Tuesday, February 24, 2009

Barney Frank Demands Immediate Repayment Of Northern Trust Boondoggle Money

Northern Trust is the latest bank to suffer populist anger, choreographed courtesy of Barney Frank, after it was disclosed that they had some serious fun at the taxpayer's expense last week. TMZ via Dealbreaker gave a blow by blow of the festivities that Northern Trust Employees partook in, which included:
  • Wednesday, Northern Trust hosted a fancy dinner at the Ritz followed by a performance by the group Chicago.
  • Thursday, Northern Trust rented a private hangar at the Santa Monica Airport for dinner, followed by a performance by Earth, Wind & Fire.
  • Saturday, Northern Trust had the entire House of Blues in West Hollywood shut down for its private party. We got the menu -- guests dined on seared salmon and petite Angus filet. Dinner was followed by a performance by none other than Sheryl Crow.
  • There was also a fabulous cocktail party at the Loews. And how's this for a nice touch: Female guests at the Chicago concert all got trinkets from ... TIFFANY AND CO.
Barney Frank immediately shot back, and is demanding a full repayment of any and all money that was spent on this spectacular exhibition of horrible PR. It is curious that the government still has to find out about which night clubs its bailoutees frequent by reading the yellow pages.

The letter, in which he expresses his indignation at not having been invited, is below.

Mr. Frederick H. Waddell
President and Chief Executive Officer
Northern Trust
50 South LaSalle
Chicago, IL 60603

Dear Mr. Waddell:

We are dismayed and angered to learn that Northern Trust recently spent millions of dollars on a PGA golf tournament sponsorship and associated parties at the same time it has taken over $1.5 billion in federal stabilization funding under the Troubled Asset Relief Program. According to published media reports, your bank not only sponsored the Northern Trust tournament at the Riviera Country Club, but also hosted clients and employees at places like the Beverly Wilshire and Ritz Carlton hotels and gave away Tiffany souvenirs. If this is accurate, we are demanding you take corrective action.

At a time when millions of homeowners are facing foreclosure, businesses and consumers are in dire need of credit, and the government is trying to keep financial institutions – including yours – alive with billions in taxpayer funds, this behavior demonstrates extraordinary levels of irresponsibility and arrogance.

We insist that you immediately return to the federal government the equivalent of what Northern Trust frittered away on these lavish events. Federal taxpayers should not and will not stand for such abuses, and we will insist that any future Treasury support for Northern Trust be conditioned on a thorough reform of your company’s policies and practices.

We look forward to your reply and immediate reimbursement of these funds.


Reps. Barney Frank, Carolyn Maloney, Brad Sherman, Dennis Moore, Wm Lacy Clay, Stephen F. Lynch, Brad Miller, Al Green, Gwen Moore, Paul W. Hodes, Keith Ellison, Charles Wilson, Bill Foster, Andre Carson, Mary Jo Kilroy, Steve Driehaus, Alan Grayson, Gary Peters Sphere: Related Content
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ChristyACB said...

The only thing those pishers will return is the finger.

No more bucks from my wallet is the only answer I think we really need anymore.

Anonymous said...

worst congress ever

Anonymous said...

Dear Barney,
You first.
Sincerely, Fred

RPB said...

1. Barney Frank should repay his salary to the tax payers

2. How stupid is Northern Trust? This is an abomination. This is along the lines of "let them eat cake" or human chess using peasants. This will not help solve this crisis, this will not help their case. This will only make populist stupidity grow. There was an interesting show on the History Channel last night examining the crime sprees by bank robbers during the Great Depression. They were viewed as Robin Hoods precisely for the same reasons people are angry at the banks now. The age of materialism is over. It is gauche, move on.

Anonymous said...

Hey clueless people of the world...this is what you do when you sponsor a golf tournament - it is part of the deal when you sign up as a sponsor. EVERY sponsor of EVERY pro golf tourney does this. GET A CLUE BEFORE YOU JUMP ON THE MEDIA BANDWAGON!

Unknown said...

These arent all bailouts you pretend to be populist morons, the government forced all the nations banks to take loans in efforts to shore-up their capital bases and prevent a run on the banks which accelerated depressions in years past. Perfectly performing banks like Northern Trust didn't even ask the government for the money. More importantly, the Government, your Government, is making hefty returns on these loans. If you want to keep getting mortgages, credit cards, and car loans, you had all better realize that banks are your friends, not your enemies.

Barney Frank is the worst example of a blowhard hypocrite given he was responsible for oversight of all these banks in years past. Where were his 'concerns' in 2003 while he was being entertained himself by them? In addition, rather than attacking performing banks, work on the actual problem, which are the 800-1000 banks that are about to fail.

As a side note, the Northern/Nissan Open has created more than $50mm in charitable contributions for the Los Angeles community in recent years. If you want to criticize wasteful party spending, focus on the Oscars instead.

GCD said...

It is a shame that many people are quick to negatively judge actions based on insufficient knowledge about the issues/programs they are judging. The capital Purchase program under which Northern Trust received funds is NOT a hand out. It is a means by which a bank may obtain additional capital that allows them to lend. A bank, by Federal law and regulation, can only lend up to an amount that is determined by the “capital” they have. In other words, the more capital they have, the more they can lend. The banks are REQUIRED to pay back the funds and are also required to pay a 5% dividend to the Government (Taxpayers – you & me) the capital received from the Government. In today’s economy, 5% is quite a good return.
It is even a greater shame that many of our elected officials, including Congressman Frank, do not appear to have any idea as to how the program THEY voted for actually works.
The capital provided by the government is in no way associated with operational expenses, or charitable contributions, expensed by the bank. Congressman’ Frank’s assertion, carried to its illogical conclusion, would appear to indicated that any Bank receiving funds under the Capital Purchase Program is no longer able to support their local community through fund raising events or charitable contributions. Additionally, the charitable contributions made as a result of the Golf Tournament Congressman Frank so vehemently criticizes, are made only after the ENTIRE COSTS of the tournament and related activities are paid for. In other words, the tournament made money that was given to charitable organizations. No Taxpayer funds were used at all.
I would suggest that, before coming to any judgments that may lead to accusations of impropriety, or even outright willful misuse of funds, one should check the facts first.