Bank that got bailout $ throws lavish parties?

February 25, 2009 by  
Filed under Local News, National News, Top Stories

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.

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.

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