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Bailout Bank Blows Millions Partying in L.A.

2/24/2009 3:30 PM 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.

Bail out Bank]

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:

Sheryl Crow: Play videoPlay video

- 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.

Tiffany Gift Bag
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.

And 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."

285 COMMENTS

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181.

Kenya    

All I have to say is gosh guys... 450 people are out of a job when this company has the money to keep them employeed. I mean even if they say they didn't use the bailout money it is wose. The fact that they have that kind of money for a party and laid those many people off is so sickening guys. I mean those choose partying over peoples lives. My gosh I am so hurt by this story I don't know what to do.

1981 days ago
182.

Pissed off at Northern Trust bank    

WTF I'm so pissed off these jerks are not even loaning money for refi's or credit consolidation. These guys are partying while the rest of suffer from there mistakes. I'm sitting here unemployed barley paying my rent, car payment and credit card. I'm so sick of this crap from these banks that I'm just ready to stop paying and I think everyone should do the same. We have had it enough is enough.

1981 days ago
183.

Triple Play    

Isn't OBAMA from Chicago. QWow that is shocking news

1981 days ago
184.

Ron    

Does anybody even use rational thought, or do they just repeat what they hear politicians and the media say and assume that it is the truth? There are so many parts to this "story", that are almost laughable, that I can not even get to them all here. but here are some of the top. 1)although making loans does help stimulate the economy, by no means is it the only way to do so. Think about it, this bank rented hundreds of hotel rooms around the LA area, which gives a large revenue boost to the hotels themselves as well as other supporting industries (restaurants, travel-including airlines and local transportation, entertainment, etc.) All of these companies are thus able to retain and pay more employees, and even possibly higher more because they have more revenues to pay salaries from. All this represents millions of $$ flowing into the socal economy from the corporate level down to the individual workers. 2) although they did receive taxpayer money, they still have to operate their company to be as profitable as possible. This is a much different situation than the junkets taken by other banks. This sponsorship, as well as all costs involved, is a calculated marketing event meant to bring in new business...thus strengthening the bank as a whole. Frank saying that the sponsorship is an "ego thing" just goes to show how clueless he is. Do you think a company would invest $10 million+ in an event like this if they weren't confident that they would gain a decent return on the investment. It even says in this article the event was for CLIENTS, as in they are trying to court clients to bring in new business. Do you really think companies spend millions on marketing such as these sponsorships just because they want to throw money away??? 3)Frank wants them to pay the government the total cost of the event plus give back all TARP money they received? If they want the money back that they forced on Northern Trust that is fine, but based on the governments recent track record managing its own financial affairs, do you think it is really smart for them to be dictating how publicly owned companies should best operate?

1981 days ago
185.

JP    

Grow up people...this is how corporate business is done.

1981 days ago
186.

Amanda Bentley    

Obama only won because he's black. I live in Detroit and have voted in numerous other presidential elections and NEVER before did I see black people vote.. Not like this election where they all came. Everyone was so wrapped up in this "history" thing and the fact that he's black that we lost focus and gave him every free pass in the book. No one called him out on his BS so why would he stop now? He knows he can get away with it and the people who call him out and tell it like it is are branded racists.. Reverse racism is alive and well but no one wants to say anything about it. The blame game gets old. How much longer can he keep blaming Bush? (I don't much like Bush either) but Obama is not God. Come on. During the election I was so sick to go into the corner store and see Obama hats, shirts, pins and so forth. I wonder how many people even looked into his politics before jumping on the Obama bandwagon. I don't think very many. I think black people didn't even care. Liberals have NO ONE else to blame for octomom's welfare, this, and all the things to come. You voted him in, folks.

1981 days ago
187.

Ms. X    

Bush sure did a number on us before he left office. Let's see if Obama can now stick it to these morons.

1981 days ago
188.

IAMWOMAN55    

the money was given to the banks so that the banks will lend money, if they are not lending money out then it is wrong but if they are fine and they money that they spend is the company money not the government bailout money. i know because I work for a bank that got 25 billion but didn't want it and didn't need it but the gov made them take it.

1981 days ago
189.

Trenton    

Northern Trust's response is priceless. They defend the tour and mention the money they spend on charity, blah, blah, blah. However, they spent tons of money on renting the House of Blues!? Not to mention the money they spent on the rented Mercedes', airplane hanger, and the artists who performed! Seriously Northern Trust, you cannot justify this. Couldn't you have saved a few million dollars and kept some of those 450 people who lost their jobs? I hope this economy completely collapses, and the American people will wake up and get mad. And you don't want us to knock on your door when we're REALLY pissed off.

1981 days ago
190.

Kenya    

This really sucks. All I can think about is the poor 450 people who don't have a job right now and this bank is partying. I mean it really doesn't matter when the party was set or how much they spent because somewhere along the line they thought they were not doing very well and they let 450 people go. I mean it doesn't take a week to plan that either. It is so hard out there right now and to do that to your employees is simply horrible.

1981 days ago
191.

Laura    

Obviously, we do not have any event planners on here. Otherwise, this would not be as large of an issue as is being reported here. Events such as this are contracted usually between 1 year to six months prior to the program. Had they cancelled after this time period they would have to pay for it anyway, and with no ROI (it would be the same as taking a pile of money and lighting it on fire.) Not only that, but the U.S. economy relies on businesses such as Northern Trust. Imagine if every business that currently provides incentive trips for their employees, has car shows, corporate meetings, etc., cancel all of their programs. 1,000s of event companies, hotels, DMCs, Transportation companies, decorators, small businesses positioned around convention centers and hotels will go out of business and be unemployed, not to mention the CVBs and economic welfare of the cities in general who rely on tourists and conferences to maintain and support their cities. This is a dangerous slope the media has started with this feeding frenzy, and the ramifications will be quite extensive.

I will leave you with this. The inauguration was a $120 million event that was paid for by the US citizens tax dollars, and no one seems to have their panties in a bunch over that program.

1980 days ago
192.

Workinaway    

Jesus, TMZ, who knew you all had an intelligent, critical writer lurking in the halls! This is a great story. I am in the banking industry. First of all, yes the bank could have turned the money down. They are under no obligation to accept the funds. Secondly, the senior management of Northern Trust should be ashamed of themselves. I am certain they had these arrangements months ago and had signed contracts to fullfill but to go forward with this after setting loose so many employees and not saying anything is disgraceful. Banks are cold hearted money making machines. Most of them try to run very tight ships and staff is expendable. Take it from me, I was laid off (that's the banks way of saying "you're fired") the same day the bank I worked for threw a HUGE welcoming party for the bank that had just bought them. So there we were, 400 employees, and we had to walk through the main party area carrying our stuff while we were offered cake. NOTHING will CHANGE unless WE THE PEOPLE CHANGE IT! David took down Goliath with just a stone's throw. We should all write a letter to the bank's president. It probably won't change anything but at least they'll know people are watching.

1980 days ago
193.

anymouse    

The US government is now handing out "coke and hookers" expense accounts? Where do I sign up for this program?

Nice to see the transfer of wealth from the lower and middle class to the wealthy few, hasn't slowed down.

1980 days ago
194.

Please    

This is an outrage! Northern Bank is not the only bank that did not ask for money yet received it. This is OUR money people! It is not for them to go out and party on. Their lavish spending and disregard for the rest of us struggling out here has to be stopped. It is time for a revolution!!!

1980 days ago
195.

Jimmy Z    

Thanks again TMZ. What a source you're becoming. The hypocrisy of Obama is exposed.

1980 days ago
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