Bailed Out Bank Spends Gobs of Money on Golf Tournament

by Deb Cupples |  Many corporate executives seem to feel downright entitled to live high on the hog using other people's money. 

Northern Trust Bank got about $1.5 billion in taxpayer bailout funds.  Northern trust reportedly just spent gobs of money sponsoring a golf tournament: i.e., flying hundreds of clients and workers to Los Angeles, putting them up in ritzy hotels (including the Ritz Carlton), renting the House of Blues, paying famous bands to play -- even giving trinkets from Tiffany's to female guests.

House Financial Services Committee chairman Barney Frank and 17 Dems wrote a letter to Northern Trust's CEO asking for a refund of some bailout funds.  According to the Chicago Tribune, the letter states in part:

"'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.'"

Entertainment magazine TMZ did some poking around but had no luck learning the total amount that Northern Trust had spent on the tournament.  TMZ did  learn that the band Chicago got paid around $100,000 and that it cost about $50,000 to close down the House of Blues for a night. 

So, we could safely say that Northern Trust spent at least $150,000 for the weekend, but that doesn't include Cheryl Crow's fees; Earth, Wind & Fire's fees; hundreds of people's hotel rooms and air fare; hundreds of people's limousine services; the gifts from Tiffanys; the amount that Northern Trust chipped in for the PGA's $6 million purse....

Something tells me that Northern Trust spent far more on its golf tournament than AIG spent ($440,000 in shareholder money) on a spa-weekend for a few employees a few months back -- after AIG had received billions in bailout funds from us taxpayers.

A spokesperson for Northern Trust defended the weekend money-drain, stating that the bank had made the commitment some years back to sponsor the tournament.  He also said:

"'Northern Trust last year had net operating income of $641 million so these events were paid for by Northern Trust. These were paid by normal operating revenues,' the spokesman said. 'It's not that they were made possible because of the' government's program to inject capital into banks through the purchase of preferred shares."

Interesting.  If Northern Trust's net operating revenue was only $641 million last year, why on Earth did the bank need $1.5 billion in bailout funds?  I mean, if a company is responsibly run, how does it wrack up debts or losses that are more than twice the size of their operating revenue?

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Comments

[Fujikura Golf Shafts]

That could be a nice Golf Tournament but I don't think golfers should participate on this tournament. It's not right to sponsor any tournament if the money you will provide is not really yours.