Northern Trust defends spending on PGA event, parties-Rep.Frank said he's going to ask for $$$ Back

[kpete]

Source: Chicago Tribune

Northern Trust defends spending on PGA event, parties
Rep. Barney Frank said he's going to ask for the money back.

By Becky Yerak | Tribune staff report
2:33 PM CST, February 24, 2009

Northern Trust Corp., which in November received about $1.5 billion as part of the U.S. Treasury Department's Troubled Asset Relief Program, defended Tuesday its wining and dining of clients during the recent Northern Trust Open in California.

Entertainment Web site TMZ.com on Tuesday reported that Northern flew hundreds of clients and workers to California and put some of them up at ritzy hotels, including the Ritz Carlton in the Los Angeles area, and entertained them with such groups as Chicago, Earth Wind & Fire and Sheryl Crow.

House Financial Services Committee Chairman Barney Frank, along with 17 Democrats on the committee, sent a letter today to Northern Trust's CEO asking that the bank repay what it spent on the entertainment during the golf tournament.

"This behavior demonstrates extraordinary levels of irresponsibility and arrogance," the letter said. "We insist that you immediately return to the federal government the equivalent of what Northern Trust frittered away on these lavish events."

Read more: http://www.chicagotribune.com/business/chi-biz-northern-trust-open-parties-feb24,0,6894365.story

[aquamarina]

1. I swear these CEOs life in an alternate reality.

Seriously, when everyone is tightening their own belts, these sloths continue to operate as though nothing has changed.

[acmavm]

2. And they think that there will be no repercussions! I mean, they must think

old John Negroponte can call of the dogs still.

It's just amazing. Almost like it's too arrogant to be believed.

[salguine]

7. They think that because there WILL be no repercussions. Just watch.

[troubleinwinter]

3. "a letter" that will "insist". Oh goodie.

[rpannier]

6. I'm sure it was a tersely worded letter

That'll get their attention. :eyes: :sarcasm:

[Mari333]

4. good, as I said on another thread

I have been to the chicago NT corporate offices, and they are awash in bucks..marble desks, walnut and cherrywood ceilings and walls, and their bathrooms are so huge you could house a family in there..to decorate just the john probably cost more then the price of my house..priveledged people, they think they are..well, time for a smackdown.

[The Backlash Cometh]

5. I don't know how much it's true, but,

someone I know told me that Northern Trust didn't need the bailout money, nor did they ask for it, but the government felt it was necessary to include all the important banks in the bailout. Have no idea if this makes any sense.

[ozu]

8. Yeah

Wells Fargo was in a similar situation. They didn't need the money, but Paulson thought that singling out the firms that did would cause undue pressure on them, so he urged even the ones that didn't need funds to accept them. Goldman as well I think.

They weren't forced, but they were "strenuously urged".

[The Backlash Cometh]

9. What am I missing, here, then?

Was giving them the money an effort by the feds to control them? Isn't Northern Trust free to make the decisions they want to make with their money, as long as they're not using the fed money?

[ozu]

10. I don't think you're missing anything

Northern Trust should be able to use their own capital however the stockholders see fit (within regulations), even if that means running their business into the ground with it.

They could be in a similar position as Goldman Sachs where they didn't need the $10B, they haven't used it, and they've even offered to repay it immediately, but there are apparently hoops they need to jump through before they're allowed to do so, like raising matching funds with a preferred stock offering.

I'm not sure what that entails exactly but there are definitely conditions to the TARP money besides repayment.

[Kalyan]

14. debunked

If i were to received $1 everytime someone claimed Wells Fargo was pressurized into taking TARP fund, i would have been a rich man.

Wells Fargo - even if it was solvent and running well, thank you very much, took TARP funds for a specific reason. If they went bust, they knew that the govt wouldn't bail them out. So, taking the TARP funds was the bank's ways of saving itself from bankruptcy. That's as good as it gets. I, however suspect, that most banks wouldn't have the luxury of being in this position.

[tuvor]

11. Here's a link to the letter:

http://www.aolcdn.com/tmz_documents/northerntrust.swf

[noiretextatique]

12. simple solution

give the money back. then they can sponsor as many golf tournaments and throw as many parties as they want.

[jmowreader]

13. If it's true they didn't need the money, they're probably willing to do that

but it looks like there's no alternative method of giving it back than to go through the whole TARP procedure.

If I was running a solvent bank that got TARP money, I"d put it in something secure and short-term, keep rolling half the interest it generates back into the investment, then make a big deal about how my bank's stellar financial management created a net gain to the American people...so thank you for letting us serve America.