Bank that got bailout $ throws lavish parties?
From CNN's Jack Cafferty:
A bank that got $1.6 billion dollars in government bailout money sponsored a series of "lavish parties" during a golf tournament in Los Angeles last weekend.
Northern Trust Bank sponsored a series of “lavish parties” in Los Angeles last weekend.
Chicago-based Northern Trust bank spent millions of dollars sponsoring the tournament and associated client events. The website TMZ reports that this included dinners, concerts by Sheryl Crow and Earth,Wind and Fire, a private party at the House of Blues and gift bags from Tiffany. Also, hundreds of people were flown in and put up in luxury hotels.
A Northern Trust official confirms to CNN that the bank sponsored the events, but not on the taxpayers' dime. He said the bank is healthy and didn't ask for TARP money, but entered the program at the request of the government. He added that their "normal cash flow" - and not TARP funds - paid for the event.
But the bank's explanation may not be enough for some. Congressman Barney Frank is writing a letter to Northern Trust calling on it to pay back the money it spent on these events. Frank says this behavior demonstrates "extraordinary levels of irresponsibility and arrogance." And in the Senate, John Kerry says he'll introduce a bill this week to end what he calls the "extravagant spending practices" of banks getting taxpayer money. Under his legislation – banks wouldn't be able to host, sponsor or pay for conferences, or holiday or entertainment events in the year they get government funds.
In December – Northern Trust announced plans to cut 450 jobs this year.
Here’s my question to you: What message does it send when a bank that got $1.6 billion in bailout money throws lavish dinners, parties, and concerts?
Interested to know which ones made it on air?
Karen in Tennessee writes:
I was told by someone in the banking business that it is very expensive to cancel an event like this, which is under contract for several years, but who cares? Northern Trust had no business accepting bailout funds under these circumstances, and even if they hadn't, it was an offensive display of excess. I hope everyone contacts their state representatives to demand the monies be returned, as I did two days ago.
Mike writes:
The bank was not "bailed out." They did not want the money. The Treasury wanted all the major banks to take some of the bailout money so it would not be obvious which banks really needed the money. The banks should be able to do what they want with their money. If the government doesn't like it, they should not give the money to them in the first place.
Nelson writes:
No matter how you spin it, and even if the intentions were good, having bailout money puts you in the crosshairs. Right now, people are mad at the banks and holding Wall Street responsible for this recession. No amount of spin is going to make this look good.
Susan writes:
The message it sends is the same message big bankers have always sent, that they live in a different world from the rest of us and will spend our money as they choose with total disregard for the difficulties of others, including their customers or the taxpayers. We always knew they were greedy. Now we know they're greedy, stupid and lack any sense of morality whatsoever.
Kevin writes:
This bank never asked for any money. Maybe Barney Frank should look things up before he opens his big mouth.
Mac from Traverse City, Michigan writes:
The message it sends to me is the management of this bank graduated from the Dick Cheney School of Compassion and the Republican University of Ethics.
@jackcafferty on Twitter
It sends messages that they are out of touch with the real world and also sends a clear message of irresponsibility!
Barney Frank really irked me with his comments on this - and the phrasing of your question doesn't help.
It all depends on what the money was used for. Businesses are in the business of spending money to generate business, reward employees, and justify the investment of shareholders. "Lavish" is a subjective term.
.
For the banks to move foreward, they need the lattitude to spend money to incentivise employees and gain customers. They do not need some member of Congress to pretend he deserves line-item veto over every expenditure.
If they squander money, the government like any other shareholder, can ask for an explanation and sqwak as appropriate. That is the appropriate accountability here. Having to second-guess which Congressman is going to randomly sqwak at will in the public forum is remarkably inane
This extravagance is a loud, clear message: Bankers and banks have become so selfish and self-serving, that they don't care who knows it, and they don't care what the rest of us think of them. What world do they live in? If my children told me they'd like to become bankers when they grow up, I might send them to their rooms for a time out. But if they told me they'd like to become bank robbers when they grow up, I'd probably go buy some ski masks.
Cynthia in Minnesota
It sends the message that this is a bad deal for us. Obama still doesn’t understand that these weasels will never get the message until they are made to feel as much pain as the American people feel. They do not need bailout money, they are hoarding. Stop allowing them to operate on out dime while not making any loans and they will begin to make loans it’s as simple as that. They need to loan money to stay in business – unless uncle sap supports them without condition as he is.
That the little people really don't matter to them like their slogans say. I say this is false advertisment and unless you can stand behind it then you need to pay us back for all your lies.
Robbie
Tx
What does it mean if we let them? Accountability, Transparency, Oversight are they only words or a call for action. VP Biden ridiculed Palin for wanting an increased role as vice president if McCain was elected. But now VP Biden has the authority to choose action over words. Time will tell
Plain and simple, we're suckers for falling victim to their plea for help. Now their laughing in our faces at our expense.
That it's time to nationalize the banks... lovely.
Jack: Most big banks are just a pyramid. They got so big following Wall Street expectations and cannibalizing each other, so they don't know what is going on with-in. We will always have this kind of behavior until we put a stop to it. Some should get fired and some should go to jail!
The message is loud and clear Jack. We are all a bunch of idiots and we will never learn from our previous mistakes. Let these Banks go under and others will learn that we finally mean business and there has to be accountability.
The message I get is that they haven't yet realized that the Bush era is over. These guys need a slap across the side of the head to wake them up to reality.
The message is: screw you and the horse you rode in on. We are Bankers and we can do whatever we want because we are above all you lowly tax payers. Someone needs to publish the names of the bank officers who pulled such a stunt, so they can be publicly humiliated.
The message of pure arrogance and defiance. I'd like to see all of the people that bank with this group pull all of their money out and let them go under. We need to send them a message that we will not stand for this nonsense anymore.
It means that the people who are still in charge of this bank have no idea what got them into trouble in the first place. They did not learn a darn thing, I guess the attitude is why worry about it, we will just get more when that first bailout is gone. Shame on them, and shame on us for allowing this to happen. I do hope they pay every bit of it back.
The message is, "Our marketing department and lobbyists can make chumps out of all of you, so don't even think about a boycott. Thinking is our specialty. Just keep blindly doing business with us and ignore the credit union down the street."
It tells us they consider their 'lavish parties' as 'work'. I don't think they ever heard of a shovel, and prolly don't know which end to grab hold of. These people have no shame ,and no comprehension of right and wrong ,when it comes to money.
Jack:
The message it sends is as follows but with my perception added; Fool me once, it is your fault,
fool me twice, it's still your fault, but
fool me again and it is a "triple-dog dare" issue!
Jack
The old adage....Do as I tell you not as I do!!! Everyone in the middle and lower income bracket is expected to tighten their belts, and wait for the lavish diners to be over before they consider throwing some scraps to the poor folk!! Until the ones in charge stop thinking of themselves and feel the pain of those in dire straits there will be no change!!! Let them take the example of Miami banker Leonard Abess Jr who rewarded bonuses to long-time employees of City National Bancshares. Now that's a message!!!!
It sends the message that Jack is just out to make me even angrier than I was!
It's monkey see; monkey do. Last week President Obama flew to Denver to sign the stimulus. Joe Biden flew separately. Nancy Pelosi, allegedly hired a private jet to take her to Denver as well. All expenses are on the taxpayers dime. Is Washington not good enough or cheap enough to accomplish this ceremony at a time when money is tight? Our government clearly does not lead by example.
It seems to me that the banks are begging to be nationalized.
Jack, it sounds like there are some bad apples spoiling the batch, again.
The message it sends is that there is no incentive to repay the TARP funds banks are receiving. According to this bank, they didn't need the money, so why keep it? Because apparently there's no reason to return it.
Eat, drink, and be merry, for tomorrow we die.
What message does it send? I probably cannot print those words Jack, but basically it's the one finger salute to the American public.
I guess the rest of the American people's dinner invitations got lost in the mail Jack.
It's only money. It has been wasted and pilfered before. The bank will expense it and or write it off. The balance sheet will cover it up, like it has been done many times before. The message ? : "Hey, watch how we deceive you."
The message being sent by the bank is thanks for the money, we're celebrating recieving it.
I was told by someone in the banking business that it is very expensive to cancel an event like this, which is under contract for several years, but who cares? Northern Trust had no business accepting bailout funds under these circumstances, and even if they hadn't it was an offensive display of excess. I hope everyone contacts their state representatives to demand the monies be returned, as I did two days ago.
For being the so called best and brightest, these CEOs sure seem to be slow learners! Don't they watch the news? The party is over !!
Taxpayer $$$ or not, it shows an amazing lack of the smarts.... Very similar to going past a breadline in a chauffer driven towncar in 1931. I wonder how the stockholders feel about the way "their" money is being spent.......
It shows how uncaring they are about the Country they live in.
They should either shape up or ship out. We do not need their kind. They are acting like wealthy people do, they think they are above the ordinary people. I say give the money to (small hometown banks)
as they will give loans and not waste it.
I am sick of these lavish retreats banks are taking. I am an educated person and understand that all of these things come from seperate accounts, money is raised and apportioned in a supposedly smart manner. But really? This is not just bad for your image, not just bad for your business, but bad for the country. This behavior is unamerican.
I say we take large stakes in these comapnies and force them to do the right thing. Then, fire the boards and replace them with bright, young minds who understand the terms global citizen and copassion. Responsibility is good business. How else can we help shareholders voice their concerns in meaningful ways? the news is not enough.
The message is that it's okay to act like this becuase the CEO's of these bailed out institutions do not care and know that nothing will happen to them.In the end it's nothing more than a vicious cycle of incompetence. They fail they get bailed out etc and so forth and on and on and on.The suits they used to where are nothing compared to the teflon beauties they wear now.
How many of you out there ever meet and talk to anyone in the ultra rich class? Life is a party why stop now.
Remember Enron' s elaborate hoax which nearly destroyed the California economy - can it be that the banks are playing the same hoax??
A bank that received $1.6 billion (yes, billion!) in bailout money which throws lavish dinners, parties and concerts definitely should be made to pay back to the government the $ spent on such luxuries. Entertaining could have been postponed until financial times got better. However, there is no excuse for not having a simple local band provide the music, the dinners to be family style and the parties to be simple if such parties and dinners were necessary. I believe a customer will remain a customer without being wined and dined. If they can't be and business is lost, oh well. Where's the integrity here?
Jack,
ANGER. Do these banks not have any clue? More and more innocent people are being swept up in the housing foreclosure crisis and job losses. And there is real pain out here. And now we find these idiot banks are taking OUR money and going out to parties with it. It's totally ridiculous.
Come on guys - I'm all for capitalism and the riches therein – but that's not where we are right now. We're in a phase of recession, not a time to be celebrating with lavish dinners and parties and concerts - I agree with the congressmen and their furor. I'm wondering why this is so partisan??? Do both sides of the aisle not agree this is ridiculous?
I am in now way supporting any company that would dare to throw a lavish party given the current economic crisis if for no other reason then for the PR hit you would take. However, I think all the facts need to be examined before truly passing judgement. Was this bank forced into the governments agreement? If so, then I don't think they should be held to the same standards as a company that NEEDED the governments cash.
To me, a hard working American, it means that we need to tax the ever loving you know what out of the rich elite, and put it in the hands of real Americans where it belongs. Why are these people allowed to do this? Is this what conservatives like to call "success?" Thank God the Dems are in control now....hopefully there will be NO partisanship in Congress so the RepugniCants will be unable to whine about us spending their inheritances to bail out the real backbone of this nation.
Well, if someone gave me 1.6 million dollars, I would through a party too. It does not matter if the money came from their funds or the 1.6 million, it sends the wrong message to the public. I agree that this should not be allowed. Make em pay it back, double.
Bill: When Northern Trust Bank sponsored a series of “lavish parties,” it gave taxpayers -who funded its $1.6 billion bailout -the "finger!"
To me it means that they didn't need the bailout money in the first place. They should just be left on their own.
The message is that we who work hard everyday for very little in return mean nothing to the upper echelon of America’s rich people. Our own government must take us common folk as fools. It’s a slap in the face, that’s what it is.
A bank spent millions of dollars? That sounds great for the economy. The restaurants, and it's staff must be very greatful for the business that it had. That is one way we keep our economy moving!
If, as Northern Trust claims, the millions of dollars spent on their lavish parties came from the bank's "normal cash flow" then why in the world do they need ANY TARP funds? If the company is so cash-rich that they can spend millions on parties, then the right thing to do is to return any bailout funds they received. Unbelievable!
It goes to show how corrupt and incompetent the Bush administration was in giving these banks money without any kind of rules in place. It emphasizes the gross negligence and ineptness of the previous administration.
Whether they got the government money or not, what message are you sending when you would rather spend it on a party and then cut 450 jobs/employees! That is the kind of mindset governing the funds of this nation; heartless and brainless.
Come on? Barney Frank has a problem? He is the problem. This is an event for clients. Clients is what the bank needs. Give the tarp money or don't, but stop complaining about how it is spent.
We've been ROBBED.
How many stories will it take to bust the back of Barney-let's just cancel the whole giveway to the banks NOW!.
Did anyone take a minute to review this event?
They raised 50 million dollars for charity. This is money that will immediately flow back into our economy. If this is Barney Frank's idea of a bad way to spend 1.6 million, with a 30 times return into our economy. Then we are without hope. We need more activities like this to stimulate spending not fewer.
I'm honestly not sure which is more irresponsible; banks receiving taxpayer money and failing to display a modicum of restraint in the very public way they appear to use it OR our elected officials giving away our money and failing to put in place any oversight on how it is being spent. Either way, it is the average taxpayer who suffers.
Manny Ajuria
Germantown, MD
Okay, if is our tax dollars couldn't they invite some of us????
Just another arrogant insensitive blunder that's neither an oversight, nor a mistake, but really just a telltale sign of insatiable greed and corruption.
We've become a nation of disfunctional leaders and corporate managers, and of shocking incompetence and shamelessness at all levels of society – from the federal level (SEC incompetence and wholesale Bank failures) to local government and institutions, down to mainstream America (signing up for a overburdening mortgages and dumping of infants in dumpsters). We've become too frivolous to know what's right from wrong – too isolated in our comfort, too indifferent to make any real substantial changes. We've been wanting to go for a nice long pleasant ride...........these banks should be forced to return TARP money!
Throw these CEOs in jail and then bill them for the TARP money now. It is the only thing that will stop the corporate corruption. People are worried about the US becoming a socialist country, but what they should really worry about is the fact that we have not been a capitalist society for at least 20 or 30 years. Our corporations were a facade whose head honchos practiced corporate thievery and tried to sell it as capitalism. The only people worse than the corporate CEOs are our politicians who pretend to be outraged.
Jack, this is just unbelievable!!! After all the negative publicity the past several weeks regarding banks and investment firms using taxpayers money for parties, bonuses, etc., these knuckleheads literally thumbed their noses at Congress, poked us all in the eye with a sharp stick, and had a big party. Their arrogance is beyond words and they are also very stupid if they thought this would go unnoticed, Even putting aside the $1.6B supposedly “forced” on them (why would this be done, if true), to be spending millions on these parties while laying off hard-working employees is immoral and unconscionable.
Since when does a healthy company need to cut 450 jobs?
Everything in our economy is interconnected. Other parts of it would fail if banks didn't throw any of these parties. The government can't give money and then expect every operational procedure of these businesses to change. If the bailout doesn't work it won't have anything to do with this – it will have a lot more to do with the lack of relief at the bottom end. Where is student-loan forgiveness, for instance? Why bail out borrowers more than debtors? You have to act on all areas of the economy or the problem-areas will balloon out into new zones.
I think it shows the complete break from reality, that many of these banks have exhibited. The fact that they still continue with such arrogance, is mind boggling....
Fine, so give the 1.6 back. You obviously don't need it.
Why don't we make it a crime and criminal prosecute them?
I'm sick of this, does anyone in congress care?
Cafferty,
If you had a brain you would understand that Northern Trust Bank caters to the wealthy, and those clients expect some entertaining in the normal course of business...just like your liberal friends need American flags to burn at your parties.
You belong on TMZ. Although no one looks to CNN for 'real' news, there suggestion that you might be considered a 'journalist' as opposed to the liberal jester that you are is offensive. TMZ is a much more appropriate medium for your witless blather.
Michael Nieset, Chagrin Falls, OH
Let them eat cake!
We need to hold the banks accountable for thier actions. I sure would like to be bailed out with 1.6 Billion. Thanks
unlike most banks, NTRS made money last year, I think whatever they're doing is working.
It just means its business as usual in the USA
If Northern Trust didn't need the TARP money, why was it offered to them? And as a follow up to that question, why did Northern Trust take the 1.6 billion if they didn't need it? The answer to the second question is the same as the answer to the question of how did the financial institutions get into all this trouble...pure and simply, GREED! I say give the greed ridden banks nothing...let them go under.
Northern Trust – What do you mean the money spent on the parties was not the money you got from taxpayers? If you had money to spend on parties the question is WHY WOULD YOU TAKE BAILOUT MONEY? If you didn't need it, give it back!
Jack,
Northern Trust is "the rich mans bank" and has a ton of trust funds millions. They have to drum up business, and offering a free cup of coffee and a cookie doesn't cut it with the US elite crowd they are courting for business.
Why don't Northern Trust just send back the $1.6b to the treasury and then they can hold the extravagant shindigs they want.
Jack; Throw all the ceo's in jail for stealing money from the american people. The money they got were to help the people and they didn't so throw them in jail to teach them a lesson.
Another question, how many of those 450 jobs they are going to cut would the expense "Parties" cover? If they were being a socially responsible company they would have saved the money to keep some of those people employed. Another good example of Corporate Americas lack of responsibility and loyalty to their workers.
More importantly, what does it say about our representatives who against the public's recommendation handed the equivalent of $7500 per taxpayer to banks that had already proven to be irresponsible. Barney Franks and the rest of Congress can now act like Captain Renault in Casablanca and declare that they are 'Shocked' to find that the banks are abusing the TARP funds, after they turned over the money with few if any restrictions.
Can Congress' ratings sink any lower?
If they did not ask nor do not need the money then give it back with interest and penalty. By the way didn't Nero fiddle while Rome burned? CH Brown Inverness Florida
This is appalling. I want my tax money back! The banks don't deserve it and are not worthy. I want my money back now! On the other hand, if I say that I am a bank, can I get some of the bail-out money? I only need $15,000 to pay off my student loans. Thats a molecule of a drop in the bucket.
Lavish dinners, parties and concerts are as much a part of the economy as the banks themselves. Better the executives spend than horde the money in a Madoff Ponzi scheme. It's not the way they're using the money, rather that there are NO regulations about how the money is to be used. Excuse the metaphor, but the American public, media, and congress bypassed their right to complain when they gave money to an alcoholic. That alcoholic will spend the money on booze. We're just mad we weren't invited to the party. Maybe next time, we'll hand-out sandwiches....
It just amazes me how some of these banks think. They either think they will never be exposed or that we're just plain stupid enough to believe the lies. I am a taxpayer and struggling to keep my head above water so that I won't drown in debt. I work hard everyday even goes to work feeling bad, but yet, my tax dollars pays for parties!! I pray that someone in government will do something about this nonsense real soon.
This burns me to no end when I hear off all this BS spending going on. I sit back and look at the food shelters that would have made good use of thier lavish spending money. There are too many needy families in the US that need help and can't get it. I know of one family for example in Middleburg Pa that lost a vehicle much needed to transport their daughter with a heart condition back & forth to the hospital do to falling behind on payments. The mother can't afford her medication for diabetes, what the father makes the bank takes from him to pay outstanding loans. They have never been able to recover from a fire in which they lost everything.
I'm sure there are plenty of families like the one I described that this money wasted could have helped. I feel all this bail out money that was given to these big companies to waste should have been divided up among each and every one of us.
I would have made good use of the money helping those in need!!!!
Are you kidding me?!?!? They have the nerve to announce that they will be cutting all those jobs and then throw a multi-million dollar party. Don't they realize the world is watching?? These banking officials should not only lose their jobs, but also be made to go on national television and apologize for what they have done.
It sends a message that the people who are in charge of our money have no conception of its true value. That's why the market is 'readjusting' right now.
We need to seperate money spent on client/prospect events and money spent (bonuses)on employees of the banks. Unfortunately in the US business world, entertaining clients/prospects with these kind of functions is a business generation event. Should we also ban these institutions (and US automakers etc.) from advertising in the media? How many jobs at CNN might be impacted?
Writing from Sterling, VA:
It means someone forgot (or most likely, refused to put in) any language that would restrict the ability of bankers to celebrate their good fortune in receiving huge taxpayer bailout, or to forfeit the money if Congress found out about their celebrations. If I was in the banker's position, I'd be celebrating, too.
Remember, if you buy stock in a company, they can do whatever they want with your money once they give you their stock. That is why you are supposed to investigate a company, check their return on investment, management philosophy, etc., before investing.
If they didn't ask for it why do they get held to the same standards? Let them do throw the party, because at the end of the day it is their dime.
It is illogical and irresponsible for any person or any company to spend money extravagantly in this time of economic crisis. If any person or company has willingly taken any tax-payers money, then it also becomes immoral and should be illegal. The government has to hold companies and their administrators accountable and be required to show that every penny that they receive be used only for necessities!!!!!!
Jack – If you will start the revolution, I'll meet you at the Boston Harbor with my trunk stuffed to the brim with tea bags.
this should be a crime/ its stealing from tax payers(breach of trust
I think it's outrageous. The only thing that's more outrageous is for someone living a life of luxury perks while feeding at the taxpayer's trough like Barney Frank to be the one to point it out.
It's just par for the course, Jack! 🙂
–EyeAm
Florida
The message this sends? That bankers are party animals!
About the same message Pelosi gave the country by flying to Italy on our dime. What was the total cost of that little jaunt. And let's not forget she had her husband in tow. So the message to me is, the American people, 'Let them eat cake."
The message is what I have been saying for years.
That Americans are idiots!
The message is clear...banks care about money, not people. Vive le Revolution Caff!
Thanks for additional explanations since in this case...it simply means that they are spending and helping the economy!
The message is "Arm bent, fist up and second arm crossed over! They just don't care, Jack!
For God sakes, banks need to be able to conduct business without grandstanders like Kerry and Frank breathing down their neck. Let me know when Kerry and Frank start working for a dollar a year until the US budget has a surplus.
It means, that they just dont care about the average hard working Ameican. Why not make a program that could help customers save money, or even heaven forbid, give them a slighty better interest rate then 1 or 2% they currently get from saving accounts. Instead we know the truth, that fat cats need to paty more then help.
Its simple, the message they send is that they can do whatever they want
Ok, so some jerk that still doesn't get it spent money he didn't have. What else is new? Buisness as usual if you ask me.
i don't know from forced, but, i think that breaking one big pile into two smaller piles in the same vault is semantics, not separate. but then, the argument is, we don't want to reward losers, right?
This is just another example of the difference between the businesses recieving a bailout and the people who are not getting bailed out and paying for the business bailout. It rates right up there with Nancy Pelosi and her group of special people taking a government jet on a junket to europe and us who are out of work wondering if we can afford to drive to the store for groceries. This is an obvious have and have not scenario.
Whats the difference between tax payers picking up the bill for banks to use on trips and parties and taxpayers picking up the bill for the Nancy Pelosi gang to take an all expense paid first class trip to Italy?
The only differences I see is the media is not interested in exploring why we had to foot the bill for Pelosi's vacation and they are interested in blasting the banks because right now the banks are in no position to fight back.
Come on Jack, help us out. Tell me why I had to cancel my vacation but I had to help pay for Pelosi's
Jan
Forget the message it sends....a 5-year old can tell you. The real question is WHO and WHEN did the US Government pressure Northern Trust to take that 1.6 Billion Dollars.
I feel lousy. Nobody from the BUsh administration called me to see if I wanted $1.6 Billion. I know I am in Miami...what about "Southern Trust"?
You have to be kidding!
It is INFURIATING!!!!!!!! The bank should be made to return ALL $1.6 billion to the government when it squanders all this money on lavish parties and weekends! And after all this, it now announces it's laying off 450 employees? SHAME ON THEM! They should be forced to return ALL the money immediately.
That just shows not to give banks billions. And they should give it to the people that really need it!
Please read my answer Jack. I think it's totally irresponsible for Northern Trust Bank to spend millions in lavish parties while the average American is going through a tough time in this rough economy. Instead they should do what banks do, that is lend money so that people can buy cars and homes.
As someone who is hired to work @ the type of entertainment events the Bank sponsored, I cannot fault them. They actually created jobs. They didn't want the TARP $ & Barney's going to blast them for going aoub their business? I think there are other banks that he could write letters to.
Since the government took preferred shares it doesn't have any voice in how these companies operate. This is silly, you have never heard of fishing for customers at a sponsored event? So they spend a million dollars to bring in a few billionaire customers and we're supposed to be upset? That's not disconnected. Please convince that billionaire to put his money in the bank so it can be loaned out to everyone. What's really funny is a SENATOR complaining about PERKS.
If Northern Trust did not use bailout money for the lavish event, then they should not have a problem returning to taxpayers the exact amount that they spent.
It says the world is their oyster and they're going to eat it, and the rest of us can eat something else and die. It must be blissful ignorance to be so completely disconnected from "the little people". Perhaps there is a legitimate reason for the party. Perhaps it was just a going away party for those being fired later this year.
SELECTIVE MORALITY AT ITS BEST!! Bank throws a golf bash – thats nothing – how about naming a baseball field for $360 million dollars
( half the cost of a new presidential helicopter) I am out of work and loosing my home and that $360 million could go along way in helping people in New york that could care about a name on a baseball field – Guitner (spelling?) said he accepts that – boy is that seletive morality – he must be a baseball fan – not a fan of housing.
Michael – NY
Message? Irresponsibility is okay and rewarded lol...they need to be educated more...I heard that most of them (bank employees) are high school graduates or high school dropouts or GED survivors. They need to educate themselves regarding responsibility, morality and more on NUMBERS.
I am a small business owner who is as progressive as they come, but this time the bank was within its right to do what it did. We must encourage spending and we must encourage people to want to become rich. On the other hand, if the bank doesn't need the government's money, then give it to California who can use it!
Steve Apolinsky
I think the American People are darn sick of this "let them eat cake" behavior!
I don't have a problem with a bonus of a couple hundred (or even thousands) for a job well done, and it does not bother me to hear that a company had a Christmas (or "holiday") party, with lots of shrimp, prime rib, and maybe a two piece band and open bar.
But this lavish crap has to stop. I do not give a rat's butt if the bank in question is solvent or not. If they are so solvent let them repay the TARP money IMMEDIATELY!
Maybe what it will take for the fat cats to get the message would be for it to be LAW that all such extravaganzas would have to be public knowledge, if the company took ANY public money. Then the average guy could picket the venue and make their displeasure known!
The health of banks is public information, so the idea of camouflaging unhealthy banks is ridiculous.
Why should lavish spending on entertainment be tax-deductible in the first place? It's a tax-free perk that results in keeping higher taxes on the backs of lower-paid employees.
And finally, it can't be legislated against, but why should executives enjoy over-the-top perks and bonuses in the same years that they are implementing large-scale layoffs?
Hi Think the bank officers, like Northern Trust bankers, who spend lavishly with bailout money and cannot get in through there heads the crisis we are all in, should be put into the old fashioned stocks on Wall Street and have tomatoes thrown at them !! Maybe public humiliation chance old ways of thinking !!
Jack, it says that Norther Trust is run by either Swine or pond scum. Take your pick.
Maurice
Florida
Jack,
Earlier in the Situation Room, you said, "It's time for a revolution." I agree...when to we report for duty. The old adage: "The Rich get richer, the poor get poorer." Well I would like to add: "The people in the middle just go broke." Keep after them Jack!
That's an easy one, Jack. It means, "Business as usual."
After announcing they would abolish 450 jobs and taking taxpayer money? Typical conservative message-to heck with workers and all those 'little people.'
Jack, what did you expect from greedy selfish CEOs.
Soon you will get a wonderful explanation that it was necessary to keep these wonderful talents happy.
I'm extremely outraged about it this! I have 6 family members out of a job. I have SO many friends who are laid off in my small town due to the failing economy. There are no jobs to be had.... so hearing that a bank who begged for help is throwing lavish parties in the name of advertising is ludicrous! I believe there needs to be more strick outlines for companies recieving bailout assistance. Sponsorship should not be one of them!
If you or I went to a bank and asked for a loan to buy a house, but bought 2 Maseratis instead, the bank would recall the loan. The government gave the banks TARP funds to get the flow of credit moving again.
Since the funds are used for parties instead of business incentive, let us, the taxpayers, recall the loans from those banks.
It is time the proletariet rose up in the United States and struck down the bourgeoisie.
If the bank is healthy... why did they get 1.6 Billion in the first place?
What did you expect, Jack? When you give carte blanche in the form of free money, it gets spent. We don't tell them how to spend it; we don't fire their execs. We wave our arms and send curt letters, but America's profligate kings aren't getting the message. These are only further symptoms of the ailing state of our economy and its undisciplined arrogance prompted by too many years of deregulation euphoria and madcap greed.
What do banks do, really....they don't actually DO anything.
Dear Jack, need your help, were they forced to take TARP money??
Ok – if they got the $1.6 Billion from the Bush people as a smokescreen for the banks in real trouble-why don't they pay it all back? If they didn't need it, give it back and we can keep that amount from being part of the deficit. Then they can lavish their people, stockholders and customers all they want with no questions. But if the taxpayers have added to their bottomline, they have a right to know what they are spending on. They could just invite us all to the party!
We need to send any bank officials receiving government support through basic social skill classes. You don't borrow money from a starving man, buy a steak, and then eat it in front of him. Nuf said.
B. T Palmer
Saint Peters, Missouri
If these banks are throwing all these multi-million dollar parties, how come we aren't invited? At least some of our money went toward these parties so we deserve some of the food, the booze, and the music offered there, too.
Simon
Fullerton, CA
Jack,
How can anyone fault a privately run organization for having a party?
If they didn't want the TARP, they have a great reason to party. They are profitable.
Jack,
I wonder if John Kerry and Congress will also tell people taking bail outs on their mortages not to go to Starbucks or have an evening out? Once government is in our business's business then you will see a mess. One only has to look at our deficits and at trips Senators and Congressmen and women take to see how deep their concern about usless spending of taxpayer money actually is!!!!!
The message is "let them eat our crumbs... give me more..."
What is this noise about "the goverment made us take it"?
sounds like rubbish to me.
Where can I get my TARP funds? I need to loan my family some money please!
It means that they are morally bankrupt. If I was defaulting on my house, that I unwisely bought beyond my means, prompting the government to bail me out, would it then be OK for me to take a trip to the caribbean? After all I am not using the bailout money, I am using the money I earn from my job.
The wording of Mr. Caffterty's question implies a socialist bias.
Question: What message does it send when a bank that got $1.6 billion in bailout money throws lavish dinners, parties, and concerts?
It shows me that the government has no idea what it takes to run a successful financial institution, or any other form of business-for-profit. Businesses use golf outings, concerts, parties, etc., as a form of marketing to incentivise employees and/or customers. If such activities did not tend to increase overall profits, companies would not use them.
This also shows me why it will be a disaster if the Federal Government ever starts nationalizing the banks. Politicians do not know how to make a profit in the financial or any other sector of private industry. Banks nationalized by the Federal Government will only survive with constant infusions of capitol from American taxpayers.
This is beside the point that nationalization means *theft*.
–Dan Edge
Actually Jack, it was a great party. Plenty of fine wine, nice accommodations, and great entertainment. Sorry you couldn't be there. It was your money too that allowed them to have it so you all should have been there!
It sends the message that they just don't "get it". Accepting bailout money means you're broke. Laying off people means you are broke and still losing money. Any responsible CEO should understand there is nothing to celebrate.
Spending whatever Northern Trust on those events doesn't seem like a prudent use of funds, especially when the government (to be read: your taxes and mine) are propping the bank up.
However the questions that need to be asked are:
1. When the contracts for this outing were signed?
2. What (if any) penalties would the bank have faced if they cancelled?
3. Would the bank have been pilloried in the media as being a "deadbeat bank" had they cancelled and renegged on those contracts?
I know that some of these corporate outings are (and have to be) planned months (if not years) in advance. What I don't know is if any of the contracted parties would have been okay with a last-minute cancellation, and not looked for anything in return. My guess is that they wouldn't have been okay, and would have looked for their just compensation. I would also speculate that, had the bank cancelled it all, the media would have been on their case for pulling the plug.
It sends the message, thet we got the world by the tail and you can't do a thing to stop us. Jerry/ Iowa
In the case of Northern Trust, it’s not only the parties that say “we don’t care about you, the average citizen”, it is the audacious statement that they didn’t want the $1.6 billion in the first place. If they don’t want it, give it BACK! The government could certainly find a bank that does want the money and will put it to use in the economy. And to all taxpayers who deal with Northern Trust, consider moving your business.
"Anything goes!" is the message.
Dear Mr. Cafferty-
Since the banks did not ask for the bail out money that they were given why don't they return it? It would be better used to build a new school in a location away from the train tracks for the young lady who wrote the President asking for assistance, since her class sessions are disrupted by passing trains approximately six times daily. It is obvious some banks has a surplus on hand that they are either holding on to and won't give loans, or they would rather splurge it for good times sake. Unfortunately, the banks are still charging most of us late and over draft fees, so they don't give a hoot who is in a recession as long as they are not experiencing the recession. Take the bail out money away from this bank and from anyone else who does not need it. I am loosing my home and need a bail out but no one is paying attention to my needs. My tax dollars should be helping me and not the banks that are screwing consumers.
I'm glad my Firm hasn't received any bailout money. It would be hard to try to solicit million dollar clients by taking them to McDonalds for dinner.
Yet another outrageous insult to the hard working Americans that are providing funds to bail these greedy, spoiled jerks out. They say they didn't ask for bailout money, yet they did not turn it down. They just don't get it and I am shocked and dismayed at Sheryl Crow for being a part of this travesty. She was a supporter of President Obama and speaks out about the past mistakes, yet she takes part in one of the most audacious injustices to the American people and got paid to do so. Her credibility is in the garbage can as far as I'm concerned along with all her albums. I for one, will never listen to another piece of her music and will circulate this message around. Hipocrisy abounds!
It could mean only one thing Jack; it's time to rebuild the "wall" that is the namesake of the now infamous Wall street but build it a lot higher this time. The four legged pigs that the wall was originally designed to keep off of the stock market floor have now been replaced by a two legged strain that must be done away with ASAP.
The new wall could then represent real regulatory policy.
DRUMROLL PLEASE........this bank is the bank that holds obama's mortgage...here we go again. Obama can't get away from his shady past
Why not take the 1.6 billion and pay off those insanely granted mortgages. Bet the money spent on that party would have paid the salaries of those 450 employees facing redundancy, for years.
This is a profitable bank. They sponsored the tournament as a marketing and advertising campaign, which is a legitimate business expense. Big clients, big money. What's the problem? As previously reported on CNN.com, Northern Trust did not even ask for the money – the government asked them to participate in TARP. Why don't we all write a letter and ask Barney Frank and John Kerry to pay back the taxpayers for the pork they put in the stimulus bill?
It shows they just do not get it. These same people collude with Congress in an attempt to do away with the minimum wage and unions then turn around, take our tax dollars and pay themselves aggregious salaries, it borders on treason...a hanging offense in the USA.
It's no wonder opinion polls show the public's general reluctance to bailout financial institutions. It was irresponsibility that got them into this mess. No amount of bailout money is going cause banks to suddenly become responsible, as this latest incident clearly shows.
I've always wondered why the CNN web-site had Politics, Crime and Entertainment right next to each other.
With the headlines these days you might be able to combine all three!
If anyone knew about this type of expenditure, you would know that this a normal routine for banks/investment companies alike. Takes money to make money, along with implementing heavy marketing/retreats/luncheons, etc to win and keep your clients.
Jack,
This is the same immoral corporate behavior that for the past 25 years has cost the middle class jobs and increased the space between the "haves" and the "have knots. Cutting jobs for personal elitist profit is just wrong and will cost the republican right in the end because they are morally bankrupt for supporting it. If this country wants to create jobs this behavior must be outlawed.
It just means they didn't need bailout money.
I would agree to have the bank pay back the government the amount they spent on the golf event including airfares and Hotel costs and dinners. This is the height of irresponsibility. This makes me think the management should be looking for another job. They must think all tax payers are stupid.
Bill Maher had it right last Friday. It's time to start jailing these scum: real felony convictions and real sentences in real prisons.
Oh yeah, we also need to start civil proceedings to take back all of their bonus money to help repay the taxpayers.
Instead of irresponsible golf sponsorships, they should sponsor the bank fees they charge customers and non-customers that use their bank and services, when ATM fees are out of control $3+ per transaction. Everyone is hurting.. ..cut back on those costs.. ... they don't get it... GREED and Self Indulgence!!!
If Congress really wants to get picky, let them complain about all the parties, junkets and campaign contributions they get for throwing away billions of our tax dollars on earmarks and special interest legislation.
Bernie
Lowell, MA
The only message that we the people must recognize is that Capitalism likewise Humanity is far from perfect... Therefore, “God Bless America”!
Make them prove that they didn't use the bailout money to run the event and instead used their own cash flow. If that claim is true then the government should allow them to repay the loan and the Bank should be held up as a sign that all is not lost in our nation's financial system.
I have no doubt this bank required the services of Sheryl Crow and Earth, Wind and Fire to continue banking and maintaining it's constituents. Sure, I can't afford to go see Sheryl Crow but if I open an account I could possibly get flown in, put up in a nice hotel and I get a gift bag from Tiffany's to boot. A number of the bailout banks have done this so I'm sure they needed to in order to continue banking. (Dripping with sarcasm)
The scary thing about this type of news is that greed seems to be rampant and getting worse, if that is possible. Are these guys seriously looking for ways to fix where they have apparently made wrong decisions? I haven't seen any good results thus far. Greed begets greed.
How do you look 450 people in the eye when you lay them off while spending this kind of money. The leaders of these banks have lost their f***ing minds!!! i hate to say this but these greedy people have raped this country. How do they sleep at night knowing that those monies could have employed folks and kept them in their homes. Will they tell us to eat cake also?
I want to know more about these banks' bookkeeping.
Did the reasoning run something like this (generic example):
The bank is spending $1 billion to fund X bank-saving program.
The bank takes TARP money and uses it to fund X program instead of it's own money.
This then frees up the bank's money to be spent on such lavish parties, while still letting the bank claim they didn't spend any taxpayer money and only their own.
If it's this kind of shady shifting-around of resources, then these banks are playing the government and American taxpayers like ignorant fools.
Lavish entertaining done in the name of business is part of a culture I would like to see changed. Whether it's with stockholders' funds, depositers' funds, or taxpayers' funds, people who aren't invited to the party shouldn't have to pay for it.
Their spending and your notice might just be the old line "it doesn't matter what you say as long as you spell my name correctly" when it comes to advertising it could be money well spent.
Nationalizing the banks will do nothing because the government is even more wasteful than the financial institutions.
The fox guarding the henhouse.
Lets think for a moment! Would you give your 18 year old son $50,000.00 in cash and tell him that this the money for college and the future and that is all. This is the same situation with this bank, they got some extra money they didn't need and said "What the heck, lets party"! It is totally ridiculous and shows irresponsibility on the bank to act this way while thousand of people don't even know where there next meal is coming from.
From Fort Worth, TX:
The same message that Obama and congress sent when they attended the retreat to talk business. What is wrong with the D.C. facilities for talking business?
You fail to disclose the purpose of the parties. If its just partying to have a party – thats wasteful. But parties and event may held for other purposes. Sales reps are rewarded as a part of their compensation for reaching certain quotas. If a party is held to woo new customers, then the party is considered advertising. Advertising is not only not wasteful, its mandatory if you want to stay in business. Businesses that fail to advertise during tough times usually have the most difficulty recovering. I can not judge these particular individuals based on the provided information.
They're going to lay off over 400 employees to make up the difference.
It says to me that no banks should be forced to accept government bailout monies.
It says to me that there is nothing the government can do to stop the partying.
It says that apparently Illinois is the most corrupt state in the Union.
It says to me, "Why in heck do I bother paying back credit card debt? These banks don't need the money!"
And people are surprised at this? Why? This is nothing more than the haves and the have nots with the haves policing the actions. The last 8 years have buried decency and accountability so why is anyone at this point shocked.
if the bank accepted the TARP money at the government's request, they did not want or need it, then they should have the right to conduct business as they see fit. As long as the TARP funds weren't used. They probably want to pay it back but the govt won't accept it
My favorite quote: "He added that their “normal cash flow” — and not TARP funds — paid for the event."
This whole thing is insane. Obama needs to quote Mike Tyson "I want your heart. I want to eat your children. Praise be to Allah."
Why don't we just give every tax payer $20,000 and tell them it must go to debt? If you have no debt then you spend it or save it. That would be real economic stimulus and would reduce principal balances, which would lead to less foreclosures and stronger assets on the banks.
These banks are in the business of attracting investment by enticing the wealthiest people in the country. You don't entice the wealthy by calling them and having a conversation. You entice them by serving the best food, having a crazy party, and then giving them the pitch once they are well fed, a little tipsy, and comfortable with giving over their wealth to the host so they might make a profit.
If you don't like this then you don't like Capitalism. It really is that simple. That's the reality.
What it says is that the corporate culture is beyond redemption. These banks are throwing these parties not because they're totally oblivious, not because they're mocking us taxpayers, but because in the corporate world, this is what you need to do to gain clients. And since its heresy to ever question the necessity of free market capitalism with our current corporate model, I'll refrain from doing so.
So let the banks throw their parties for their corporate buddies. For they do so in the service of god all-mighty the free market, never to be questioned, amen.
To me, it's a disgrace. People in this country are suffering greatly, mostly due to these bankers inability to reel in their incredible greed. The sheer audacity of these Wall Street firms and banks is un-believable. It's time we Americans demand our leaders to be accountable for not only their actions but the actions of corporate America who stuff the wallets of Congressmen. It's time we Americans ask how many of those in office can truly say they adhere to the following:
We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.
That little party could have saved some of those 450 jobs...not all, but a handful is better than none. They are laying off employees and taking bailouts they obviously don't need and we get stuck with the bill at the end of the day. Our Government bailed out these banks with no transparency, no restrictions, no rules and no boundaries. Its time the current administration take charge and create those boundaries immediately. This country is teaching us that being a criminal really does pay the bills and I do not appreciate that level of tolerance. Fight the powers that be!
It shows me that the CEO's of all these large banks need a reality check, they need to be put into the unemployment line to see what it is really like to be an average American trying to take care of his/her family. Unfortunately, our powers to be in Washington will not do anything about it as this is where their re-election contributions come from. For us, we have to suck it up and accept it. I am wondering where I can apply for my government bailout money.
This is how the world does business Jack. If we don't hold meetings, how do people network? How are sales made? If the meetings were just for the execs I would be upset, but this is for customers, vendors, partners and top performers and sales people. The events business is being trashed and I just lost my jog to prove it. Now I will lose my car, my home and so will thousands of other hotel and hospitality industry employees. You sack one industry only to cause irreparable harm to another.
The government really did force this money on the banks. I read a detailed story about in the WSJ at the time. They government won't let them send it back unless they get a private line of credit to replace it. That's almost impossible in this market, and a waste of money since they don't need a line of credit. We never should have passed the TARP in the first place, but since we did, and forced it onto banks, some of whom didn't want it, the blame is on the feds, not the banks.
That there was a great party at the expense of all those people whose annual salary for 2009 paid for it. Way to build your business, Northern Trust!
What I find more aggregious than the fact that the banks are taking money that they admittedly don't need and spending millions on lavish parties, is the fact that the government forced the money on them anyway. Why is the government giving my tax dollars to businesses that don't need it?
What's next? Will the Obama administration start handing out my tax dollars to people to pay off their credit card bills and mortgages despite the fact that they don't need the money and aren't in foreclosure?
The spending was bad enough under Bush. Now it's completely OUT OF CONTROL!!
Why, if the bank spokesperson is correct, did the federal government request they take the $1.6 billion if Northern Trust was healthy? The demand for repayment because of lavish, internal spending is an attempt to redirect blame. Those responsible for handing over a billion plus to an institution that did not need help are to blame for this one. Or, maybe these bankers could not understand they were in trouble and still do not. What a mess.
Who cares what they did with the money? They didn't ask for it. The government, in its infinite wisdom (and greed), forced them to take it in order to maximize profits by lending to a good credit risk. It's none of our business what they do with it if they're forced to take it. That's not a loan, that's more like mafia protection.
I think this is a slap in the face to everybody. They spend lavishly on private parties from their “normal cash flow” and have the nerve to announce 450 job cuts this year. If they have a normal cash flow why the job cuts? I want my money back!!!
If they have any decency and respect for the american public they would not have been so lavish. I heard that the bank's CEO said that the bail out money was not used for the lavish party. That ia bunch of bull. If they are so financially secure they should not have accepted the bailout money and nobody would have questioned them. It is plain wrong.
Reading over these comments is painful. I have never seen such a bunch of absolute idiots in my life. If a bank did not ask for money and the fed made them take it, then we have no right to dictate what they do. The government has been in debt at taxpayers expense for DECADES and they still throw black tie dinners and have multi-million dollar inaugurations with our money. What do we get in return? Where is our money back from them? The only way this government could get any dumber would be to let the average idiot "internet vote" on every issue. Wait,,, that is kind of like this blog.
Jack, you are muckracking.
It says that the banks are as out of touch as Congress. Both spend money in a way they never would at their homes. Congress decides how our health care will work, but they sure aren't subject to it. Congress decides how Social Security can be spent, but they don't have to count on it. The banks hold our money, and spend it however they want...while it is our money.
This is plain and simple poor management.
All the banks and businesses should have been allowed ot fold.
As a country we need new ideas, new banks, new energy, new mobility, and forward thinking. This is what a recession/depression makes mandatory... CHANGE. It doesn't matter that these folks made money for the institutions they work for, if they didn't manage it well enough to maintian their futures, they need to be let go, they are not efficient managers.
We all need to stop thinking about entitlement and start thinking about the future. These managers all failed. Plain and Simple.
At this point, they need to not only pay back, but pay back at a high interest. rate. We all know what happens when we don't plan ahead and consider the future... we all pay extra... sometime lots extra.
I never cease to be amazed at the ignorance of our elected officials or the people of our country. There were several banks who when called to meet with government officials last September told the government point blank, "we don't need your money." But they were told in order for the bailout to work and be accepted, it had to be an 'everyone in' approach. You'd never know from coverage of the financial industry or about the TARP funds that some banks have already begun paying this money back. I know Bank of America made a $400 million payment in the last week or two. People can blather on about the excesses of 'bankers' or executives, Barney Frank and John Kerry can write up angry letters or new legislation, but maybe it's time to start reporting the whole story instead of just reporting the convenient facts.
I've always considered the ivory tower CEOs to be crooks.
To become a CEO you must be a sociopath. How can any person sleep after laying off hundreds of emplyees? CEOs know that being layed off is most likely the worst thing that can happen in anyone’s' life.
How else do explain their shameful behavior towards the employees whom they demand loyalty and long working hours. And for what, to be layed off after years of hard work. These CEOs know better but they choose to do what suites their ‘personal’ agendas and to hell with everyone else. I want to see more of these crooks brought to court and put into prison where all crooks belong. Of course politicians are in cahoots with these crooks. In fact, I really cannot distinqish between a CEO, a politician, or a crook. They are all one in the same to me. The average workers of America are waking up to the nightmare these crooks have created.