Barney Frank to Bank: Give Us Back Your Bailout Money

File this one under the category of "what were they thinking?"

TMZ caught Chicago-based bank, Northern Trust Corp., spending a lot of green in L.A. last week on a serious of lavish parties and concerts - Earth Wind & Fire and Sheryl Crow, for example. They even flew hundreds of clients and employees to the CIty of Angels and put them up at hotels like the Beverly Wilshire and Ritz Carlton in Marina Del Rey. The kicker? The bank got $1.6 billion (with a 'B') in federal bailout money under TARP. TMZ also says Northern Trust paid millions to sponsor the Northern Trust Open PGA event on Sunday at a swank L.A. country club, as well. Oh, and female guests at one hotel got Tiffany swag.

Did Northern Trust really think no one would find out? The bank, which last year had a net operating income of $641 million, told The Chicago Tribune that they were in a commitment to sponsor the gold tournament long before the bailout ."The reason Northern Trust sponsors the Open is it's an integral part of its marketing program. It's about client relationships and showing appreciation for clients," a spokesman said. The bank laid off 450 workers in December.

House Financial Services Committee Chairman Barney Frank certainly found out. He sent a letter just today - signed by several other House members - to Northern Trust, asking the bank to repay what it spent on the swank parties and golf tournament, saying they are "dismayed" at the firm.

Get the new
PD toolbar!

"At a time when millions of homeowners are facing foreclosure, businesses and consumers are in dire need of credit, and the government is trying to keep financial institutions – including yours – alive with billions in taxpayer funds, this behavior demonstrates extraordinary levels of irresponsibility and arrogance," the letter says.

Ouch. Other signees Reps. Stephen F. Lynch, D-Mass., Steve Driehaus, D-Ohio, and Bill Foster, D-Ill.

"Representative Driehaus supports Chairman Frank's position on this issue," Driehaus spokesman Tim Mulvey said. "Rep. Driehaus's reasons are clearly stated in the letter from members of the Financial Services Committee to the CEO of Northern Trust."

"Congressman Bill Foster is appalled and angered at the behavior of Northern Trust executives," Foster spokeswoman Shannon O'Brien told me in an e-mail response. "Those responsible must act - the bank should return what they spent on this junket to the federal government ASAP."

Then there's this response to the whole ordeal from the U.S. Travel Association, warning us against going after every company for every little penny spent, while we make sure they are still held accountable:

"We are perilously close to falling into a witch-hunt mentality in which working Americans are unfairly punished. For every case of wasteful spending, we are seeing scores of instances in which the game of 'gotcha' has forced businesses to cancel legitimate activities that would have grown their bottom lines and generated jobs and economic growth for local communities," said the associations president, Roger Dow. "Policymakers must realize that meetings and events are the lifeblood of local communities across the country. It is critical to protect legitimate travel spending and the millions of American jobs it creates. Meetings and events are responsible for 15 percent of all travel and create more than $100 billion in spending and $16 billion in tax revenue."






Follow PoliticsDaily On Facebook and Twitter,
and download the new Politics Daily toolbar!