Since the Democratic U.S. Senate debate yesterday, the Alexi Giannoulias and David Hoffman campaigns have been trading barbs online.
As he did during the debate, Giannoulias fired first, announcing a "reality check" advertisement that critiques Hoffman's first television ad.
The announcement, from Giannoulias campaign press secretary Kati Phillips, charges that Hoffman can't be independent from the very banks in which he's invested. Phillips sent an e-mail about the ad shortly before Giannoulias skipped a press conference after the debate.
"Hoffman has almost a quarter of a million dollars invested in stock at three big banks which were bailed out with taxpayer money," Phillips writes, listing JP Morgan Chase, Citigroup and Bank of NY Mellon, all noted in Hoffman's personal financial disclosure.
Those banks received almost $53 billion in funds from the federal Troubled Asset Relief Program, according to Phillips.
"Taxpayer dollars protected Hoffman's investments, and now he's using his personal wealth to finance his campaign," Phillips says in the e-mail. "It is hypocritical for David to rail against Wall Street banks when he is their beneficiary."
Less than two hours later, Hoffman campaign spokesman Thom Karmik fired back with an e-mail on Giannoulias' statements regarding the state's Bright Start College Savings Plan, claiming that Giannoulias cited two-year-old reports when he argued that Bright Start was among the best funds of its kind in the nation.
"Truth matters in a campaign, and Alexi Giannoulias drove right past it today," Karmik writes in the e-mail. "Alexi Giannoulias continues to misstate the performance of the Bright Start College Savings Plan, which lost Illinois families $85 million on his watch."
Bright Start has been dropped by Morningstar, a leading provider of investment research, from the top rankings, and has not appeared on the firm's best-performing list since the end of 2007. After that, the fund lost 38% of its value, according to the Hoffman campaign.
"This misrepresentation is exactly why voters are cynical," Karmik writes. "They are sick of being lied to. This is why character, job performance and experience are key issues in this race, and why again Mr. Giannoulias fails these crucial tests.
Karmik goes on to quote passages in several Morningstar reports from last year:
July 28, 2008: "Undoubtedly, the fund's latest struggles demonstrate the risk of going against the grain during prolonged bouts of uncertainty."
October 27, 2008: "In fact, the fund's recent losses (20% for the year ended Oct. 24 2008) have been sizable enough to erase any gains that investors made here over the past five years."
December 17, 2008: "Since our last update in October, this fund has continued its dramatic slide. For the year ended Dec. 16, 2008, it has lost 37.6% which is 31 percentage points worse than its typical intermediate-term bond rival's loss."
Phillips, undeterred, countered the allegations, pointing to a Consumer Reports ranking from March of this year that highlighted Bright Start as one of the best 529 plans in the nation.
She quotes from that magazine: "After studying state 529 college savings programs to see how well they performed during last year's stock-market plunge, we found five that are worthy of an A," including Bright Start.
Phillips also draws from a Money Magazine ranking a month later, which pointed to Bright Start as one of the top-three low-risk 529 plans.
And inevitably, Phillips picks a more favorable assessment of Bright Start from Morningstar, the very firm Hoffman's camp used to tear down Giannoulias' statements:
"In fact, one of those nine Oppenheimer-managed plans, Illinois' direct-sold Bright Start College Savings Plan, made our best list last year. The previously named 'Active Portfolios' were caught up in Oppenheimer's fixed-income fiasco. The losses were so unprecedented that in mid-January 2009 Illinois' State Treasurer Alexi Giannoulias indicated that he was preparing to file a lawsuit against OppenheimerFunds. At the same time, the state also reacted by no longer offering the three troubled Oppenheimer fixed-income products, but existing shareholder money is still tied up in them. All told, the plan still holds plenty of appeal; its untainted 'Index Portfolios' are still the cheapest nationally available Vanguard options."
In the latest rebuttal, Michael Powell, campaign manager for Hoffman, denied the opposing campaign's earlier statement about Hoffman's investments in the three big banks.
"Mr. Giannoulias falsely charged today that David Hoffman used bank stocks to fund his campaign," Powell says in a statement. "That charge is completely ridiculous and false. Like many Americans, David Hoffman owns stock, but none of the bank stocks were used to help fund his campaign."
This is a debate that keeps on giving, and it marks a real turning point in the Democratic Senate race.
And it could get better. Word from officials at Chicago's Union League Club is that the swank joint could host another U.S. Senate debate in January — among those rock-bottom Republicans.