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7/8/2010 Rossi linked to troubled commercial ba…

POLITICO Glenn Thrush Rossi linked to troubled commercial bank

May 10, 2010


Categories: Senate Dem ocrats

Rossi linked to troubled commercial bank


Does Dino Rossi have a bank problem?

Millionaire Rossi’s expected entrance into the race against incumbent Sen. Patty
Murray (D-Wash.) will likely prompt Democrats to question his relationship to a
Bellevue, Wash. bank that has run into problems with federal regulators over low
capital ratios and lending practices.

Sound familiar? A similar problem with a bank has proven to be a huge headache to
Illinois Democratic Senate hopeful Alexi Giannoulias, whose family owned Broadway
Bank, which was taken over by the FDIC.

Rossi’s involvement with the financially foundering Eastside Commercial Bank isn’t
nearly as intimate or quite as substantial as Giannoulias' -- he was one of 35
stakeholders to shell out $10,000 to start the enterprise in 2001, according to a Rossi
ally with knowledge of his involvement.

But he was a co-founder, investor and the man who wooed the bank’s acting CEO,
Dick Ducharme, a friend, lobbyist and business partner, to invest, according to press
accounts. As of 2007, Rossi, a former State Senator, had a stake in the bank of at
least $75,000, which is the maximum amount that could be listed on a legislative
disclosure form.

Eastside, like dozens of other small banks in the Northwest, has been sunk by sour
deals. Last year, the federal Comptroller of the Currency, which monitors capital
ratios, declared Eastside had "engaged in unsafe and unsound banking practices
relating to its strategic and capital planning, credit underwriting, credit administration,
concentration risk management, and liquidity management."

The feds demanded the bank raise $3 million -- a benchmark Ducharme and others
are still attempting to meet.

The Democratic Senatorial Campaign Committees, which has been gearing up for a
Rossi run, recently raised other questions about his business dealings, including
$20,000 in back taxes owed on a property owned by Rossi's investment firm.

Rossi's defenders say he's the subject of a Murray-backed smear campaign and say
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7/8/2010 Rossi linked to troubled commercial ba…
Rossi has "no direct ties" to the building. They also point out that Giannoulias was far
more directly involved in his family bank's operations and that Broadway's capital
requirements were exponentially higher, as much as $85 million.

"I guess this is one of the issues they've been trying to bring up... and this stuff is not
sticking," said Peter Cowman, spokesman for the Washington State GOP. "Dino is a
small investor in this local community bank that gives out loans to small businesses
and things like that... He's never been on the board and hasn’t been an officer with the
bank... These attacks are pretty low."

When asked for the size of Rossi's current investment, Cowman laughed.

"He has some. It's not worth as much as it used to be."

Posted by Glenn Thrush 07:30 PM

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