U.S. lawmakers have verbally reprimanded yet another U.S. bank that accepted federal bailout money for what they've called "extravagant spending practices." This time, the bank in question is Chicago-based Northern Trust Bank, which entertainment Web site TMZ.com said sponsored a golf tournament last week in Los Angeles, for which it flew hundreds of clients and employees to California, where it paid for them to stay in luxury hotels and enjoy entertainment from the likes of Chicago, Sheryl Crow and Earth, Wind & Fire.
"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 [from the federal government]," Rep. Barney Frank (D-Mass.) wrote in a letter to Northern Trust CEO Frederick H. Waddell, according to The New York Times. "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."
Fellow Massachusetts lawmaker Sen. John Kerry echoed Frank. "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," he said in a prepared statement. "Some companies clearly need a reality check to get their priorities straight so taxpayer money is used to get their house in order and not to pay for lavish parties."
Other banks under fire recently for accepting government assistance, and then holding meetings and other events, include Wells Fargo and AIG, both of which have been criticized by Congress and by the media for moving forward with so-called "junkets" for customers, employees and executives.
Responding to public concern, Northern Trust has defended its golf tournament sponsorship—as well as associated events—as valuable and necessary marketing activities. "The reason Northern Trust sponsors the Open is it's an integral part of its marketing program," a spokesperson told The Chicago Tribune. "It's about client relationships and showing appreciation for clients."
Like AIG and Wells Fargo, Northern Trust said that its events were paid for using normal operating revenues, and not with taxpayer funds.
The meetings industry has been swift to react against public criticism of legitimate meetings and events, held for practical marketing, training and incentive purposes.
"We agree that companies receiving federal assistance must be accountable to taxpayers for responsibly using public funds," U.S. Travel Association President and CEO Roger Dow said yesterday in a statement. "But, we are perilously close to falling into a witch-hunt mentality in which working Americans are unfairly punished. For every case of wasteful spending, we are seeing scores of instances in which the game of 'gotcha' has forced businesses to cancel legitimate activities that would have grown their bottom lines and generated jobs and economic growth for local communities."
In order to help companies and governments separate legitimate meetings and events from wasteful ones, the U.S. Travel Association and other meetings industry groups have collaborated in order to produce a set of guidelines for the use of meetings and events by recipients of emergency government assistance.
"Policymakers must realize that meetings and events are the lifeblood of local communities across the country," Dow continued, pointing out that meetings and events are responsible for 15 percent of all travel and create more than $100 billion in spending and $16 billion in tax revenue. "It is critical to protect legitimate travel spending and the millions of American jobs it creates."