Clout Finance

The CapFax Tuesday morning shorts had at least four Sun-Times stories about a clout connected northwest side bank. Here's the first one:

For years, James J. Banks, a nephew of Chicago's powerful Ald. William Banks (36th), has been the attorney of choice for developers who need the city's OK to knock down homes and small businesses and replace them with three- and four-story condo buildings.

Now, he's their money man of choice, too, financing projects through his 2-year-old bank.

Banks is chairman of the board of Belmont Bank & Trust Company, which he founded in his uncle's Northwest Side ward.

It is, truly, the bank of Banks:
• • His father, attorney Samuel V.P. Banks, sits on the bank board.
• • The bank's chief financial officer: his cousin Ronald J. Banks.
• • Among its customers: developers James Banks represents before the City Council Zoning Committee run by his uncle; employees of the bank and of Banks' real estate agency, and his family.

Of $155 million in loans the bank has made, nearly a third has gone to people connected to Banks.

One of Belmont Bank's favorite customers has been Banks' wife, Grace Sergio. She and her companies have gotten seven mortgages totalling $7.3 million, records show. Like many of the bank's customers, she used the money to develop condos marketed by Sergio & Banks, the real estate agency she co-owns with her husband.

Bart Przyjemski -- a partner with Sergio on some of those developments -- has gotten six other loans, totalling $12.2 million, from Belmont Bank. Przyjemski also has been a development partner of Banks and has been represented by him in zoning cases before the Zoning Committee headed by his uncle, who abstains from voting on his nephew's cases.

Government banking rules set limits on how much can be lent to one person or entity. They also set limits on how much can go to insiders -- bank officials and their immediate family.

This link will take you to a story that spells out the various deals involve Grace Sergio and her partner on some developments. Another story about who runs this bank, Belmont Bank & Trust. Also a story about an important member of the Illinois House of Representatives who claimed that he shopped around for a place to put down his campaign funds.

Now let's get back to the South Side here. Totally unrelated to the bank but certainly related to the idea of clout finance involving instead of the city of Chicago, but the county of Cook. From the Sun-Times again:

A collection of politically connected firms handpicked by Cook County President Todd Stroger's administration is set to reap the profits from fees associated with the sale of $364 million in bonds up for board consideration today.

Mesirow Financial, whose chairman, James Tyree, is chairman of the City Colleges of Chicago, was selected as the lead financial adviser on the sale of $260 million in self-insurance bonds.

Those bonds will be managed by a group of companies with strong local political ties
...
Donna Dunnings, Cook County's chief financial officer, said she didn't consider a firm's clout in her decisions.

"I looked at the firm's experience and expertise on certain bond issues. They have to have experience doing certain types of jobs," Dunnings said. "Political affiliations is not something I would ever look at. . . . These are not new players. These people have worked on [bond] deals previously."

Commissioner Forrest Claypool says the bond deal stinks. "It's a Christmas tree for politically connected lawyers and underwriters, including a manager indicted for bribery, the brother of Stroger's chief of staff, and big political donors," he said. "Stroger and the insiders will benefit, but taxpayers will be left holding the bag."

So there is a quick lesson on Clout Finance and this idea of insider deals to those who are connected to the right people!