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Transcript of Alexi Giannoulias-Mark Kirk Debate on NBC's 'Meet the Press'

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SPEAKERS: DAVID GREGORY, HOST

SENATORIAL CANDIDATE ALEXI GIANNOULIAS, D-ILL.

REP. MARK STEVEN KIRK, R-ILL.

OCTOBER 10, 2010

[*] 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 Sestak. But here in Washington, this morning, it's all eyes on the tight battle in Illinois.

(BEGIN VIDEO CLIP)

OBAMA: Hello, Chicago. It's good to be home.

GREGORY (voice-over): The fight is personal for the president.

OBAMA: 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.

GREGORY: Democratic State Treasurer 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 mid-term race, President Obama's former seat. For the GOP, it's the ultimate prize.
Mark Kirk, Alexi Giannoulias
CHUCK TODD, POLITICAL DIRECTOR, NBC NEWS: 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 a former Illinois senator now sitting in the Oval Office.

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 Rod Blagojevich ignored objections from Democratic leaders and appointed a former State Attorney General, Roland Burris 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 continue.

UNIDENTIFIED MALE: The Navy named Mark, Intelligence Officer of the Year.

Lynn Sweet: Illinois Senate Rivals Kirk, Giannoulias Spar Over Credibilty In First Debate

GREGORY: Kirk, a Navy Reserve has a list of erroneous or exaggerated claims about his military record including a 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.

LYNN SWEET, COLUMNIST, CHICAGO SUN TIMES: If all you're looking at is the negative side, you have a choice between a serial embellisher and a mob banker.

GREGORY: So how will Illinois voters decide and what will the outcome say about this mid-term campaign?

(END VIDEO CLIP)

GREGORY: And joining me now, Republican Congressman Mark Kirk and Illinois State Treasurer Democrat Alexi Giannoulias. Welcome to both of you, to our studio and to this debate, MEET THE PRESS style.

So there are no set rules. We're sitting around this table and we're going to have a conversation and we're going to 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 4, 2008 in Chicago when the president and his family appeared after he was then the president-elect and this is what he said.

(BEGIN VIDEO CLIP)

OBAMA: 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.

(END VIDEO CLIP)

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

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 and tax credit for small business, and payroll tax holiday for low to moderate income workers, doing everything we can to get that $1.5 trillion that's quite frankly sitting on the sidelines in the private sector, encouraging and promoting --

(CROSSTALK)

GREGORY: But the country is better off in this economic recession because of the change that President Obama brought?

GIANNOULIAS: I think if you look at what would have happened if some of the measures weren't taken -- and again, they weren't -- they weren't perfect.

For example, I think, when you look at TARP, for the bailout to the biggest banks, something that Congressman Kirk voted for, I think, I would have liked to have seen, as a -- as a former community banker, some more oversights, some more accountability 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 -- a missed opportunity.

GREGORY: Congressman Kirk, you had said at a rally back in March, a GOP rally that Obama -- that we -- we -- 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 has brought to America?

KIRK: A tremendous amount of debt. I've got a chart here that shows our debt to GDP 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 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.

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?

KIRK: No. I've become very much of a fiscal hawk here, I -- I forswore for earmarks for 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 House Transportation Committee and now it's actually the bridges to nowhere, will not be built.

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 do at this point, as the federal government, to spurt job creation?

KIRK: First of all, we recognized that the stimulus has largely failed. The 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 regulations. We need senators and congressmen that will back up 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 of 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.

GREGORY: So tax -- tax relief, tax cuts in your mind is really the job creation?

KIRK: Well, 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.

GREGORY: All right Mr. Giannoulias, how do you answer the question to job creation?

GIANNOULIAS: I think one of the problems -- 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 has 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 --

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

GIANNOULIAS: So we've done in the State Treasurer's office for example. Long interest loan programs, increasing access to capital one; the biggest problems that are out there that I hear from my friends in the business community is that there is no lending, that is tough to get a loan there. Even if you have a line of credit it's being (INAUDIBLE), so one of the first things that we need to do is to find ways to increase liquidity and to increase access to capital and 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, bio-mass. There are so many opportunities but other countries like China are getting ahead of the curve.

GREGORY: The -- the government did do a lot with the stimulus, right? You had actually said that the stimulus was not big enough. And you've also said you're going to 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?

GIANNOULIAS: If -- if more stimulus means more tax cuts to small businesses, if -- more stimulus means middle-class 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. A third of it was tax cuts to middle-class families, a third of it was emergency measure to -- emergency funding to states and municipalities, it's something that I've seen as state treasurer --

GREGORY: But do you acknowledge it hasn't done the trick? I mean, 14 months of unemployment. They said that if -- if you pass stimulus unemployment will get to eight percent, 9.5 percent for 14 straight months.

GIANNOULIAS: I think, David, the bigger question is what would have happened -- and 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 avoid it? And all of the economist will tell you that millions of jobs were saved because of the Recovery Act. And we avoided a second Great Depression. That -- that is a reality.

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?

KIRK: Right. Like CNN just did 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 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 bill, on top of the tax 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, it's the right way to go.

GREGORY: Well, it's interesting you say that. And you said just a moment ago, if I heard you right, that you're a -- a deficit hawk.

KIRK: That's right.

GREGORY: A 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 going to 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 2005 budget resolution that are 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 is a key part to that. "Tax cuts should only be extended 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.

KIRK: Right.

GREGORY: When the -- when the debt was about one-third of what it was today. Congressman, how could we afford to make permanent tax extensions now, with the Bush tax cuts in this climate?

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 DOD 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 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 proposed -- and by the way, Congress is going to come back right after the election in this lame duck session of Congress --

GREGORY: Yes.

KIRK: -- with a new round of spending in an Omnibus Appropriation Bill and new tax increases.

GREGORY: But the question -- but the question is, Mr. Giannoulias, should tax cuts be paid for?

GIANNOULIAS: And this -- this is why this race is so important. This is a fundamental public policy difference between myself and Congressman Kirk.

He said 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 that 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 and over spending. GREGORY: Well, Congressman, respond to that. As Republican leaders as you know have said that tax cuts don't have to be paid for, and the president says look there's $700 billion they want to extend. Where are they going to get the money?

KIRK: We're going to 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 bringing forward a line item veto proposal. Republicans should support that. We should have a new Grace Commission put forward with base-closing powers to put a joint bill to the House and Senate with just one or up-or-down vote.

But it's ironic for my opponent to criticize 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. As the "Chicago Tribune" said when they endorsed me, it was painful to watch.

GREGORY: Well, speaking of painful. Let's pick up on that because I was going to ask each of you in this circumstance. What is the painful choice you would make to bring the budget into balance? A spending cut that you would make.

GIANNOULIAS: This country has not lived within its means for a very long time and the truth is we're going to have to take our medicine. And what the deficit commission says in December is going to 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 and a lot of pork. And quite frankly, this is where the president made a mistake. He should have --

GREGORY: You know, everybody who comes into congress says we're going to cut out wasteful spending. I mean let's be honest. Most of the spending is an explosion of entitlement spending, social security, Medicare and the 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?

GIANNOULIAS: Again, we're going to have to take a look at what the deficit commission says and look at their ideas. I'm personally not in favor of increasing the age limit. I do think we need to look on the revenue side different options, maybe increasing the taxable wage base, finding ways to get more revenue, but I'm all for strengthening social security, not diminishing it.

GREGORY: Congressman Kirk, if you were serious about cutting the deficit and cutting spending, why don't you stand up beside Paul Ryan, the congressman from Wisconsin who has put forward some pretty draconian cuts in entitlement spending like social security and Medicare? Do you stand with him in those cuts?

KIRK: First of all we have a whole -- we need a whole range of cuts.

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

KIRK: 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 (ph) maintenance at the Department of Defense. We should have a lawsuit reform which CBO 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 --

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

KIRK: I think we need a radical reduction in spending because --

GREGORY: Beyond the 2008 level?

KIRK: 2008 that's a great start. You know, this Congress hasn't --

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

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-tech, high-spending, high-regulation economy like many European economies then we inevitably have the 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 should suffer all of the slow growth problems that they've had.

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

KIRK: That's right. When I came back to the United States I met with the Republican leader and said we have to be the party of better. We just can't be the party of no. So we put together the Republican alternative which I introduced into Congress, 400 pages. It was not allowed for a debate, or even discussion or a vote.

But it did three big things: first, medical rights act that says Congress should make no law interfering with the decisions you 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 the plan less expensive to cover your families.

GREGORY: All right. But you will try to repeal it?

KIRK: Yes but then -- let's look at the health care bill we passed, $500 billion in cuts for seniors, who depend on Medicare, another ten new taxes that hit the economy and a perverse incentive.

What is the essence of health care bill in 30 seconds? It says that if you employ 50 Americans or more, you must offer health insurance to the employees, 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.

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?

GIANNOULIAS: I am running on jobs. I am running on helping small businesses. 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 pre- existing 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 health care system as we have it right now, we spend over 17 percent of our GDP on health care. It's bankrupting our families. It's bankrupting small businesses and bankrupting this country.

The Congressman has the talking points of $500 million in Medicare cuts. The truth is a lot of Medicare expenditures are fraud, waste and abuse and what this does is create efficiencies within Medicare, which is why the AARP and the AMA endorsed it.

But again, there's a lot more to be done. I would have loved to have seen a provision there to let the Secretary of Health and Human Services negotiate both drug rates for Medicare the way that the VA does. So again, there's missed opportunities in the implementation of --

(CROSSTALK)

KIRK: By the way, coverage of pre-existing 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 million and $100 million cut per hospital across Illinois, leaving them to cancel capital expansion plans, hiring freezes, cuts.

So that the effect of the cuts of your legislation are already being felt by the State of Illinois health care. 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 their families.

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", WGN. 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 want to go through some of the issues and (INAUDIBLE) on both sides on why you're the guys to talk them.

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.

(BEGIN VIDEO CLIP)

GIANNOULIAS: People out there in Illinois need our help.

UNIDENTIFIED FEMALE: Alexi Giannoulias, financial expert, businessman, banker.

GIANNOULIAS: The State Treasurer's office is a fiscal office. It's the state's banker. Let's get someone in there to protect the people's money.

(END VIDEO CLIP)

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. Let me put the statement on the screen.

"It was because my father instilled in his son 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.

"The Chicago Tribune" summarized some of the issues that are at stake here. Under this headline, "Giannoulias still worked at family's bank in 2006. 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 bulls' eye who hit them for the bank's loans to mob figures as well as troubled lending that contributed to Broadways' collapse earlier this year.

Saying he left in 2005 gives Giannoulias maximum distance from the bank's questionable lending practices, the April takeover by federal regulators and other controversies such as a loan by the bank to convicted influence peddler Tony Rezko in 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?

GIANNOULIAS: Sure. There are -- there have been no inconsistencies in anything I've said. I left day-to-day operations in '05 and I fully left the bank in 2006, paid millions of dollars in taxes over the last five years.

But this is not what people are talking about, David. When you bring up the bank, my father came to this country as an immigrant; he started a community bank 30 years ago. This was not a fly-by-night company; it was his whole life. It was his whole legacy and he has 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 thousand community banks are on the watch list and, you know what? While I'm very fortunate and my family is very fortunate, I know what it's like to lose a family business because of this recession.

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

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

GREGORY: But you did work there in 2006?

GIANNOULIAS: Exactly -- as I always said. 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 failure and I'm giving that money to charity.

GREGORY: Were you aware of some of the loan activities to criminal figures?

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 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 bank -- of course, there are some individuals that -- with colorful pasts that we don't even want to do business with, but that doesn't represent the thousands of people --

GREGORY: My question, Mr. Giannoulias, were you aware that there were crime figures getting loans from your bank? You were a loan officer there.

GIANNOULIAS: 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 are not the kind of people that we do business with. But that's not --

(CROSSTALK)

GREGORY: You're saying you didn't know? You didn't know. That's the easy question. Did you know that they were crime figures that your bank was loaning money to?

GIANNOULIAS: As I've said, we didn't know the extent of that activity. But again, if you look at --

GREGORY: But you knew that they were --

GIANNOULIAS: If you look at any bank, an even bigger bank, you're going to find hundreds of individuals.

GREGORY: That's not what I'm asking. Did you know that they were crime figures that you were loaning to?

GIANNOULIAS: I didn't know the extent of their activity.

GREGORY: Don't know the extent -- this is what you said to Congressman Kirk about all of this. In your ads 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 is a portion of the ad that you're running with the Senate committee -- Republican committee.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Alexi Giannoulias, he'd make Tony Soprano proud.

(END VIDEO CLIP)

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

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" Giorango, Demitri Stavropoulos, Boris Stratievsky; these are all infamous mob figures and bankers who have very long and storied record. You don't have to pull their rap sheet. It was in the "Chicago Tribune".

GIANNOULIAS: Again, this is -- the congressman, who has never worked in the private sector, doesn't know what it takes -- what a bank does when they look at whether or not to approve or deny a loan. 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.

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. Those are not the kind of people that --

GREGORY: But you know, we're on the top (ph) of the campaign -- do you really stand by all those ads? Saying that he has (INAUDIBLE) -- he's sitting right here. Does he have connections to organized crime, in your judgment, or was there bad judgment made by the bank?

KIRK: The Broadway Bank provided an extraordinary amount of loan capital to millions of dollars to mob figures and convicted felons after they had been convicted and that's absolutely the -- I was in the private sector. I did work.

I'll tell you the private sector experience that I don't have. I don't have experience in loaning money to mob figures. I don't have experience in reckless loans to commercial real estate and brokered hot money deposits leading to a collapse of 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, transferring a $390 million bill.

(CROSSTALK)

GREGORY: All right. Let me give you the final word here and then we're going to take a break.

GIANNOULIAS: Again, we shouldn't be surprised that the Congressman is lying again. If you look at the loans that were past due and the bank was taken over, like thousands of community banks that are dealing with challenges, less than 9 percent of the loans or -- it's a political war, I understand that.

But for him to say that -- to characterize my family that way is misleading, it's offensive. People aren't buying it. The congressman wouldn't know the difference because he has been in D.C. for 20 years.

GREGORY: All right. We're going to leave this issue here. We're going to take a break. There are some credibility questions that have been raised about some statements you've made, Congressman, in the course of the campaign.

We're going to take a break here and come back and deal with those; right back with more of our Illinois senate debate after this brief commercial break.

(COMMERCIAL BREAK)

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. You were awarded 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 has 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 anti-aircraft 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 to 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 that -- 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?

KIRK: Well, I -- I made mistakes with regard to my military misstatements. I was careless and I learned a very painful and humbling lesson. This is very important to me. 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.

GREGORY: But, well, how -- how does one get careless on that?

I mean, 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 you're a voter 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 going to exaggerate your military record, something that sensitive.

KIRK: There certainly should be. 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...

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

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...

GREGORY: All right.

Mr. Giannoulias, you've called him a liar, in his ads. I mean, that's a very serious charge. Do you accept his explanation?

GIANNOULIAS: Well, again, that's for the congressman to explain to the voters of Illinois. But even more troubling than the untruths about his military record -- record and his phantom teaching career -- more troubling to me are his votes in the -- in Washington, D.C.

Here's someone who you don't know where he stands. The Chicago Sun-Times pointed out 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.

GREGORY: I want to close with this thought. We are in partnership with Facebook and their politics page, and we've solicited a question from Dmitri Morris. And it's interesting. I'll -- 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. 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. I also supported health insurance for low- income kids through the SCHIP program, been rated as one of the most independent members of Congress, a fiscal conservative, a social moderate.

GREGORY: Mr. Giannoulias, two areas of the Democratic Party you don't agree with, where you'd buck your party?

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

GREGORY: But the Republicans started that.

GIANNOULIAS: We missed -- it was 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 Hart Schaffner Marx, 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, you know, the -- the congressman always uses the word "independent." The truth is the only thing he has 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 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 some new ideas and some fresh voices.

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'll be watching 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 from the campaign trail next week. The Colorado Democratic Senator Michael Bennet will square off with the Republican and Tea Party favorite Ken Buck. That's our Senate debate series coming up next week here on "Meet the Press."


END

Oct 10, 2010 12:23 ET
Source: CQ Transcriptions
© 2010, Congressional Quarterly Inc., All Rights Reserved
Filed Under: Senate

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