If This Becomes the Face of the Democratic Party, Say Goodbye to the Democratic Party

03/30/2010 05:12 am ET | Updated May 25, 2011

Illinois' U.S. Senate Democratic primary is coming up in less than a week, and it poses a potentially enormous problem for the Democratic Party, in Illinois and therefore nationally. That "therefore" is important: Because President Obama is from Illinois, and because Republicans have invested so much time and resources trying to nationalize the concept of the corrupt "Chicago politician," whoever ends up the Democratic nominee for Obama's old seat will likely be made by the GOP into a face of the Democratic Party as a whole.

That's why the candidacy of Illinois Treasurer Alexi Giannoulias is so problematic. Holding a slight lead in the polls against other Democratic challengers, he has become a poster child for everything that is wrong with the American economy -- everything that the Republican Party's right-wing populism desperately needs to find traction. Here's what I mean:

Broadway Bank, the troubled Chicago lender owned by the family of Illinois Treasurer and U.S. Senate candidate Alexi Giannoulias, has entered into a consent order with banking regulators requiring it to raise tens of millions in capital, stop paying dividends to the family without regulatory approval, and hire an outside party to evaluate the bank's senior management.

The Jan. 26 consent order with the Federal Deposit Insurance Corp. and the Illinois Division of Banking comes less than a week before Mr. Giannoulias -- Broadway's chief lender and then vice-president from 2002 to 2006 -- must face voters in the Democratic primary for the Senate seat previously held by President Barack Obama.

He's faced criticism, principally from former city Inspector General David Hoffman, who's running against him, for his past role at the bank and the $70 million in dividends the family took out of the bank in 2007 and 2008 as the real estate crisis was becoming apparent.

Bloomberg News shows just how mortally dangerous to the Democratic Party Giannoulias would be if he wins the nomination:

Banking Past Haunts Obama Friend Who Wants His Old Senate Seat

"Bankers don't need another vote in the United States Senate -- they've got plenty," Obama said Jan. 17 in Boston, signaling a broader strategy to tie Republicans to Wall Street greed.

In the (Illinois) race to fill Obama's old Senate seat, the banker in question is a Democrat, Alexi Giannoulias, a presidential friend whose family's bank once held deposits for an Obama campaign committee...

Giannoulias, 33, a former senior loan officer and bank vice president, now serves as treasurer of Illinois...Giannoulias said he now owns 3.6 percent of the bank...

The $1.2 billion community bank, founded in 1979, has been part of Giannoulias's public profile since he won election in 2006 because it made loans to a bookmaker as well as convicted Illinois influence peddler Antoin "Tony" Rezko.

According to the latest poll by Public Policy Polling, 32 percent of likely Democratic primary voters say they will support Giannoulias as compared with 20 percent who say they plan to support former Chicago Inspector General David Hoffman and 18 percent who say they plan to support former Chicago Urban League president Cheryle Jackson. So it's still a very close and fluid race, with many undecideds.

As these stories make clear, if Giannoulias is the winner, we can expect to hear for the next year about how the Democratic Party is so corrupt it is now promoting a scandal-plagued banker to fill Obama's old Senate seat. While Giannoulias leads likely Republican nominee Mark Kirk in one early poll, you better believe those polls will change in a general-election battle that focuses in on this banking theme.

Thus, if Giannoulias, it would be a clear disaster. He is literally the walking personification of all that the public clearly despises right now -- an Establishment politician closely connected to the industry that has destroyed the economy.

With him as the nominee, Democrats could lose yet another senate seat, and more broadly, they could lose any national high ground they need to reclaim. At a time when the Democratic Party desperately needs to reclaim the populist economic mantle and prevent Republicans from being able to mount their own right-wing populist campaign, Giannoulias would become the face of a Democratic Party that has already become increasingly synonymous in voters minds with the most hated aspects of the financial industry.

I'm not endorsing any of the other candidates, and I have absolutely no personal stake in the outcome of this primary election, other than hoping it doesn't destroy the Democratic Party I've worked with and for over the last decade. Maybe that party I once worked with and for is already totally destroyed -- I have a sneaking suspicion that it is. But maybe not. That's precisely why I write this: To point out that if this particular candidate becomes the new face of the Democratic Party, the "maybe not part" could easily disappear.