaign where the voters identify you with honesty and the “the man on your right,” as lacking in honesty, well, then, the campaign is over: point, set and match.

Of course, we don’t think that has happened yet. Alexi had a healthy lead in the polls on Tuesday and he still has it. But, Hoffman got a lot of very good video footage of Giannoulias and Hoffman, side by side, and Hoffman should be able to make some very good commercials. Moreover, a lot of that can be Giannoulias in his own words--- and Hoffman responding to those words, and if Team Hoffman taped this right, they will have Hoffman and Giannoulias in the same frame; they may have reaction shots, or non-reaction shots, as the case may be.

Here is the Hoffman campaign's first effort to work with video from Wednesday. It doesn't knock your socks off. But, it is a start. And, they only spent a day on it. You can’t rush genius.

AKPD Media, Axelrod's ghost

However, as is well known, Hoffman’s outside media advisers are AKPD Media, David Axelrod’s old firm. If anyone knows how to maximize the impact of Wednesday morning’s video, that would be AKPD Media.

It will be interesting to see how this unfolds. Giannoulias still has a big lead, no doubt. Cheryle Jackson is still in 2nd place, with a shot.

Team Giannoulias gave Team Hoffman some crumbs

But, the guy in the 3rd place, David Hoffman, now has a shot, too. [The candidate in 4th place, Jacob Meister, with less than 1% of the vote, is not expected to be a factor in this race]. Good trial lawyers say they are too dumb to figure out how to win a trial. They prepare their case and they do their best. But, they sit or stand attentively and watch for the crumbs that their opponents, the man on the right, will throw their way. And, then, good trial lawyers pounce, opportunistically, and pick up those crumbs and strengthen their case. And, win, often, by virtue of the crumbs from their opponents.

Well, someone on Team Giannoulias gave Team Hoffman some crumbs on Wednesday. And, if Hoffman does win this election, the political wiseguys will mark the beginning of the end for Alexi Giannoulias, the man on the right, as Wednesday, Dec. 16. You can take that to the bank, maybe even Broadway Bank-- and collect interest.
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