Giannoulias, Kirk Debate on “Meet”

Courtesy of NBC News’ “Meet the Press with David Gregory”

October 10, 2010

DAVID GREGORY: Good morning. With only 23 days to go, the campaign team of President Obama and Vice President Biden heads to Philadelphia today to try to rally Democrats to turn out for Pennsylvania Senate candidate Joe Sestack (PH). But here in Washington this morning, it’s all eyes on the tight battle in Illinois.

PRESIDENT OBAMA ON TAPE: , Chicago. (CHEERING AND APPLAUSE) Oh, it’s good to be home.

DAVID GREGORY: The fight is personal for the President.

PRESIDENT OBAMA ON TAPE: In some very tough circumstances, in a tough political season, now he has not wavered. And that’s the kind of person that you want. That’s the kind of person that you know when the going gets tough in Washington will be fighting for you.

DAVID GREGORY: Democratic State Treasure Alexi Giannoulias, neck and neck with five-term Republican Congressman Mark Kirk. Battling for perhaps the most famous Senate seat up for grabs in this Midterm race, President Obama’s former seat. For the GOP, it’s the ultimate prize.

UNIDENTIFIED VOICE: The fact of the matter is, if Democrats hold the majority, it’ll be because they held the President’s Senate seat. If they lose the majority, it means that one of the seats they lost is the President’s Senate seat. That’s the ultimate repudiation if you’re an– former Illinois Senator now sitting in the oval office.

DAVID GREGORY: It is also a race that was marred by scandal from the start. When President Obama left one end of Pennsylvania Avenue for the other, then Governor Rob Blagojevich ignored objections from Democratic leaders and appointed a former State Attorney General, Roland Burrs (PH) to the seat. Blagojevich was later arrested. Charged with attempting to sell the President’s old Senate seat. Then the campaigning began and the scandals continued.

UNIDENTIFIED VOICE: (UNINTEL) named Mark intelligence officer of the year.

DAVID GREGORY: Kirk, a Navy reservist has a list of erroneous or exaggerated claims about his military record. Including his service in the Gulf War and during the invasion of Iraq. And Giannoulias, the 34-year-old former college basketball star, who played professionally in Greece, has been plagued with questions surrounding his family’s troubled bank. And whether Giannoulias, at the time a senior loan officer with the bank, was aware of $20 million in loans to a pair of Chicago criminals.

UNIDENTIFIED VOICE: If all you’re looking at is the negative side, you have a choice between a serial embellisher and a mob banker.

DAVID GREGORY: So, how will Illinois voters decide and what will the outcome say about this Midterm campaign? And joining me now, Republican Congressman Mark Kirk and Illinois State Treasurer Democrat Alexi Giannoulias. Welcome to both of you. To our studio. And– and to this debate. Meet The Press style. So there are no set rules. We’re sitting around this table. We’re gonna have a conversation. And we’re gonna go through the issues. And there’s a lot to get to, so let’s get to it.

I don’t have to tell you both the specter of President Obama hangs over this race, because indeed it was his Senate seat that you are now vying for. And it was on election day, November 4th, 2008, in Chicago, when the President and his family appeared after he was then the President Elect. And this is what he said.

PRESIDENT OBAMA ON TAPE: It’s been a long time coming. But tonight, because of what we did on this day, in this election, at this defining moment, change has come to America.

DAVID GREGORY: Mr. Giannoulias, let me start with you. How would you define the change that has come to America under President Barack Obama?

ALEXI GIANNOULIAS: Well, I think it’s important to put things– in context. And if you look at the mess that he inherited and the enormous challenges– that he inherited. A trillion dollar– deficit. Increasing job losses. I think he’s done– everything he can to help– turn this economy around. The question is going forward, what more can we do? We focused our campaign on creating private sector jobs. We’ve talked about infrastructure. We’ve talked about– moving forward with the next generation of clean energy– clean energy jobs. Tax breaks– to small businesses. Job creation tax credit– for small business. A payroll tax holiday for low to moderate income workers. Doing everything we can to get that one and a half trillion dollars that’s– quite frankly sitting on the sidelines in the private sector encouraging and promoting–

DAVID GREGORY: So, the country’s better off in this economic recession because of the change that President Obama brought?

ALEXI GIANNOULIAS: I think if you look at– what would have happened– if some of the measures weren’t taken, and again they weren’t po– weren’t perfect. For example, I think when you look at– TARP, the bailouts of the biggest banks, something that Congressman Kirk– voted for. I think I would have liked to have seen– as– as a former community banker– some more oversight, some more accountability, a requirement that these banks lend money– to help increase access to capital. Something we’ve done in the State Treasurer’s Office. I think that was– a missed opportunity.

DAVID GREGORY: Congressman Kirk, you had said at– a rally back in March– GOP rally that– Obama– that we are– about the President. “We are on the way to making this guy a one termer.” How do you answer that question? How do you define the change he’s brought to America?

REP. MARK KIRK: A tremendous amount of debt. I got a chart here that shows our debt to G.D.P. ratio. And while we did run– deficits in the past, we now number our debt in trillions rather than in billions. And I think that represents a long-term danger, especially to the– the American Dream. Every American born today owes $43,000 to the federal government, the day she or he is born. And if we are transferring a tremendous amount of debt to the new generation, much of it owed to overseas creditors, who expect to be repaid by our children with interest.

DAVID GREGORY: But Congressman as a Republican Member of Congress, do you really want to stand by your party’s record on the debt, going back since you came to Congress?

REP. MARK KIRK: No, I’ve become very much of a fiscal hawk here. I– I foreswore earmarks from my own Congressional district. We could save $66 billion right there. The Kirk Amendment passed in the House that attacked the Bridge to Nowhere, even though it was in a Republican district. The Chairman of the– the House Transportation Committee. And now it’s actually the bridges to nowhere will not be built.

DAVID GREGORY: All right. I want to come back to the debt in just a minute. But I want to talk about the number one issue, I think, which is jobs on the minds of every– unemployment is 9.9 percent in Illinois. And look at this chart– which is really a tale of woe in this country. You go back to 2009 in August. Since that point, unemployment has been at 9.5 percent or higher. That’s 14 straight months. Congressman Kirk, I’ll start with you. What do you at this point, as the federal government, to spur private sector job creation.

REP. MARK KIRK: First of all, we recognize that the stimulus has largely failed. A very small part of it even went to infrastructure development projects. It didn’t answer the question, “What happens when all the borrowed money runs out?” Secondly, this Congress has been very, very viciously anti-business. New taxes, new regulation. We need– Senators and Congressmen that will pass a pro-growth agenda.

For example, my small business bill of rights. Ten new policies to help out the number one employers in Illinois and the United States, small business. Half of all the jobs. 80 percent of the job losses in the Great Recession. They can’t afford a Washington lobbyist to go find stimulus money. Or a Washington lawyer to wade through the latest 1,000-page bill that Congressional leaders haven’t even read.

DAVID GREGORY: So, tax– tax relief. Tax cuts, in your mind, is really the job creation?

REP. MARK KIRK: A pro-growth agenda. Like making sure we don’t pass legislation to take away your right to a secret ballot in a union election. My opponent wants to take that right away, called the Card Check Bill. I think that’s a terrible idea.

DAVID GREGORY: All right, Mr. Giannoulias, how do you answer the question?

ALEXI GIANNOULIAS: I think one of the prob–

DAVID GREGORY: Job creation?

ALEXI GIANNOULIAS: I think one of the problems, quite frankly, is we have typical Washington, D.C. politicians, who have forgotten– what it’s like on Main Street. I’m the only candidate in this race who’s worked in the private sector. Congressman Kirk has been in Washington, D.C. for 20 years. If you’re thrilled with out of control– spending, the out of control borrowing that has become the Washington, D.C. ethos, then– Congressman Kirk is your man. I think– what we have–

DAVID GREGORY: My question is, what do you do to create private sector jobs to put people back to work? What you just said doesn’t put anybody back to work. And that’s what people are wondering.

ALEXI GIANNOULIAS: So, we’ve done in– in the State Treasurer’s Office, for example– low-interest loan programs, increasing access to capital. One of the biggest problems out there, that I hear from– my friends in the business community, is that there’s no lending. That it’s tough to get a loan. That even if you have– a line of credit, it’s being capped.

So, one focus the first things that we need to do is find ways to increase liquidity, to increase access to capital, to make sure that $1.8– trillion– that is sitting on the sidelines in the banking system, which can be leveraged to at least $18 trillion, we need to– do everything we can to focus on that. We need to focus on– on green jobs. Solar, wind, geothermal, biomass. There’s so many opportunities, but other countries like China are getting ahead of the curve.

DAVID GREGORY: The– the government did do a lot with the stimulus, right? You had actually said that the stimulus was not big enough? You’ve also said you’re gonna lead a progressive caucus, if you’re the Senator from Illinois. Will you push the Administration, if elected, to enact more stimulus? To spend more money to try to get people back to work?

ALEXI GIANNOULIAS: If– if more stimulus means more tax cuts to small businesses. If– if– more stimulus means middleclass tax cuts, then I’m for it. I will tell you that– we also have to keep in mind what the Recovery Act really did. The start of it was tax cuts to middleclass families. A third of it was emergency measure to– emergency funding to– states and municipalities, something that I’ve seen as State Treasurer–

DAVID GREGORY: But do you acknowledge it hasn’t done the trick? I mean, 14 months of unemployment. They said it would– if you passed stimulus, unemployment would get to 8.6– eight percent, 9.5 percent for 14 straight months?

ALEXI GIANNOULIAS: I think– David, the bigger question is what would have happened– I mean, it wasn’t– flawlessly done. But if– if you take a look at– what would have happened, I mean, do we need to see soup lines– down the street to figure out what would have happened? We avoided, and all economists will tell you, millions of jobs were saved because of the re– Recovery Act. And we avoided a second Great Depression. That– that is– a reality.

DAVID GREGORY: All right, let me have you two engage on the big tax debate here. Congressman, do you think that the Bush Era tax cuts should be extended for all Americans?

REP. MARK KIRK: Like CNN just said in a survey of– economists saying that– they should not have a new big tax increase on December 31st. If you look what Congressional leaders want to do, they want to hit the U.S. economy with a $900 billion tax c– increase on December 31st. On top of the ten new taxes that were in the health care bill. On top of the taxes that were in financial regulation. On top of the taxes that were in the August Congressional legislation. I don’t think– the– the key danger here is will our policies increase the chance of a double dip recession?

If you look at the job numbers just last week, we have a significant danger of that. And taking more money out of the private economy and having the government– perform, as it has poorly done with the stimulus, I don’t think is the right way to go.

DAVID GREGORY: But it’s interesting you say that. You said just a moment ago, if I heard you right, that you’re a– deficit hawk.

REP. MARK KIRK: That’s right.

DAVID GREGORY: Fiscal hawk. Well, back in 2004, you were– part of this Republican Main Street partnership. And as part of that group, you had a press release on 2004. I’m gonna put some of it up on the screen. “Today, the Republican Main Street Partnership, the largest organization of elected moderate Republicans in the nation offered six principles for the fiscal year ’05 budget resolution that were designed to put Congress on a path toward a balanced budget.

“These principles,” you said then, “stand for a key value that once we adopt the budget, we must have the tools to stick to it,” said Congressman Mark Kirk. Now, here was a key part of that. “Tax cuts should only be extended tem– temporarily and limited to those that are due to expire in 2004.” Key point, “We simply can’t afford permanent and across the board extensions, at this time.” That’s what you said then. When the– when the debt was about one third of what it was today. Congressman, how can we afford to make permanent tax extensions now, the Bush tax cuts, in this climate?

MARK KIRK: Because especially in this climate, we have Congressional leaders that are not interested in spending restraint at all. For example, I back– spending restraint across the board. At the D.O.D. like no second engine for the F-35 fighter. Closing down– joint forces command. Across the board reductions.

When you look at the state of the economy right now, you have to set a priority. And my pr– top priority is the deficit of jobs and economic growth. And especially this perception that the United States could be falling behind especially Asian economies. If we go through all of the tax increases that Congressional leaders propose. And by the way, Congress is gonna come back right after the election in this lame duck session of Congress with a new round of spending in an omnibus appropriation bill. And new tax increases.

DAVID GREGORY: But the question– but the question, Mr. Giannoulias. Should tax cuts be paid for?

ALEXI GIANNOULIAS: And this– this is– why this race is so important. This is a fundamental public policy difference between myself and Congressman Kirk. He says he’s– a fiscal hawk. Look– the Congressman has told some real whoppers during this campaign, but that may be the biggest one of all. He voted for every single one of the Bush budgets, which doubled our national debt. He voted to increase his own pay six times. He voted for the bridge to nowhere twice.

He voted to raise the– debt ceiling four times. The list– goes on and on. So, Congressman, saying you’re a fiscal hawk– doesn’t necessarily make it true. And your voting record proves that it’s not true. The question is, for the Congressman, the $700 billion in tax cuts for the wealthiest Americans, we don’t have $700 billion. So, my question to the Congressman is which country do you plan on borrowing $700 billion from? The Saudis? China? We– we can’t afford it. And that’s one of the problems, quite frankly, with Washington, D.C. This over-borrowing, over-spending.

DAVID GREGORY: So, Congressman, respond to that. Republican leaders, as you know, have said that tax cuts don’t have to be paid for. And the President said, “Look, there’s $700 billion they want to extend. Where are they gonna get the money?”

REP. MARK KIRK: We’re gonna get the money by spending reductions across the board. By cutting out whole programs and making sure that we have a– new set of mechanisms. For example, the President has been rumored to be brining forward a line-item veto proposal. Republicans should support that. We should have a new grace commission (?)– put forward with a base closing powers (?) to put a– joint bill to House and Senate with just one– up or down vote.

But it’s ironic for my opponent to credit my record on fiscal conservatism. In front of the Chicago Tribune they asked him, “Name one spending bill that you would actually vote to cut.” He couldn’t name one. And as the Chicago Tribune said when they endorsed me, it was painful to watch.

DAVID GREGORY: Well– speaking about painful, let’s pick up on that. Because I was gonna ask each of you, in this circumstance, what is a painful choice you would make to bring the b– the– the– budget into balance? A spending– a cut that you would make?

ALEXI GIANNOULIAS: Look, the– the– this country has– not lived within its means for a very long time. And– and the truth is, we’re gonna have to take our medicine. And what the deficit commission says in December’s gonna be important. To answer your question, and this is an area where I think the Congressman and I would agree. I would have voted– against the omnibus spending bill, which included thousands of earmarks, a lot of pork. And– and quite frankly, this is where the President made a mistake. He should– he should–

DAVID GREGORY: You know, every– everybody comes into Congress says, “We’re gonna cut out wasteful spending.” I mean, let’s be honest. Most of the spending is an– an explosion of entitlement spending. Social Security, Medicare, and– and a like. What would you do on some of these big runaway programs? Social Security? Would you look at– upping the retirement age in order to basically cut benefits and save some of that money?

ALEXI GIANNOULIAS: Again, we’re gonna have to take a look at what the deficit commission says and look at their ideas. I am personally not in favor of– of increasing the age limit. I do think we need to look at, on the revenue side– different options. Maybe– increasing the taxable wage base. Finding ways to get more revenue. But I am all for strengthening Social Security, not diminishing it.

DAVID GREGORY: Congressman Kirk– if you were serious about cutting the deficit and cutting spending, why don’t you stand up beside Paul Ryan (PH), the Congressman from Wisconsin, who– who’s put forward some pretty Draconian cuts in entitlement spending like Social Security and Medicare? Do you stand with him and those cuts?

REP. MARK KIRK: I– I– first of all, we have a whole– we need a whole range of cuts. For example–

DAVID GREGORY: But no, my question is, do– do you stand with him and some of his suggested cuts to Medicare?

REP. MARK KIRK: I– I– I have my own cuts, which I want to put forward. We should, for example, sell off big parts of the Tennessee Valley Authority, the Southeastern Power Administration. We should consolidate Depot (?) M– Maintenance at the Department of Defense. We should have– lawsuit reform, which C.B.O. says would– save at least the federal government $54 billion. I could go on and on beyond the F-35 engine and the earmark spending, which is–

DAVID GREGORY: Do you go beyond the Republican pledge, which is to go back to 2008 discretionary spending levels?

REP. MARK KIRK: I think we need a radical reduction in spending, because–

DAVID GREGORY: Beyond 2008 levels?

REP. MARK KIRK: Oh, 2008 is a great start. And, you know, this Congress has–

DAVID GREGORY: But you recognize, 2008, that’s in the pledge, isn’t nearly enough to deal with the size of this deficit, right?

REP. MARK KIRK: But I will tell you one thing that’s missing from this whole debate is no effort to put forward pro-growth policies. If the United States launches on a plan, as my opponent’s policies would do, to be a very high tax, high spending, high regulation economy, like many European economies. Then we– inevitably have this slow growth and high unemployment of those economies. That’s not the American way. The American way is– a limited government and lower taxes.

And a very robust– small business sector, which is especially employing– low income and minority kids, coming into the American Dream. I very much worry right now that if we’re embracing a European style, very high-debt, very high tax environment, we will suffer all of the slow growth problems that they’ve had.

DAVID GREGORY: One– one more policy issue quickly between you, health care. Congressman, you have said that you would lead the charge to repeal health care reform as passed by this Congress. Is that still your position?

REP. MARK KIRK: That’s right. When I came back to– to the United States, I met with the Republican leader and said, “We have to be the party of better. We just can’t it’s the party of no.” So, we put together– the Republican alternative, which I introduced in the Congress. 400 pages. It was not allowed for a debate or even discussion or a vote. But it did three big things.

First, the medical rights act. Says Congress should make no law interfering with decisions you’ve made with your doctor. Second, lawsuit reform, which was completely skipped and needs to be in there. And third, Congress should defend your right to buy health insurance from any state in the union, if you find a plan less expensive to cover your family.

DAVID GREGORY: All right, but– you– you will try to repeal it?

REP. MARK KIRK: Yeah, but let’s–


REP. MARK KIRK: Let’s look at the health care bill we passed. $500 billion in cuts for senior– for seniors, who depend on Medicare. Another ten new taxes that hit the economy. And a perverse incentive. You know, what is the essence of the health care bill? In 30 seconds? It says that if you employ 50 Americans or more, you must offer health insurance to the employees comma, or pay a $2,000 fine. But health insurance in America, many times, costs more than $2,000, giving a perverse incentive for these employers in 2014 to drop coverage.

DAVID GREGORY: Mr. Giannoulias, what is your– are you running on health care reform? Is that something that you will stand by, as passed by the Congress?

ALEXI GIANNOULIAS: I am running on jobs. I am running on helping small businesses. And look, the health care bill– was far from a perfect vehicle. That being said, I think it did some important things that the Congressman wants to repeal. The denial of coverage for preexisting conditions. Making sure that kids– in between college and their first job– have health care. And I think morally– we shouldn’t have 51 million Americans without– affordable, basic health care.

The– the health care system as we have it right now, we spend over 17 percent of our G.D.P. on health care. It’s bankrupting our families. It’s bankrupting small businesses. It’s bankrupting– this country. And, you know, the Congressman’s got the talking points of– of $500 million in Medicare cuts. The truth is– you know, a lot of– Medicare expenditures are fraud, waste, and abuse. And what this does is create efficiencies– within Medicare, which is why the ARP and the AMA endorsed it.

But again, there– there’s a lot that needs to be done. I would have loved to have seen– a provision there to let the Secretary of Health and Human Services negotiate bulk drug rates for Medicare, the way that the VA does. So, again, there are some missed opportunities in the implementation of (UNINTEL PHRASE).

REP. MARK KIRK: (UNINTEL) by the way, coverage of preexisting conditions was in our bill. But when I’ve looked– I’ve traveled throughout Illinois, talking to the top hospital systems. And they will talk about these Medicare cuts as representing between a $30 and $100 million cut per hospital, across Illinois, leading them to cancel capital expansion plans. Hiring freezes. Cuts. So, the– the effect of the cuts of your legislation are already being felt by State of Illinois health care (UNINTEL).

ALEXI GIANNOULIAS: The difference is he wants to repeal it, I want to reform it and fix it and make sure that it works for small businesses and for families.

DAVID GREGORY: Let me move on to some of the personal aspects of this race. It’s been pretty nasty. Negative tone by both of you. Here was a poll in the Chicago Tribune– W.G.N. Who do you consider more trustworthy or honest? 35 Giannoulias, 30 percent Kirk, 16 percent neither. Can’t be a figure that either one of you are proud of. I– I want to go through some of the issues that have cropped up about both sides, and allow you guys to– to talk through it. Mr. Giannoulias, let me start with you. Back in 2006, you were running for State Treasurer. This was part of an ad that you put on the air, touting your record.

GIANNOULIAS AD: People out there in Illinois need our help. Alexi Giannoulias, financial expert, businessman, banker. A State Treasurer’s Office is a fiscal office. It’s the state’s banker. Let’s get someone in there who’s protecting people’s money.

DAVID GREGORY: Financial expert, businessman, banker. Your family bank, the Broadway Bank, was seized by regulators. It went under. You released a statement– earlier this year. Creating some distance from the bank and when it was closed. And let me put the statement on– the screen. “It was because my father instilled in his sons the importance of helping others that I decided to leave the bank in 2005.” And that’s the key date here. 2005. “To pursue public service. At the time I left, according to every independent analysis, the bank was one of the best performing in Illinois.”

Now, the Chicago Tribune summarized– some of the issues that are– at stake here. Under this headline. “Giannoulias still worked at family’s bank in ’06. Candidate tells voters he left by late 2005. Giannoulias tells voters he was gone from his troubled family bank by late 2005, but that’s not what he told the IRS. Giannoulias was able to take a $2.7 million tax deduction last year, because he reported working hundreds of hours at Broadway Bank in 2006. He says there’s no contradiction, the issue highlights the fine line Giannoulias walked on the campaign trail in explaining exactly what he did at Broadway and when he did it.

“In this tight Senate race, the tenure as a senior loan officer at Broadway is a bull’s eye for critics, who hit him for the bank’s loans to mob figures, as well as troubled money that contributed to Broadway’s collapse earlier this year. Saying he left in ’05 gives Giannoulias maximum distance from the bank’s questionable lending practices. The able takeover by federal regulators and other controversies such as a loan by the bank to convicted influence– (UNINTEL) early 2006.

“But by reporting that he worked at least 500 hours at Broadway in 2006, Giannoulias was able to get a break that helped him avoid paying federal income tax in 2009.” Can you clear this up? Which is it? When did you leave? And did you get a tax break you shouldn’t have?

ALEXI GIANNOULIAS: Sure. There are– there have been no inconsistencies in anything I’ve said. I left day to day operations in ’05 and fully left the bank in– in 2006. Paid million dollar– paid millions of dollars in taxes over the last– five years. But this is not what people are talking about, David. And when I– when you bring up– the bank, you know, my father came into this country as an immigrant. He started a community bank 30 years ago. This was not some fly by night company. It was his whole life. It was his whole lega– legacy.

And he’s helped thousands of people, thousands of people achieve the American Dream. But because of this devastating recession, we’ve seen more community banks go under– than ever before. Another– almost 1,000 community banks are on the watch list. And you know what? While I’m very fortunate and my family’s very fortunate, I know what it’s like to lose a family business because of this– because of this recession.

DAVID GREGORY: But let’s– let’s get to the substantive point. Why did you say that you left in 2005, but you still told the IRS that you were there working in 2006 in order to get the tax break?

ALEXI GIANNOULIAS: David, nothing– I said has been inconsistent. I said I left day to day operations in 2005 and I–

DAVID GREGORY: But you did work there in 2006?

ALEXI GIANNOULIAS: Exactly. As I– as I’ve always said. Nothing– nothing is inconsistent. And I make my tax returns– public. Unlike the Congressman, I make my tax returns public. Everyone can see– what I pay in taxes. I paid my State Treasurer’s salary in taxes. I’m getting a refund, because of– a widely known– business– business– failure. And– I’m giving that money to charity.

DAVID GREGORY: Were you aware of some of the– the loan activity to– to criminal figures?

ALEXI GIANNOULIAS: Look– the way– a community bank– does business. I know when you run for office, these stories get sensationalized. When a bank decides who– who to give a loan to, they look at the credit worthiness of the borrower. They look at the credit score of the borrower. They look at the appraisal– value of a property. So, any– any bank, of course, there are some– individuals that– with colorful past that we (UNINTEL) do business with. But that doesn’t represent the thousands of people–

DAVID GREGORY: But my question, Mr. Giannoulias, were you aware that there were crime figures who were getting loans by your bank? You were a loan officer there.

ALEXI GIANNOULIAS: As I– as I continue to mention, as I continue to say, if I knew– now what I know– if I knew then what I know now, these aren’t the kind of people that– we do business with. But that’s not how banks work.

DAVID GREGORY: You’re saying you didn’t know? You didn’t know? I mean, that’s– that’s the easy question. Did you know that they were crime figures that your bank was loaning money to?

ALEXI GIANNOULIAS: As I’ve said, I didn’t– we didn’t know the extent– of that activity. But again, if you look–

DAVID GREGORY: (UNINTEL) by knew that they had– that they were–

ALEXI GIANNOULIAS: If you look at– if you look at any bank, an even bigger bank, you’re gonna find hundreds of individuals–

DAVID GREGORY: But that’s not what I’m asking. Mr. Giannoulias, did you know that they were crime figures that you were loaning money to?

ALEXI GIANNOULIAS: I didn’t know the extent of their activities.

DAVID GREGORY: You didn’t know the extent of it. Well, this is what you said, Congressman Kirk, about all of this. In– your ads and– and something you said on television– to Fox News in February. “Well, it appears that the Broadway Bank, which is the Giannoulias Family bank, has extensive ties to the mob, to convicted felons.” And you ran this as a portion of the ad that you’re running with the– Senate Committee, Republican Committee.

KIRK AD: Alexi Giannoulias. He’d make Tony Soprano crowd.

DAVID GREGORY: Are you saying that he has ties to organized crime?

REP. MARK KIRK: This is a list of– all the– bank loans to convicted mobsters and felons. The ones in yellow are the ones where he was the senior loan officer of the bank. People like– Michael “Jaws” Jorango (PH). Demetrius Devoropolos (PH). Boris Stratievsky (PH). These are all infamous– mob figures and bankers, who have– very long and storied records. And you don’t have to pull their rap sheets. It was in the Chicago Tribune.

GIANNOULIAS: Again, this is– the Congressman who’s never worked in the private sector. Doesn’t know that– what it takes– what a bank does, when they look at– whether or not to– approve or deny a loan. So, he pulls– some names and he tries to make it– a political– attack. People aren’t buying it. That’s why we’re up in the polls. But this is what’s wrong with politics. Someone like Congressman Kirk, who has no idea– what it’s like in the private sector. To go out there and say these are convicted– mobsters. That’s not– those aren’t the kind of people that–

DAVID GREGORY: But (UNINTEL PHRASE) campaign, but do you really stand by all those ads? Saying that he has con– I mean, he’s sitting right here. Does he have connections to organized crime, in your judgment? Or was there bad judgment made by the bank?

REP. MARK KIRK: The Broadway Bank provided an extraordinary amount of loan capital, totaled millions of dollars– to mob victims and convicted felons, after they had been convicted. And– and that’s absolutely the bus– you know, I was in the private sector. I did work. But I’ll tell you the private sector experience that I don’t have. I don’t have experience in– in loaning– money to mob figures. I don’t have– experience in– reckless loans to– a commercial real estate and– brokered hot money deposits leading to a collapse in the bank. The New York Times analysis of– Treasurer Giannoulias’ work at the bank, showed that it was his decisions that helped lead to this collapse.

ALEXI GIANNOULIAS: That’s not true.

REP. MARK KIRK: Transferring a $390 million bill–

DAVID GREGORY: All right, let me give you the final word here and then we’re gonna take a break.

ALEXI GIANNOULIAS: Again, we shouldn’t be surprised that the Congressman– is lying again. If you look at the loans that– were passed through when the bank was taken over. Like thousands of– of community banks that are dealing with challenges. Less than nine percent of the loans were even around. So– it’s– it’s– a political war, I understand that. But for him to say that– to characterize my family– that way is– is misleading, it’s offensive, people aren’t buying it– and the Congressman wouldn’t know the difference, because he’s been in D.C. for 20 years.

DAVID GREGORY: All right. We’re– we’re gonna leave this issue here. We’re gonna take a break. There’s some credibility questions that have been raised about– some statements you’ve made, Congressman– in the course of the campaign. We’re gonna take a break here and come back and deal with those. Right more– back with more (UNINTEL) Senate debate after this brief commercial break.

DAVID GREGORY: We are back to continue our debate with the candidates battling to become the next U.S. Senator from Illinois, a seat once held by President Obama. Congressman Kirk, there have been some credibility issues raised on the campaign trail for you, as well. And it has to do with your military record. You hold the rank of Commander. You’re in the Naval– Reserve– as an intelligence officer. You served during the conflicts of Afghanistan, Iraq, Haiti, Bosnia. (UNINTEL) of the Navy and Marine Corps commendation– medal for Kosovo service in 1999.

All of which makes it curious some of the exaggerations in the course of the campaign trail. This is how the Associated Press summarizes it back in June. I’ll put it on the screen. “Kirk’s problems began with the revelation that his frequent references to being named the Navy’s intelligence officer of the year were false. Instead, a slightly different– award had gone to the intelligence unit that Kirk led, not to Kirk personally.

That was followed by a long string of other errors and exaggerations. A letter from his office said he served in the Gulf War, when he didn’t. The first Gulf War. He is also referred to serving in the Invasion of Iraq, although his duties kept him stateside. He said his reserve work sometimes includes running the Pentagon War Room, even though he oversees only the intelligence operations.

“Although he had clearly described coming under fire while flying missions over Kosovo and Iraq, Kirk began to hedge and say that he couldn’t be sure his plane was targeted by the antiaircraft fire. And he didn’t mention that he rode along on only a handful of flights, perhaps just three. Kirk’s campaign also denied he had ever improperly mingled political activity with his military duties, only to have the Pentagon confirm that he had done exactly that on two occasions.”

There was also an interview you gave the Chicago Sun Times during which that– you had come under fire, that you had been shot at while in Kandahar, only to have that account contradicted by your statements– something that was on your own website– earlier– in the year. So, my question is, given your own military record, why would you exaggerate these?

REP. MARK KIRK: Well, I– I– made mistakes with regard to my military misstatements. I was careless. And– and I learned a very painful and– humbling lesson. This is very important to me. I– in my– naval training as a naval officer, we are– trained to take command, to be responsible, to be accountable for our personnel– for our unit and our mission. And I am completely accountable for this. And so, I corrected the record–

DAVID GREGORY: But what– how do you– how does one get careless on that? And if you’ve served overseas, and you have, anybody who’s in combat is very clear on whether they were in combat or not. So, you know, if– if you’re a vote and you’re listening to this, should there not be some credibility test for you? Should that have some weight in whether you can be trusted, if you’re gonna exaggerate your military record? Something that sensitive?

REP. MARK KIRK: There certainly should be. And– and the level of scrutiny here is completely appropriate, because this is a very high office. For me, what I did is first– correct the record. Then apologize to the people of Illinois. Then I released– all 21 years of my officer fitness reports. These are my confidential personnel files to everyone so that they could read.

I’m very– proud of my record. I’ve served in Afghanistan, in Northern Watch and– Operation Allied Force. I believe in this country very greatly. And I would give my– life for it. I think it’s made me a better Congressman and a better–

DAVID GREGORY: So, bottom line, Congressman, did you say that you were once shot at, when in fact you were not?

REP. MARK KIRK: Well, for example– when you’re flying over Iraq as a big NATO strike package, usually the Iraqis opened up on us. But whether the squadron came under fire or not it’s a very confusing–

DAVID GREGORY: All right, Mr. Giannoulias, you’ve called him a liar in his ads. That’s a very serious charge. Do you accept his explanation?

ALEXI GIANNOULIAS: Well, again, that’s for the Congressman to explain to the voters of Illinois. But even more troubling than the– the untruths about his military correcord– record and his phantom teaching career. More troubling to me are his votes– in the– in Washington, D.C. Here’s someone where you don’t know he stands. The Chicago Sun Times pointed out on Friday, you don’t know where he stands on important issues.

Now, David, the people of Illinois may not always agree with everything I say, but they’ll always know where I stand. Congressman Kirk votes for cap and trade. He said he’s doing it for the national security interests of the United States. And then he runs as a Republican for the Senate and says he would never vote that way again, it was a huge mistake. They asked him his thoughts on– the Dream Act, Don’t Ask, Don’t Tell, he said he’s not sure yet.

I’ll tell you where I stand and that’s leadership. That’s what the People of Illinois want. That’s what I’ll give them for the rest of my career. And I think that is– a fundamental difference in principles and values and morals– between myself and the Congressman.

DAVID GREGORY: I want to close with this– thought. We’re in partnership with Facebook in their politics page. And we’ve solicited– a question– from Dmitri Morris (PH). And it’s interesting– Congressman Kirk, I’ll start with you on this. Name two issues in your party’s platform that you do not agree with and why.

REP. MARK KIRK: For example, I backed– stem cell research. I very much– support– hate crimes legislation. When it went through the House, it was the– Conyers/Kirk Bill (PH). I also supported– health insurance for low income kids through the S-CHIP Program (PH). Been rated as one of the most independent members of– Congress. A fiscal conservative, a social moderate.

DAVID GREGORY: Mr. Giannoulias? Two areas of the Democratic Party you don’t agree with. And where you’d buck your party.

ALEXI GIANNOULIAS: Well, as I mentioned– the way TARP was handled I think was an enormously–

DAVID GREGORY: The Republicans started that.

ALEXI GIANNOULIAS: We missed– missed– there’s a missed opportunity. I think– I would have loved to have seen– increased access to capital requirements on these banks, that they lend money out. When we fought and saved jobs at– at Hart Schafter Marks (PH). One of the things we did was go after Wells Fargo. We looked at them and said, “Listen, you can’t let this company– falter. You can’t let them fail.” And I– you know, the– the Congressman always uses the word independent, the truth is, the only thing he’s been independent of in this race is the truth.

This is an incredibly important race. We need some fresh leadership. We need some new ideas. We need to help create jobs. People in Illinois are getting crushed– crushed by this recession. Washington, D.C. isn’t working. And I– my question is why in the world would we send the same people who created this mess back to Washington, D.C.? That’s why the people of Illinois need– need some new ideas and some fresh voices.

DAVID GREGORY: The debate will continue. The campaign will continue in crunch time now. Good luck to both of you. And thank you for– sharing your views here with us– this morning on Meet The Press. We will be watching (MUSIC) closely, of course. And coming up here next, we will have our political roundtable. And talk about– some of the big issues that continue on the campaign trail. We’ll have more on the campaign trail next week. The Colorado Democratic Senator, Michael Bennett (PH)– will square off with Republican and Tea Party favorite Ken Buck (PH). That’s our Senate Debate series coming up next week here on Meet The Press.

And up next, the big picture in the midterm fight. New jobless numbers. Tight races across the nation. Another high-level Obama Administration departure. How will it all impact the campaigns? Our roundtable weighs in. Time Magazine’s Joe Klein (PH) and the Wall Street Journal’s Peggy Noonan after this brief station break.

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