Bailout Bank Blows Millions Partying in LA

[chefdennis]

You Government (and Bush is as guilty of providing this as Barry) given Tax dollars at work...

So this wasn't exactly the place I thought I would see a news story like this, but hey maybe it will let a few more see how much BS is going on with this whole "bailout" shzt.


Bailout Bank Blows Millions Partying in LA


TMZ.com

Posted Feb 24th 2009 12:30AM by TMZ Staff

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 ... and TMZ cameras caught it all.

Northern Trust, a Chicago-based bank, sponsored the Northern Trust Open at the Riviera Country Club in L.A. We're told Northern Trust paid millions to sponsor the PGA event which ended Sunday, but what happened off the golf course is even more shocking.

Northern Trust flew hundreds of clients and employees to L.A. and put many of them up at some of the fanciest and priciest hotels in the city. We're told more than a hundred people were put up at the Beverly Wilshire in Bev Hills, and another hundred stayed at the Loews Santa Monica Beach Hotel. Still more stayed at the Ritz Carlton in Marina Del Rey and others at Casa Del Mar in Santa Monica.

Here are the highlights:


- 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 ****tail 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.

As for what all that costs, well the company isn't talking. We spoke with a rep from the band Chicago who said Northern Trust paid them around $100,000. A House of Blues source told us it cost more than $50,000 to close the joint down last Saturday night. As for Sheryl Crow's fee, her rep didn't get back to us. Earth, Wind & Fire acknowledges payment but won't say how much.

As for the golf tournament, a rep from the PGA told us Northern Trust wrote one big fat check in order to sponsor the event. That check covers part of the $6.3 million purse, the advertising costs for the spots on CBS (which broadcast the final two rounds of the tournament) and operating costs. The rep says the fee was negotiated and is confidential.

Lots of people from Northern Trust went to the golf tourney ... in special Mercedes that shuttled them to and from the hotels. But for those who weren't into golfing, they could spend a few hours at the Northern Trust seminar on the credit crunch.

Now how's this for outrage? Northern Trust laid off 450 workers in December, 4% of its workforce.

Here's what's absolutely amazing -- the United States Government flat out gave Northern Trust the $1.6 billion in bailout money, and the bank didn't even request it!

Northern Trust gave us a statement yesterday before going total radio silence. A rep for the bank acknowledges they paid for the events, but that the bailout money did not pay for the events. He claims it was paid out of the bank's operating expenses. Here's Northern Trust's full statement to us.

Perhaps we're missing something, but money is money. How can they spend like this when they're using taxpayer's money, whether they asked for it or not? And where the hell is Congress in all of this? Is there any oversight or accountability?

Your tax dollars, hard at work. Thomas Jefferson was right -- "A little rebellion now and then is a good thing."
."

 

[Turtle]

Man, it's like TMZ just discovered the concept of corporate sponsorship of PGA events. Maybe someone should tell them about the PGA Tour schedule so they can be just as shocked when they invade the Buick Invitational, or the Wachovia Championship, or the Zurich Classic, or the AT&T National, or, well, the list goes on and on. The lavish parties go on at all of these events, and are almost always in conjunction with seminars, like the financial seminars that took place at the Northern Trust "parties". Seminars and sales pitches for clients, dinner and a concert, it's nothing new.

Trying to form a dastardly link between bailout money, lavish parties and a bank that didn't ask for any bailout money is naive at best. Some of the banks that got bailout money actually needed the bailout, but all major banks in the US were asked by the Treasury to participate, even the most healthy of banks like Northern Trust. It's not just here's the cash, now go nuts, it's literally a stock and warrants program (which is why it's called the Capital Purchase Program, and not the Bailout Program). Northern Trust issued $1.6 billion in preferred stock to the Treasury, and in return for the taxpayer's investment, Northern Trust pays something like $20 million a quarter back to the Treasury. This is done so healthy banks that can help the entire banking system with liquiditiy concerns.

The TMZ story and its accompanying outrage is much ado about nothing. Northern Trust has an annual net income of more than half a billion dollars. So when you say something like Your Tax Dollars At Work, and then try and apply it here, it's way off the mark. Not even close. There are, I'm sure, going to be some institutions that frivously blow some bailout money, but that's not what took place at the Northern Trust Open.

 

[chefdennis]

BS!! Whle they didn't ask for it, they took it. Itis on their buttom line and they are using it. Please tell me which dollar went where...Yes corperate sponsorship is alive and well and will continue, but the fact is they are sitting on millions in taxpayer dollars no matter if they asked for it or not, they still got it....

If they don't need it , want it, then simply setup a repayment plan and give it back ASAP, JP Morgan is working to raise the private capital so they can repay the money they took, so so can these guys...but nope, they are using money from their button line to sponsor PGA golf outings..... sorry it just doesn't look good or sit well, and if it isn't a concern for them, why the news blackout after they were asked about it.....?

 

[Turtle]

It's not BS, and if you understood the first thing about all this you'd know that. Unless by BS, you mean Britney Spears, since you seem to be getting hard news from TMZ these days.

Yes, it's on their bottom line, and yes, they are using it, but you have no idea how they are using it, you're just assuming stuff. Same as TMZ when they ask the question, "How can they spend like this when they're using taxpayer's money, whether they asked for it or not?" That's a logic that says anyone who took any bailout money, for any reason, must cease and desist any and all advertising. That's just stupid.

Northern Trust didn't need it, to be sure, but it wasn't given to them for anything other than the overall need of the banking industry's liquidity issues, where more money is available for loans, to private individuals, businesses, and to other banks.

You want them to pay it back, or rather give it all back all at once, probably (or not even have taken it in the first place), but it's the healthy banks that can support the whole bailout mess. So while they didn't need it, the bailout did, otherwise every penny of the bailout money could have just as easily been flushed down the toilet for all the good it would have done. A recapitalization of healthy banks is absolutely critical to the success of the bailouts for the banks that actually need the bailout.

You want them to pay it back, yet that's precisely what they are doing, in the form of dividends, to the tune of $20 million a quarter (a little less than that, actually). It's nearly $80 million a year. The government is being paid back, with interest and dividends, so the taxpayers are making a profit from it. And you're upset with this because.......?

And no, they are not using money from their bottom line to sponsor PGA golf outings. Do you even know the basics of the basics of advertising and advertising budgets, how they work? I'm guessing no. Their bottom line is after the expenditures for the PGA Tour sponsorship, expenditures which were probably accounted for, in full, 2 years ago when they signed the 5-year contract to sponsor the Northern Trust event.

"and if it isn't a concern for them, why the news blackout after they were asked about it.....?"

Was there a news blackout? Or did they issue their statement to TMZ and that's all they had to say to TMZ on the matter? TMZ obviously doesn't understand the whole bailout thing, nor do banks like Northern Trust have to answer to seat-of-their-pants organizations like TMZ, so that they got any kind of statement from Nortern Trust at all is above and beyond the call of duty.

If it doesn't look good or sit well, it's because those looking don't know what the heck theyr'e looking at. It reminds me of those who think that when they see a television commercial, that they are paying for part of that commercial when they buy the product, as if the cost of the commercial is somehow added into the purchase price. Too funny.

 

[chefdennis]

Yes i understand adverting budgets, i have used them for over 20 yrs. and yes it comes off the GROSS income and is a chargeable against that income.

I don't care of it was TMZ or the MSNBC that printed it, that fact is they are usong taxpayer funds, in one form or another while also spending money to sponsor a PGA golf tournament. I don't give a **** when they signed the contract, as long as they are holding taxpayer funds form the BAILOUT they either pay back the taxpayers because they didn't need it, or they are spending it, you can't prove they didn't use it and i can't prove they did, but as long as they hold the money they hold it seperate and show it away form their gross. That way they can say. "we didn't want it, we aren't touching it"...not even to pay dividends.

And in case you haven't notice, I am for the banks that are taking these handout as well as the auto companies that are taking them FAILING!!! Since this bank didn't need the money or want the money, they would be ok, but those that have their hand out, screw them, let them fail......This country has survived bank failures in the past, you might recalled the RTC in the 90's taking over banks that failed and selling them off or closing them...PZZ on handing them buckets of taxpayer money time and again (AIG is looking for money for the 3rd time) let them fail....

Oh and if you think the cost of advertising is figured into the price of a product, you don't know anything about advertising....in a simplistic example, everytime i buy ad space for my cheffing business, i increase my fees. When i managed automotive dealerships, every car and truck we sold had a "adverting" fee built into the cost to cover advertising purchases......be it newsprin, radio, or TV...the customer paid for it in the purchase price, not 100% no ,but a portion, yes....

PS: If they let the banks and industries that are taking the bailouts fail and after those that reorganize hire people back, those that don't reorganize and those that don't have jobs, oh well, and if they all die from straving to death, I am not going to lose a moment of sleep over it, yeap i'll say thats too bad, but then dispatch will call with a load, and i'll take it, turn the XM on that list to "Brian and the Judge" and those people will be gone from my simple little mind......

 

[Moot]

Chef, take a break and a brief history lesson. Study the Bush years, especially his first 6 months. How did the media and the Left treat him? Do you see any parallels between then and now? Does the stuff you have been posting about Obama resemble the Left's attempt to link any absurd thing to Bush they could?

Think about it and what it did for Bush!

 

[chefdennis]

Moot, i totally understand your point, and the result of what affects the stuff the left did too bush is nothing more then subjective... some will say it did nothing because bush didn't let it bother him and he for the most part didn't defended himself against their attacks and other will say it took a toll and all you have to do is look at his poll numbers. For me, it made no difference at all, while i voted for bush both times, because he was simply the lesser of the evils available, i didn't agree with much of what he did other then his war policy, you see i have no problem with the U.S. being at war whenever we deem it necessary. Now his domestic policies and spending, i had big issues with, but it is what it is.

As for Barry, He is a worthless POS that has nothing more in mind then to destroy this country. History and what the left did makes no difference to me, Barry has mine and more then a few others attention and slinging as much as i can onto him is fine with me. It like when the left sayes "its for the kids" and "if it saves one child", same thing, if it brings one Barry supporter out of the coma they are in, cool, it if it doesn't oh well, I shared the info, if no one takes it to heart , not my problem, and in their eyes, it won't be theirs either......I will say this, i am seriously looking for civil unrest in our streets sooner then later, and you can bet it will all fall onto Barrys shoulders...you will see the blood of patriots and tyrants in the streets, just as Thomas Jefferson said, many yrs ago.....

 

[Pilgrim]

It's not unheard of for companies to cancel sponsorships:

"The PGA Tour Inc. has filed suit against Ginn Development Company LLC for breaching a multi-year tournament sponsorship contract.
The suit, filed Jan. 30 in Flagler County, alleges that after agreeing to serve as tournament organizer and title sponsor, which included providing the prize money for two different tournaments through 2011, the Palm Coast-based real estate resort and community development company “has simply announced that it will not be going forward with the additional golf tournaments for which it is obligated"

PGA Tour sues Ginn over canceled tournaments - Jacksonville Business Journal:

It's also not unheard of for companies - financial institutions included - to cut back on expenses at the tournaments they continue to sponsor:

A bigger issue is "ancillary sponsorships," the money that comes from companies who want to entertain clients during the competition.
"Professional golf as we've known it is going to change," said Kym Hougham, who runs the April 30-May 3 Wachovia Championship in Charlotte. "Our expenses won't go down."
Hougham is in the middle of four-year contracts for all his sponsors. He has Mercedes-Benz as an official car, and Wachovia, although bought by Wells Fargo earlier this year, will remain as sponsor. The title will change in 2010.
Goodman said financial institutions, which bought many of the entertainment packages, aren't renewing for next year.
"Their involvement could be worth anything from $5,000 to $30,000," he said. "Counting pro-am packages a tournament could have as many as 100 of these sponsors.
"If you are a financial institution you aren't spending more money on sports hospitality." (emphasis mine)

Buick still on board as PGA Tour sponsor despite financial woes - USATODAY.com

Obviously, there are cutbacks being done by sponsors such as limiting the number of courtesy cars provided, the goodies being handed out and the social events that go on during tournaments. Hospitality tents don't have to be as lavish. Granted, Northern Trust is committed to their sponsorship contract with the PGA but they certainly could have realized considerable savings without Chicago and Earth, Wind & Fire.
In the world of big-time corporate entertainment, last-minute cutbacks happen all the time and that could have easily been implimented at this event - obviously, this wasn't the case. On the other hand, (as mentioned in the above article) some of these events might not have even been sponsored by Northern Trust since there are multiple sponsors involved at the tournaments other than the namesake.

Of course, all this doesn't come out of their bottom-line profits because it's factored in as advertisement, entertainment, etc. before getting to the bottom line. However, the bottom line could certainly be larger if these expenses were reduced - and in the situation of the Northern Trust Open, this was not the case. They should have known they would be a target for bad publicity, especially if there was a hint of involvement with govt. bailout money.

 

[Moot]

Moot, i totally understand your point,

Then why do you continue to post these lame "news articles"?

My point is that the Left tried these very same tactics and they hurt Bush so bad he was elected to a second term. You are so wrapped up in your hatred of Obama that you do more damage to the Right by posting this rubbish.

Think about it!

I'm off to Pittsburg. Kansas that is.

 

[Turtle]

Agreed on all counts, Pilgrim. Northern Trust should have probably cut back a little for PR's sake, but then again, it's their money, and they're one of the stronger banks in spite of the subprime mortgage mess. Their bottom line was extremely healthy last year, with a net operating profit of $641 million. OK, so it might have been $641.3 million without the lavish parties.

In any case, Chef will be delighted to hear that his favorite Congressman, the honorable Barney Frank, has dispatched a letter to Northern Trust demanding they pay the government the same amount they paid for the parties in LA. It's like 401K matching, only different.

He's also requesting that the stop any dividend and interest payments on the $1.6 bil, and return the money. Even though he hasn't a clue what Northern Trust has been using the money for, he said they should have used the bailout money to make loans and stumilate the economy (rather than use it to raise funds for charity and stimulate the economy of LA, I guess).

Other congresspersons have signed the letter, most of them Democrats, I'm sure, 'cause what better political PR stunt can you have than Democrats raking a big bank over a Hollywood party? It's perfect. It shows they have America's interest at heart. They're for the people.

 

[chefdennis]

I guess I don't see factual news as rubbish and yes my hatred for what Barrys POLICIES will are doing and will do to this country is enough that I really don't care what it does to the right. See i voted for clinton both times, right or left, the party makes no difference to me......

PS: I have no use for the Queen of Mortgages... he is one of the reasons for this fannie freddie mess....As for him asking for the money back, they should have never taken the **** money to begin with if they didn't need it. If they were forced to, then use it as it was intended or escrow it until the time they paid it back, keeping it totally seprerate from the Gross income.

PSS: OHH my bad! Its the "Banking Queen" , not the Mortgage Queen, at about the 45 second mark you can hear Barney:

http://www.youtube.com/watch?v=ZwVWXN0Pyq4