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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

No Avatar
196.

wickedorchid    

Here is the link at Northern Trust to express your outrage.

http://www.northerntrust.com/pws/jsp/display2.jsp?TYPE=contactus&XML=pages/ntcontactus/1203627089283_852.xml

And heavens, pull your money out of there if you have any.

2011 days ago
197.

ejhickey    

What does TMZ stand for? THE MINDLESS ZOMBIES? That is the only fitting name based on this story . My characterization fits both the story and the dead above the neck person who slapped it together.

2011 days ago
198.

Disgusting    

Whoa. These are no words for what an outrage this is. Is there a connection to Chicago, or is it a coincidence that this bank is from Chicago? Please keep on this story and others like it. These times are going to be known in hindsight as among the sickest most corrupt. First the banks plunder the country with the government's blessing, now the banks are plundering again with the government's blessing - rewarded for criminal behavior. People need to see the direct connection between government handouts and fiscal irresponsibility and their own wallet. Government funds are YOU. YOU are paying for this. And others are being rewarded for criminal acts. YOU are struggling to pay for health insurance, food, gas, and THIS kind of government sanctioned activity goes on.

2011 days ago
199.

Anna Hagy    

Call Chicago an d demand an answer if you are pissed
1-312-630-6000

2011 days ago
200.

Anna Hagy    

Call Chicago Northern Trust-Ask Them To Answer
1-312-630-6000
Then The White House
1202-456-1414 the switch board-that should get their attention

2011 days ago
201.

M Chen    

Let's actually think about this one intelligently, shall we?

Northern Trust has a five year contract to sponsor this event, they would have had to pay for it whether they wanted to or not. They entered into this LEGALLY BINDING CONTRACT several years ago, before the financial crisis.

Second, they took government money cause the government asked them to. Did any of you refuse your Stimulus checks last year? If not, then be quiet. They're paying the government interest, as well as all of the money back. Their taking of the "bailout" money is MAKING THE GOVERNMENT MORE MONEY. It doesn't matter how they spend it, we get more money back then we gave to them. Sounds like a pretty good use of taxpayer money to me!

Third, they got money from the government last November. Sorry to break it to all ya'll, but this sort of event doesn't get throw together in four months, this is the sort of thing you start planning for a year or more in advance. All those Tiffany "trinkets" were probably paid for last summer.

Fourth, the only thing that probably gets contracted and paid for immediately before the event (that they could have possibly scrapped) is the labor, and maybe some of the catering, but think about it, think how many drivers they must have paid to drive people around in their logo-ed SUVs, think about the company they rented the SUVs from, etc, etc. That is all money that is being paid to someone who might not have otherwise had a job to do. They CREATED JOBS by putting on all these big events. They were putting money into people's pockets, and those people might go buy some consumer goods, or go out to eat, or otherwise spend that money around, and help our economy get out of this recession.

We need more companies to put on big events and spend what money they might have to spend, that's what the bigger financial recovery package is all about, getting more money out there, so people can spend money and get the economy moving, without going into personal debt to do it. If everyone stops spending the money they have, this is only going to get worse and last longer.

2011 days ago
202.

longshowerz    

This just pisses me off! I blame both Congress and the greedy bank, but more congress because they are giving out our hard earned money like its candy! When are they goin to start growing a brain!

2011 days ago
203.

duh    

typical.

2011 days ago
204.

Archangel    

This is yet another example of Barney Frank's complete ignornance and inability to control the total BS that flows from his fat facial orifice. The bank didn't spend any of the TARP funds on this - which is clear since unlike Citigroup, Northern is NOT losing money. Anyone with half a brain (let's out Barney Frank) can look up their stats - Net income was almost $800 million, they have almost $29 billion in cash, and pay the Fed ten times the cost of this event in interest on the TARP capital. The bank deals with high wealth clients (many of whom are individually worth more than the cost of this even in profits to the bank) and this is advertising/client relations. Let's turn the lens back onto Barney Frank who was boosting Fannie Mae and driving their deregulation while having an affair with one of the male execs.

2011 days ago
205.

duh    

f**k the masses.

2011 days ago
206.

jschultz    

HAS ANYONE EVER BEEN THE BENEFICIARY OF AN ESTATE, HANDLED BY NORTHERN TRUST? TRUST ME...YOU DON'T WANT TO BE. WE WERE THE BENEFICIARY OF AN ESTATE THAT IT TOOK NORTHERN TRUST 3 YEARS TO FINALLY CLOSE (TYPICAL FOR CHICAGO). BY THE TIME WE GOT THE STOCK, THE STOCK WAS DEPLETED. THIS BANK IS JUST AS INCOMPETENT AS ALL OF THE OTHERS. THEY SHOULD GIVE THE MONEY BACK.

2011 days ago
207.

AngieW    

If they did not ask for the money it is because they did not need it. Many banks had the money forced on them. US bank and Wells Faargo were told they have no choice but to take the money. These banks are holding the funds in accoutns that can not be touched till the time the can "pay" the Gov back. They gov forced the money on these banks so that they have to follow there rules on banking practies and the Gov can tell them who they can lend money to. This is the 1st step in nationalizing banks. TMZ please get your facts. If they used their money let them. God knows the economy needs it .

2011 days ago
208.

LarryofHemet    

Northern Trust did nothing wrong! Why should they change their successful marketing program because Barney Frank forced them to take a $1 + billion that they neither needed or wanted? They appear to have a successful bank model that other banks should have been following. You know, like ABSOLUTELY NO toxic paper and being profitable!

2011 days ago
209.

Josh    

Anyone on this thread ever heard of a Return On Investment (ROI). There's no doubt that they (Northern Trust) weighed the cost of these events with the benefits that will return to their business because of them and THEN decided whether or not to actually put them on. It's just like taking a valued client out for a happy hour or a decent dinner, just on a larger scale. You treat your best clients well in order to ensure that they continue bringing you their business. This. Is. How. Companies. Make. Money....even in an economy that's taken a dump.

Just my thoughts.

2011 days ago
210.

NewTMZFan    

Hey TMZ... THIS IS THE BEST STORY I'VE SEEN ON YOUR SITE! I know it's supposed to be about lighthearted entertainment news but please continue exposing stories like this. The more the people know about stories like this, the better! Question: Did Sheryl Crow know how she was getting paid? Doesn't she watch the news?

2011 days ago
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