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Bailout Bank Blows Millions in L.A.

2/24/2009 2:00 AM PST BY TMZ STAFF

A bank that received $1.6 billion in bailout money just spent a fortune last week in L.A., hosting a series of lavish parties and concerts with famous singers ... and TMZ cameras caught it all.



Northern Trust, a Chicago-based bank, sponsored the Northern Trust Open at the Riviera Country Club in L.A. We're told Northern Trust paid millions to sponsor the PGA event which ended Sunday, but what happened off the golf course is even more shocking.

Northern Trust flew hundreds of clients and employees to L.A. and put many of them up at some of the fanciest and priciest hotels in the city. We're told more than a hundred people were put up at the Beverly Wilshire in Bev Hills, and another hundred stayed at the Loews Santa Monica Beach Hotel. Still more stayed at the Ritz Carlton in Marina Del Rey and others at Casa Del Mar in Santa Monica.

Here are the highlights:

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- Wednesday, Northern Trust hosted a fancy dinner at the Ritz followed by a performance by the group Chicago.

- Thursday, Northern Trust rented a private hangar at the Santa Monica Airport for dinner, followed by a performance by Earth, Wind & Fire.

- Saturday, Northern Trust had the entire House of Blues in West Hollywood shut down for its private party. We got the menu -- guests dined on seared salmon and petite Angus filet. Dinner was followed by a performance by none other than Sheryl Crow.

There was also a fabulous cocktail party at the Loews. And how's this for a nice touch -- female guests at the Chicago concert all got trinkets from....TIFFANY AND CO.


As for what all that costs, well the company isn't talking. We spoke with a rep from the band Chicago who said Northern Trust paid them around $100,000. A House of Blues source told us it cost more than $50,000 to close the joint down last Saturday night. As for Sheryl Crow's fee, her rep didn't get back to us. Earth, Wind & Fire acknowledges payment but won't say how much.

As for the golf tournament, a rep from the PGA told us Northern Trust wrote one big fat check in order to sponsor the event. That check covers part of the $6.3 million purse, the advertising costs for the spots on CBS (which broadcast the final two rounds of the tournament) and operating costs. The rep says the fee was negotiated and is confidential.

Lots of people from Northern Trust went to the golf tourney ... in special Mercedes that shuttled them to and from the hotels. But for those who weren't into golfing, they could spend a few hours at the Northern Trust seminar on the credit crunch.

Now how's this for outrage? Northern Trust laid off 450 workers in December, 4% of its workforce.

Here's what's absolutely amazing -- the United States Government flat out gave Northern Trust the $1.6 billion in bailout money, and the bank didn't even request it!

Northern Trust gave us a statement yesterday before going total radio silence. A rep for the bank acknowledges they paid for the events, but that the bailout money did not pay for the events. He claims it was paid out of the bank's operating expenses. Here's Northern Trust's full statement to us.

Perhaps we're missing something, but money is money. How can they spend like this when they're using taxpayer's money, whether they asked for it or not? And where the hell is Congress in all of this? Is there any oversight or accountability?

Your tax dollars, hard at work. Thomas Jefferson was right -- "A little rebellion now and then is a good thing."

COMMENTS

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1.

Jarvis    

It shocks me that TMZ was all in love over Obama and now look at the treatment, this is awesome, if only more people would open there eyes!

1877 days ago
2.

jewel    

everyone thinks obama is so great!! Look how he's spending your money. creating jobs for cheryl crow and chicago!!

1877 days ago
3.

Ohdoctah    

The first two people to comment on this are dumb. Bank Money is BUSH money as President Obama has yet to give out money! Thats Just number one. and Secondly all politicians are puppets and are going to run the American dollar into the ground, to make way for the Amero! Have a great day!

1877 days ago
4.

Diane    

First off Obama is not to blame for the outrageous spending. It is the company officers that approve this crap. How can Obama watch over thousands of companies and run the U.S. also. THE COMPANIES ARE TO BLAME.

1877 days ago
5.

Diane    

First off Obama is not to blame for the outrageous spending. It is the company officers that approve this crap. How can Obama watch over thousands of companies and run the U.S. also. THE COMPANIES ARE TO BLAME. Spoiled rich folks that are not going to give up their way of living unless they are put behind bars for spending company money on anything besides the company. It happens in ALL companies big and small. And the employees are the ones that suffer without raises while the officers continue to give themselves everything. The rich get richer and the poor get poorer. It's never going to change I don't care if there is a Republican or Democrat president, they don't know what is going on behind the scenes at all the companies in the U.S. They are not Superman! IT'S THE COMPANY OFFICERS!!!!

1877 days ago
6.

HarvardRaza    

Congress is feeding the dying. This country, and our Superhero President think feeding money to terminal vacuums, is a good move. It's your money. It's my money. We are helping companies that FAILED FOR A REASON! They based themselves fully on panthom profits, and collected BILLIONS in profits when times were good. Why not ask the Executive Board members to return 25% of their last 10 year's profits? America has truly become stupified with its desperate cry for change. Change is one thing, corporate welfare dependency makes us plain STUPID. 4 more years of this crap!

1877 days ago
7.

anonymous    

Hey geniuses, Guess what? Northern Trust didn't even want the government money. But now they're supposed to run their business differently because they were essentially forced to take it? How does that make any sense? They've made money every year for I don't know how long. They're not like other banks who did all kind of things that have now come back to result in huge losses. Heck, given that retroactive provision in the stimulus bill which limits pay of employees of any company that takes government money that Dodd stuck in at the last minute, I wouldn't be surprised if Northern Trust gives the money back right quick. All in all, very stupid article written by someone with no understanding of the current situation.

1877 days ago
8.

Jellybean    

FU Obama and Congress!

1877 days ago
9.

Jellybean    

F U Obama and Congress

1877 days ago
10.

Jafo1138    

THIS IS AN OUTRAGE! Stop giving them money... OUR MONEY!!!!!!!!!!!!!


HARVEY - CAN WE SUE THEM?

1877 days ago
11.

Jafo1138    

I WANT JUSTICE!!!!!!!!!!!!!! I AM MAD!

1877 days ago
12.

jstv    

#8 you are on track. if anyone of you read the statement from Northern Trust, they have been able to give money through the LAJCC for all the charity organzations they run which are many.
Frankly a bank like Northern trust does not depend on our type of banking for thier longevity. If the government forces them to take money, it's only for governmental control of all banking.

1877 days ago
13.

bjb    

I believe there is one important issue embedded in this article which many are either not picking up on or ignoring outright. and there is somthing most of you probably don't now.

First the embedded issue; Northern Trust did not seek help from the Federal Government. The Feds wanted shares in banks that were both in need of help, and those such as Northern Trust which are still doing well.

The thing about Northern Trust Bank that most do not know. This is one of the stoggiest old money banks around. They have handled my families trust for decades and though we've seen ups as well as downs over the years, Northern Trust has always come through and always made us money. Northern Trust isn't the type of bank to jump on fads in the market such as the tech boom in the late 90's. They invest conservatively and return smaller but solid returns for their clients. Becuse of this conservative approach, they did not get caught up in the mortgage meltdown like some of the larger more popular banks, they could plainly see the writing on the wall. They knew it was a bubble and would blow up one day.

So, Northern Trust Bank was just doing what Northern Trust Bank has done all along, and that is to provide great service to the few that can afford to bank there.

Trust me, if you ever come into money, this is the bank you want to talk to!

1877 days ago
14.

Ex-Chicagoan    

o.k. say Northern Trust did not ask for the money. But why are they laying off 450 people AND THEN giving jobs to Chicago, Earth, Wind and Fire and Cheryl Crow and having a big bash in LA. If the money came out of an expense fund from Northern Trust, then why didn't they put that money back into the payroll account and keep the 450 people working? Shame on you Chicago, Earth, Wind and Fire and Cheryl Crow for taking such a gig without your managers checking this out. The red flag should have been that this was a "bank" entitiy. They are laying people off and getting bailouts. And how could their fellow employees go on such an excursion knowing these 450 had been laid-off?

1877 days ago
15.

BobD    

orhtern Trust didn't ask for the money and since when do we run our country"s business. Think about the business that went to the hotels, reataurants, airlines etc. which fuels the economy. Isn't that the idea?????? Barney Frank should be embarassed based on his role in perpetuating the disaster at Fannie Mae and Freddie Mac. And what about the Democrats retreat to a Virginia resort a few weeks ago. Thinks they paid for that out of their own pockets? Did Pelosie fly commercial back to SF or take her taxpayer provided private jet. Let's get real people!

1877 days ago
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