May 8, 2009

IL Treasurer’s Intimidation of National Bank, and Union’s Invocation of TARP, Is Not National News

ObamaHartmax0509.jpgShoot, he’s only talking about pulling $8 billion in state-controlled money because a bank won’t go easy on a business borrower who can’t pay. What’s the big deal?

Well, the story involves the company that makes suits for President Barack Obama (pictured at right). Beyond that, the union at that company is citing the US Treasury Department’s Troubled Assets Relief Program (TARP) as a reason that company’s bank should in essence bail it out.

You might think that these two factors, combined with what I’m characterizing as a loyalty oath all financial institutions who do business with the State of Illinois must soon agree to (covered later), might make the Treasurer’s and union’s threats a national story. You would be wrong.

Here is most of the very short AP item, carried at the Springfield (IL) State Journal-Register, and referred to me by a NewsBusters commenter:

Giannoulias threatens bank over Obama suit-maker

Posted May 08, 2009 @ 06:06 AM

Illinois Treasurer Alexi Giannoulias is threatening to pull state business from Wells Fargo & Co. unless the bank stops trying to liquidate a company that makes suits for President Barack Obama.

….. The company filed for Chapter 11 bankruptcy Jan. 23. It employs about 3,000 workers represented by the Service Employees International Union.

Giannoulias spokesman Scott Burnham says Wells Fargo is custodian of an $8 billion state portfolio. Bank spokeswoman Jessica Walstrom says Wells Fargo empathizes with Hartmarx’s employees.

Union officials say the bank should help since it received a $25 billion federal bailout.

In a free media bias bonus, the AP item did not name the Illinois Treasurer’s party.

This would appear to be a replay of sorts of the Republic Window company situation last December, when union workers occupied their employer’s closed plant and demanded that the company’s lenders make them whole for lost vacation pay and other items. Under considerable public pressure, including that of a grandstanding, soon to be indicted, impeached, and removed Democratic Governor Rod Blagojevich, Bank of America and Chase Bank did just that, though they were under no legal obligation to do so, after Republic filed for bankruptcy. The banks’ decisions were surely influenced by President-elect Obama’s statement supporting the occupiers: “they’re absolutely right and understand that what’s happening to them is reflective of what’s happening across this economy.”

In a free media bias bonus, the AP item did not name the Illinois Treasurer’s party.

In related underplayed news yesterday, Giannoulias also introduced the near-equivalent to a loyalty oath that he expects banks to agree to if they expect to continue to do business with the State of Illinois (excerpt is from the Treasurer’s press release; bolds are mine):

State to deny banks that refuse community investment pledge

Illinois State Treasurer Alexi Giannoulias is demanding that Illinois financial institutions reinvest in the communities they serve if they expect future state money.

Beginning June 1, Giannoulias will require all financial institutions to sign a three-point community reinvestment pledge before receiving or renewing state deposits.

Currently, Illinois has deposits worth $1.4 billion in 205 banks, 26 credit unions and 20 savings and loans. The new pledge goes further than what’s required under current state and federal laws.

“This is the anti bailout,” Giannoulias said. “We are going to hold financial institutions” ‘feet to the fire” and ensure that state deposits go to good corporate citizens.”

Giannoulias worked in conjunction with the Monroe Foundation to develop the pledge that will specifically benefit traditionally underserved, low- to moderate-income and rural areas.

A Google News search on Giannoulias’s unique last name, with a grand total of 51 results (a very low number for almost any story of significance) shows that The Giannoulias-Wells Fargo story has not gained significant national coverage outside of Illinois, and that his “community investment pledge” intimidation campaign is virtually invisible.

As of 10:10 a.m. this morning, this preserved copy of AP’s raw national news feed containing stories that go back to early Thursday evening does not have a story related to either item listed, meaning that local readers ordinarily be the ones to catch wind of what Giannoulias is up to. The raw national feed as of 3:25 p.m. (also preserved is similarly barren.

It would appear that we’re beginning to get a handle on the real reasons why the Treasury Department won’t accept TARP repayments. They want to give a club to any and every activist and politician who wishes to use it to impose their will on any financial institution that might get in their way.

And this isn’t of interest to anyone outside of Illinois?

Cross-posted at


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