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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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256.

jessiebee    

Each and everyone of those CREEPS including Sheryl Crow and lame CHICAGO should pay everything back. None of those bastards are feeling the recession like your average citizen is. This just makes me sick!!

2002 days ago
257.

oversight    

Banks celebrate success. It doesn't matter where the money came from, money is success. Due to the bailout scheme, 2008 was a very successful year for banks, and they are spreading the wealth to the top tier in appreciation for a job well done with huge bonuses and money is no object parties. In the future, plan to see banks harvest income using larger and larger bailouts, followed by larger and larger celebrations.

2002 days ago
258.

John Galt    

All right you populists, let's behead those CEO's. Government has made them the enemy. But, if the CEO's called them earmarks, would they be more palatable? CEO's: unite and tell people how well the government has run things. For example, the Department of Energy was formed to mitigate dependence on foreign oil and find alternative energy, and they have spent billions, and the result is...? And now we have earmarks to eliminate odors in Iowa and support blueberries in Maine. Beware people, in order for government to give money and provide jobs, they need to take money and jobs. The poor have more votes, but those who are supporting them have the right to move once they sense that they are simply being looted by Pelosi and gang. Without companies, there are no jobs, unless government wants to give you a job, tax your money, and pay you with your money. Now, that's wealth. Let' s be like Russia and Cuba. Atlas is Shrugging.

2002 days ago
259.

Dallas Hottie    

Northern Trust was contractually obligated to sponsor the golf tournament (Northern Trust Open). I can understand Northern Trust following through with their obligation; however, the elaborate parties, expensive hotel rooms, etc., were totally unnecessary. The user conferences they supposedly combined with the Open were not necessary either. They could have cancelled them this year like many other companies have done. Furthermore, Northern Trust did not have to absorb the travel, hotel, etc., costs involved. These are things that are typicially paid for by the participant or their employer. I've attended many conferences and not a one of the companies that held them paid for my travel or hotel - my employer did. Many companies are canceling user conferences, seminars, and similar meetings that require travel and conducting teleconerences and web meetings. Maybe someone needs to tell the folks at Northern Trust about technology. In light of their layoffs in December, the acceptance of bail out funds, and the current economic conditions in this country, Northern Trust was very WRONG and has severly tarnished their name. It is also the responsibility of our government as trustees for the actual lenders - the U S Citizens - to monitor any institution that received bail out funds and to make sure they are not being obusive or elaborate with their spending, raises, bonuses, and the salaries of the executives. If Northern Trust didn't need the bail out money, they should return it to the US Treasury. If they really don't need the bail out money, there is no reason why they should hold on to it. I doubt there is a penalty for early repayment so why can't they just simply repay the $1.6 billion all at once instead of making quarterly payments of $19.7 million? I think their story about not needing the bail out money is BS! There are a lot of people in this country out of work, living day-to-day on unemployment (in Texas the max you can get is $398 per week - going up $25 per week in mid-March), that have exhausted their savings, no longer have medical insurance because they cannot afford it, and are losing their homes. It really pisses me off to see an institution like this display excess in this manner when they received $1.6 billion of government funds. Where the hell is my bail out? I was laid off in December and have been living on my $398 per week and my savings. Medical insurance through COBRA is almost $500 per month - and we still have no national health care plan - that's another subject! That leaves very little to live on. What happens in about six months when unemployment runs out and I still haven't found a job and I can't make my house payments any longer? I'll probably have to cash out what remains of my 401K and my IRA's so that I can continue to have a place to live and food to eat. Will the US Treasury cut me a bail out check so I don't have to spend every penny I've ever saved? Hell no - they won't.

2002 days ago
260.

Janice    

Are you people complete MORONS????????????????????? Northern Trust was NOT BAILED OUT. Get your facts straight.

2002 days ago
261.

J    

Maybe you should write an article about all the GM advertising on your web site. You don't seem to have a problem taking money from a company claiming to not have enough cash to get to the end of the month without a bailout. Saab, Buick, GMC, Cadillac and Saturn (all GM) ads everywhere. How about walking the talk and rejecting the advertising?

2002 days ago
262.

L.Tafoya    

I thinking that this bank pumping money into the economy for that side of town would be a great thing...I thinking about all the people who went home with money that night..the waiter's the limo drivers, the bus boy's...etc....

its like damn if they dont spend any money into the system..and damn if they do put money into the system. I think, in order for this recession time to turn around, all of us need to step out and spend some money and put in in our local communitys and city business. Stop, hackling the bank for doing what they have done for years. Yes, its our money, but its all so our city they pumped it into..

2002 days ago
263.

Sally Jo    

thanks for busting them out, TMZ. Stay on 'em!!!

2002 days ago
264.

tbone    

Another example of the media pushing headlines! Northern Trust is a $575 billion bank. Affluent customers, and corporate clients provide revenue to the bank. Assests under management, deposits, lines of credit, trust services, and investment advice all require individual interaction. Not withstanding the social responsibility shown by Northern Trust in sponsoring a charitable event, entertaining clients is and should be considered GOOD BUSINESS!

2002 days ago
265.

Janice    

I am horrified that TMZ would report such an inaccurate, absurd story without getting all their facts straight. Personally I think Northern Trust should sue TMZ and Harvey Levin for slander.

2001 days ago
266.

kar    

Please go to Northern Trust's web site and read their response to the golf outing allegations. TMZ is doing no favors for this bank that has time and time again given money to charities and kept its contract and obligations to the golf open and supported several LA charites and jobs while putting on this even they committed to two year ago. Get all the facts before maliciously attacking a bank please not a big TMZ fan anymore

2001 days ago
267.

Janice    

I am a long-time client of Northern Trust. I do not do business with unethical companies. I resent the implication made in your report that Northern Trust, it's employees and clients are criminals. Before you do an expose like this, you need to not only do your homework adequately, but also think about all the people and reputations you are damaging. Northern Trust does enormous amounts of good for the communities in which it serves. How dare you lump them in with others who might not be so upstanding. I have never been a fan of TMZ as your stories are mean-spirited and do nothing positive for it's viewers. I wouldn't be surprised if you end up being sued.

2001 days ago
268.

kar    

AMEN Robert - well said!!!!!!!!!!!

2001 days ago
269.

Fed up    

This is just ridiculous, when most of us are fighting just to put food on the table. When is our government going to wake up and help those of us that really need it?

2001 days ago
270.

alf    

I read an article at CNN that said they laying off 450 employees in December 2008. Wonder if they invited any of those that were layed off to the party?

2001 days ago
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