Illinois Democrats no cure for what ails Obama

Republican Mark Kirk and Democrat Alexi Giannoulias (R) in a combination image. Giannoulias is trailing Kirk in opinion polls ahead of November's election in which Republicans are aiming to erase Democratic majorities in the Senate and House.

CHICAGO (Reuters) - Still reeling from the loss of the late Edward Kennedy's Senate seat to Republicans in Massachusetts, Barack Obama's Democrats now face the prospect of losing the president's old Senate seat in Illinois.

The Democratic candidate Alexi Giannoulias is trailing Republican Mark Kirk in opinion polls ahead of November's election in which Republicans are aiming to erase Democratic majorities in the U.S. Senate and House of Representatives.

Giannoulias's struggles come at a time when Illinois Democrats appear to be in disarray.

Scott Cohen, a pawnbroker-turned-politician who won the Democratic nomination to run for lieutenant governor, is fending off accusations that he brutalized women.

The Illinois legislature impeached and removed Democrat Rod Blagojevich as governor in January 2009, and he has been charged with racketeering, fraud, lying to investigators and other criminal activity tied to schemes that included trying to sell Obama's former U.S. Senate seat.

Prosecutors investigated, but ultimately opted not to charge Democratic Senator Roland Burris, the former Illinois attorney general who Blagojevich had appointed to serve the remainder of Obama's term, over his contacts with Blagojevich's brother before being appointed.

"Illinois politics has a life of its own. There is the symbolism of possibly losing the seat he (Obama) once held in Illinois, but he has 500 other things to think about," said political analyst Michael Mezey of DePaul University in Chicago.

BROADWAY BANK

Giannoulias, 33, serves as state treasurer. Republicans are spotlighting the soured real estate portfolio at the Giannoulias family's Broadway Bank, including loans to Michael "Jaws" Giorango, a convicted prostitution ring operator.

Broadway Bank was recently ordered by government regulators to raise additional capital -- after Giannoulias received his share of $70 million in proceeds following his father's death.

Giannoulias is trailing Kirk 46 percent to 40 percent in the latest opinion poll ahead of their November showdown.

The loss of the Illinois Senate race would represent a serious setback for Democrats. Losing control of either the Senate or House of Representatives could undermine Obama's ability to get key legislative initiatives approved.

Republican Scott Brown was sworn in as a U.S. senator on Thursday, depriving the Democrats of a 60-vote super-majority in the Senate, making it harder for Obama to pursue his agenda including healthcare reform. Brown won the Massachusetts Senate race to replace Kennedy, who died of cancer last year.

Cohen's woes have added to the Democrats' problems in the state. His former wife said he flew into steroid-fueled rages and later failed to make child support payments while he aired a campaign ad blitz touting job fairs he had organized.

Cohen said a 2005 domestic abuse accusation that he held a knife to the throat of his then-girlfriend was untrue. The charge was dropped when the woman, an accused prostitute who Cohen said was his masseuse, did not show up in court.

His would-be boss, incumbent Governor Patrick Quinn, said on Thursday that Cohen should drop off the Democratic ticket if he cannot get past those problems.

The deficit-riddled state dominated by Democrats has been downgraded by the debt ratings agencies and ranks above only California. Quinn proposed a 50 percent tax increase, but he quickly dropped the idea and the deficit has ballooned.

(Editing by Will Dunham)