The Loop

Northern Trust draws ire of Congress

February 24, 2009

The Northern Trust Open, in less turbulent times, would have attracted no attention beyond the world of golf. Instead, it apparently has some in Congress stewing over its lavish spending in sponsoring the tournament, according to the entertainment news website TMZ.

"A bank that received $1.6 billion in bailout money just spent a fortune last week in L.A. hosting a series of lavish parties and concerts with famous singers," the TMZ story begins. It cited concerts by Chicago, Earth, Wind and Fire and Sheryl Crow as part of its corporate hospitality for the week.

TMZ said that Massachusetts congressman Barney Frank told it that he's sending a letter to Northern Trust demanding it reimburse the government for the cost of the parties and concerts and that it return the $1.6 billion bailout money.

"Frank also scoffed at the boondoggle, saying Northern Trust should have spent that money making loans and stimulating the economy," the website wrote. "He called the Northern Trust Open an 'ego thing' that has nothing to do with good business.

"Senator John Kerry also weighed in on TMZ's story, calling Northern Trust's L.A. extravaganza 'disgusting and stupid and pathetic.'"

Northern Trust's response to TMZ is here.

UPDATE: Reuters has this regarding Kerry's anger at Northern Trust: "I'm sick and tired of picking up the newspaper and reading about another idiotic abuse of taxpayer money, while our country is on the brink."

UPDATE II: Here's an Associated Press account that features this letter from Barney Frank (and signed by 18 Democrats on the Financial Services Committee) to Northern Trust President and CEO Frederick Waddell: "We insist that you immediately return to the federal government the equivalent of what Northern Trust frittered away on these lavish events. 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."

-- John Strege