Republicans are well positioned to do something extraordinary in November: Win the Senate seats vacated by a Democratic president and vice president in the next election cycle. In Delaware, Republican Mike Castle leads his opponent by approximately 20 points — game over, in all likelihood. In Illinois, things are getting interesting. Polls show a tight, volatile race between Republican congressman Mark Kirk and state treasurer Alexi Giannoulias, a Democrat. 

Kirk won the GOP primary handily despite vocal opposition from the conservative base over his left-leaning voting record on issues ranging from abortion to climate change. (He was one of the infamous eight Republicans to vote for cap-and-trade). Nevertheless, Kirk has a very real shot and winning the general election. During the health-care battle, he deftly attacked Obamacare at townhall meetings across the state, while offering a thoughtful alternative. He’s also admirably led the charge against the Democrats’ reckless and unpopular scheme to close Gitmo and relocate several hundred jihadists to northern Illinois. Kirk’s most valuable asset, however, may be his opponent.

Alexi Giannoulias is a young, exceedingly ambitious politician with extensive ties to the very worst elements of the sordid Illinois Democratic machine.  (With impeached/indicted former Governor Rod Blagojevich and convicted felon Tony Rezko in the mix, the TV commercials practically write themselves):

Friday’s Chicago Tribune featured an in-depth look into the financial troubles of Giannoulias’s family bank, including the role the candidate himself played in loaning $20 million to known members of organized crime:

The family bank of Democratic Senate candidate Alexi Giannoulias loaned a pair of Chicago crime figures about $20 million during a 14-month period when Giannoulias was a senior loan officer, according to a Tribune examination that provides new details about the bank’s relationship with the convicted felons.

Broadway Bank had already lent millions to Michael Giorango when he and a new business partner, Demitri Stavropoulos, came to the bank in mid-2004. Although both men were preparing to serve federal prison terms, the bank embarked on a series of loans to them.

Alexi Giannoulias took a senior position at the bank at about the same time and used it as a launching pad for his political career. But as he campaigns to step up from state treasurer to the U.S. Senate, he has tried to distance himself from the bank’s business with the pair and has been reluctant to detail his role.

This damaging bombshell isn’t entirely breaking news. David Freddoso has been on the case for years:

Giannoulias, whose family owns the Broadway Bank in Chicago, is an easy target on the ethics front. Here is what I wrote about his business dealings and his 2006 rise to statewide office in The Case Against Barack Obama:

Broadway had loaned millions of dollars to Michael “Jaws” Giorango, a convicted bookmaker and prostitution ring promoter. When asked about loans the bank had made to Giorango in the 1990s, Giannoulias said he had not been a full-time employee of the bank at that time.

Then the Chicago Tribune reported that in 2005, when Giannoulias was serving as vice president and senior loan officer at Broadway, the bank had made an $11.8 million loan to Giorango and that Giannoulias had even traveled to Miami to meet with Giorango and inspect a property the bank was financing for him. Of his original explanation, Giannoulias said, “It wasn’t an attempt to mislead.”

Even better: Giorango got one of his loans from Broadway in 2005 even though his co-signer was in prison at the time for possession of explosives and illegal bookmaking. (The man’s wife had to sign the papers for him.) Giorango wasn’t the only mob client at Broadway, either: The Chicago Sun-Times reported that Broadway had loaned more than $10 million to the Stratievsky family, alleged members of the Russian “New Mafiya.”

Incidentally, how did a certain good-government, transparency-advocating, hopey-changey presidential candidate react to this news about his hoops buddy?

After the press revealed that Giannoulias had basically lied about Giorango, Obama said he was “concerned,” but he didn’t actually do anything about it. Nor did he have any problems taking about $14,000 from Giannoulias, his family members, and at least one other manager at Broadway during his 2008 presidential campaign two years later.

It’s no secret that Illinois has been plagued by political corruption for generations. Despite Illinois being a solidly blue state, there’s a reasonable chance that its citizens simply won’t abide a dishonest mob banker representing them in the U.S. Senate. Stay tuned: Between the Democrats’ Chicago Way tactics and Giannoulias’s disreputable background, this race could get ugly. CORRECTION: This post originally identified Alexi Giannoulias as the former state treasurer of Illinois. He is the current treasurer.