Northern Trust sees a sand trap in TARP.
The Chicago-based bank said Friday evening that it would repay the government more than $1.5 billion âas quickly as prudently possibleâ following a hail of criticism from Capitol Hill over its lavish entertainment spending at a golf tournament last week.
In a letter to Representative Barney Frank, Frederick H. Waddell, the bankâs chief executive, defended flying hundreds of its employees and clients to the Northern Trust Open in suburban Los Angeles and providing luxury hotel rooms and entertainment from such performers as Chicago, Sheryl Crow and Earth, Wind & Fire.
He reasserted that the bank did not rely on any government money for the tournament entertainment.
Mr. Waddell contended that entertaining clients fell within the guidelines the bank accepted when it took the money from the Troubled Asset Relief Program, or TARP, in October. But, he said, âwe will redouble our efforts to ensure that these activities are appropriate given the current environment.â
On Tuesday, Mr. Frank, the chairman of the House Financial Services Committee, sent Mr. Waddell a letter demanding that Northern Trust immediately reimburse the government for the cost of the golf tournament and entertainment.
âWe 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,â Mr. Frank wrote in a letter also signed by the 17 other Democratic committee members. âThis behavior demonstrates extraordinary levels of irresponsibility and arrogance.â
In response, Mr. Waddell told Mr. Frank that the bank would repay the TARP money under the new rules set out in President Obamaâs economic stimulus plan. âNorthern Trust has engaged our regulators with the goal of repaying Capital Purchase Program funds as quickly as prudently possible under the new guidelines,â he wrote.
Northern Trust would not be the first bank to return TARP money. That honor belongs Iberiabank in Louisiana, which said late Thursday that it would send $90 million back to the government. There was no word of whether it planned to sponsor a golf tournament.
http://dealbook.blogs.nytimes.com/2...ack-tarp-money-after-golf-dust-up/#more-32943
The Chicago-based bank said Friday evening that it would repay the government more than $1.5 billion âas quickly as prudently possibleâ following a hail of criticism from Capitol Hill over its lavish entertainment spending at a golf tournament last week.
In a letter to Representative Barney Frank, Frederick H. Waddell, the bankâs chief executive, defended flying hundreds of its employees and clients to the Northern Trust Open in suburban Los Angeles and providing luxury hotel rooms and entertainment from such performers as Chicago, Sheryl Crow and Earth, Wind & Fire.
He reasserted that the bank did not rely on any government money for the tournament entertainment.
Mr. Waddell contended that entertaining clients fell within the guidelines the bank accepted when it took the money from the Troubled Asset Relief Program, or TARP, in October. But, he said, âwe will redouble our efforts to ensure that these activities are appropriate given the current environment.â
On Tuesday, Mr. Frank, the chairman of the House Financial Services Committee, sent Mr. Waddell a letter demanding that Northern Trust immediately reimburse the government for the cost of the golf tournament and entertainment.
âWe 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,â Mr. Frank wrote in a letter also signed by the 17 other Democratic committee members. âThis behavior demonstrates extraordinary levels of irresponsibility and arrogance.â
In response, Mr. Waddell told Mr. Frank that the bank would repay the TARP money under the new rules set out in President Obamaâs economic stimulus plan. âNorthern Trust has engaged our regulators with the goal of repaying Capital Purchase Program funds as quickly as prudently possible under the new guidelines,â he wrote.
Northern Trust would not be the first bank to return TARP money. That honor belongs Iberiabank in Louisiana, which said late Thursday that it would send $90 million back to the government. There was no word of whether it planned to sponsor a golf tournament.
http://dealbook.blogs.nytimes.com/2...ack-tarp-money-after-golf-dust-up/#more-32943