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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
211.

chooch    

This is a bogus story.

Gift bags werent given out.
Mercedes were donated by dealer for shuttles.
Entertainment wasnt paid by Northern Trust.
The Los Angeles Chamber of Commerce is the biggest guy involved in the tournament.
Anything that is spent is made up for by ticket and merch sales.
TMZ needs to get facts straight.

1882 days ago
212.

DJH    

A couple of things - first off, they didn't request the money and I believe they weren't allowed to reject it. So because of that they should change their business operations? These sponsorship deals aren't worked out last minute - this is probably been in the works and if they're a healthy bank then your outrage should be with Congress/Obama and not this bank.

Now, the fact that they engaged in this rather large and lavish throw down and laid off folks doesn't sit too well with me.

The idiots in Congress must be stopped! If the US doesn't institute term limits on Congress it wont matter how bad Barry, or Bush or anyone is - CONGRESS IS THE PROBLEM. It's time for America to get mad and take it out on CONGRESS!

1882 days ago
213.

Tony Romo    

Did the Cowboys trade for the rights to Michael Vick yet?

1881 days ago
214.

kim    

this money was PRE-OBAMA, people!!!! OUR money that these pigs are spending was given to them, no questionsd asked, by the criminal republicans in the white house!!!!!

if you actually want to know any FACTS from the current stimulus bill, the money that will go to bailing out incompetent, soul-less corporate executives has VERY HEAVY strings attached and OVERSIGHT (something the bush gang didnt bother to do with THEIR buddies, who are now out there spending it like it's THEIRS---and not OURS!!).

i am VERY upset with obama and the dems who are still on this "bi-partisan" kick!! GET OVER I T----they ignored, blamed, and mocked you for 8 years, these brats dont know bi-partisanship and honesty, it's not even a part of their sick and twisted DNA!!

1881 days ago
215.

kim    

anyone who is STUPID enough to believe that obama is anything like bush or that he is magic and can fix the economy in a little over a month, PLEASE LEAVE THE GENE POOL FOR OUR WEEKLY CLEANING!!!!!!!!!!!!!

1881 days ago
216.

Liz    

Kim ~ Precious, you might want to do a little research before you start spewing lies!

1881 days ago
217.

celebutaunter77    

"We cannot expect the American's to jump from capitalism to Communism, but we can assist their elected leaders in giving American's small doses of socilaism until they suddenly awake to find they have Communism."
~Soviet Leader Nikita Khruschev, 1959

Don't drink the Kool-Aid!!!! Obama is a socialist!!!

1881 days ago
218.

Kim    

Wow, Kim # 265, it is ignorant people like you who have gotten us into this mess. The fact that Barney Frank sent a letter to Northern Trust is one of the biggest acts of hypocrisy I have witnessed.

It was at Barney Franks direction and "oversight" that the Congress pushed through the changes to our system that allowed the financial fiasco we are in now. Are the Republicans free of blame? Absoluetly not, but they certainly aren't the root cause. The social policies of the Democrats are what have led us down this road. Rupublicans believe in a "do it yourself attitude", not a what are you going to give me.....you know like give me a mortgage that I really can't afford, and then give me the money to bail me out when I can't make the payments.

Focus on what is happening here....do you realize that stimulus package requires states to change thier laws in order to receive the funds. States have to increase the size of their states unemployment benifits PERMANETLY in order to receive TEMPORARY funds. So in two or three years, when those funds from the gov. run out, where are they going to have to come from? That is right, the residents in that state will then have to have their taxes raised to meet the new levels dictated by the stimulus funds. If we think the states are in trouble now, what is going to happen then?

Then there are the changes to COBRA - now any employer who offers health insurance has to go back to ANY employee fired with or without cause since September 1st of last year and RE-OFFER them COBRA coverage even if they refused it when first fired. If they elect to take it now the employer has to cover 65% of the premium while the former employee covers 35%. Now someone has to try and collect that 35% from the ex-employee every month (man hours, paperwork). The goverment will give you a tax credit at the end of the year to reimburse for that payment, however, what does that do to the companies cash flow each month until the end of the year? If employers had to fire people because they couldn't afford them, how are they going to keep the employees they have if they have to start paying more money out of pocket each month? We are KILLING small business in this country with each step we take.

Wake up people.

1881 days ago
219.

Jew Boy    

As taxpayers with skin in the game, don't you want this bank to be successful? Schmoozing clients is what successful banks do. It is outrageous that they are being demonized for doing what successful banks do: cultivate clients. Further more the money they spent over the weekend did stimulate the economy in California. Don't you think Tiffany's deserves some revenue? How about the people who work at the hotel. It is like they lent the hotel money that doesn't need to be paid back. It's not like the execs are going out and buying islands for them selves with the money. It frightens me how wrong you all are about what is going on here.

1881 days ago
220.

Marion    

First of all, thanks TMZ for such an important story! The bank says that no bailout money was used for this, but there's no way of knowing that since all monies were in one place. And even if bailout money wasn't used, does it matter? $1.6 billion dollars should be frozen in that bank and immediately returned to the taxpayers! We are barely keeping our home, and the taxes that my husband paid are being squandered in this manner?? Now he's laid off which infuriates me even more to see this happening! Not only should this money be returned, but those who are responsible should be fired, if not jailed for this!

1881 days ago
221.

Jon    

Shame on TMZ for such irresponsible reporting. If you knew what the hell you were talking about you would know that Northern Trust has a five year commitment to sponsor the golf tournament. Also Northern Trust is known for treating their clients this way and is one of the reasons they are so well regarded and trusted by their clients. All of the money for these expenditures were already budgeted out of their operational budget and committed to those events. Northern Trust also NEVER asked for these funds from the federal government and practically had the money forced on them by Treasury during the first bailout. The reason treasury gave was they wanted even solvent banks to make sure they had the needed assets to remain so. Northern Trust has not foreclosed on a single client at this point and has been working with the one quarter of one percent of clients who are at risk of foreclosure to make sure that does not happen. The fact that Mr. Frank sent this letter without knowing the facts is appalling however not surprising given his behavior in the past.

1881 days ago
222.

Ken    

Chill out people!! The government DEMANDED that Northern Bank Trust accept their TARP money, which was invested into the bank as preferred stock, and for which the bank is paying quarterly dividends back to the U.S. government, and they ultimately will pay the money back to the government.

In the meantime, they need to run their business, which includes business development, brand development, thanking employees and customers, etc. Let them run their business!! As a shareholder, the U.S. government has a right to express opinions, but not 'demand' reimbursement...

This is like Atlas Shrugged in real life... The bank would be smart to just give the Feds their money back ASAP...

1881 days ago
223.

SP    

You mean like while we are in debt and Obma had a big multimillion dollar innaguration party? Or like Kerry and Pelosi just flew in PRIVATE JETS to go overseas? Our own elected officials can't even control their waste of our money why should anyone else they give it to. And what about all these people who get earned income tax credit money they did not pay in? They waste it on who knows what.

1881 days ago
224.

dani    

I work for one of these big resorts that these companies goto for there "meetings". Even though they have contracts to do these things, they can always change it. They cant cancle it but they can change what they get and the number of people going. They do not have to spend $120 a person for a dinner, $80 for a bottle of wine, $50 for a gallon of iced tea to drink during the meetings. They dont need to have activities on the beach that includes full open bars. They dont need to go and get spa treatments. This is all at the expense of the companies, not the employees. These are big corporations that are doing these things. The american people need to say enough is enough. Stop doing business at these banks. Send them a message that we are tired of this waste. The same companies that are having these "important meeting" at beach resorts are the ones that are firing your friends and families because they cant afford to keep them. We need to tell them enough is enough.

1881 days ago
225.

adam    

I think everyone misses the big picure here. Northern Trust should not have to GIVE THE MONEY BACK, they already did give it back to the taxpayers by SPENDING MONEY. everyone seems to think that this party happened and the only people who benefited were the employees of Northern Trust. who really benefited were all the waiters, bartenders, restaurant owners, hotel owners, housekeeping staff etc..... at all of these places that received the money. all recipients of this money were TAXPAYERS.. if more people and companies acted like Northern Trust our economy would be in much better shape!

1881 days ago
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