Politics

Financial Services Democrats Call on Northern Trust to Repay TARP Funds

By Karina

The Chicago Tribune reports:

Northern Trust Corp., which in November received about $1.5 billion as part of the U.S. Treasury Department’s Troubled Asset Relief Program, defended Tuesday its wining and dining of clients during the recent Northern Trust Open in California.

Entertainment Web site TMZ.com on Tuesday reported that Northern flew hundreds of clients and workers to California and put some of them up at ritzy hotels, including the Ritz Carlton in the Los Angeles area, and entertained them with such groups as Chicago, Earth Wind & Fire and Sheryl Crow.

Today, House Financial Services Committee Chairman Barney Frank and 17 Committee Democrats sent a letter to Frederick H. Waddell, the President and CEO of Northern Trust insisting that Northern Trust ?immediately return to the federal government the equivalent of what Northern Trust frittered away on these lavish events.?

Text of the letter:

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.

Sincerely,

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

Full post as published by The Gavel on February 24, 2009 (boomark / email).