Rep. Wilson, others criticize Obama’s bank

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Charlie Wilson

Staff Report

A group of House Democrats, including Rep. Charlie Wilson of St. Clairsville, wrote a letter chastising Northern Trust bank for using its bailout money for what they call all the wrong reasons.

The Chicago-based bank, which has received more than $1.5 billion in federal stabilization funding under the Troubled Asset Relief Program, recently spent millions to sponsor a PGA golf tournament in Los Angeles, according to information provided by Hillary Wicai Viers, Wilson’s communications director.

Wilson, D-6th, as well as other Democrats on the Financial Services Committee, sent a letter to Northern Trust President Frederick H. Waddell on Feb. 24 demanding that the bank return the amount spent on the upscale events.

The representatives wrote that they were “dismayed and angered” upon hearing of the banks irresponsible spending habits and said, “...We are demanding you take corrective action.”

“We insist that you immediately return to the federal government the equivalent of what Northern Trust frittered away on these lavish events,” the letter read.

“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,” the letter continued.

Reports showed that the bank, which happens to be President Barack Obama’s personal bank, not only spent to sponsor the tournament at the Riviera Country Club, but also placed clients and employees in expensive hotels such as the Beverly Wilshire and the Ritz Carlton, according to the information from Viers.

The Democrats wrote that the bank’s actions showcased levels of “arrogance” in a time when the government is trying to keep financial institutions afloat with billions in tax dollars.

Waddell responded to members of the Financial Services Committee in a letter written Feb. 27, according to the information from Viers.

“We understand this is a time of great anxiety and financial distress, and your question regarding our support of an event such as the Northern Trust Open is legitimate,” Waddell’s letter read.

It continued by stating that the golf tournament raised $50 million for charity and that the “company has been consistently profitable, including net income in 2008 of $795 million — up 9 percent from 2007.”

The bank is still committed to do what is in the best interest of shareholders, clients, employees and taxpayers, Waddell said in the letter.

Waddell ended by stating that the golf tournament did not rely on government bailout funding and would have happened even if the bank had not received any federal money.

After the incident with Northern Trust, Sen. John Kerry, D-Mass., introduced a bill to assure that the institutions receiving bailout money cannot use funds for “hosting, sponsoring, or paying for conferences, holiday parties and entertainment events,” according to tpmdc.talkingpointsmemo.com. If an institution would violate the terms, it would be responsible for repaying part of its government aid, as well as paying a fine.

For more information read the article “House Dems Ask Obama’s Bank to Give Back Bailout Money,” on tpmdc.talkingpointsmemo.com.

The bank’s response is available on www.northerntrust.com.