Massachusetts representative Barney Frank is demanding that Northern Trust Bank return $1.6 billion in bailout funding, in light of its hosting extravagant parties and concerts last week.
According to TMZ.com, Northern Trust paid millions to the Professional Golf Association to sponsor the Trust Open at the Riviera Club in Los Angeles. Additionally, the Chicago-based bank flew hundreds of clients and employees to Los Angeles, housing them in upscale hotels such as the Beverly Wilshire and the Ritz Carlton.
Sheryl Crow; Earth, Wind & Fire; and Chicago all performed for the festivities. Chicago confirmed to TMZ that it received $100,000 for its performance.
Frank, who is chairman of the House Committee on Financial Services, called the spending by the bank "an ego thing" and that Northern Trust should have spent the money making loans to stimulate the economy. He will send a letter to the bank on behalf of the committee asking the bank to return the money.
A statement from the bank says it was obligated to host the open as part of a five-year contract with the PGA. The bank added that the funding from the Federal Reserve was not allocated to operating expenses like marketing and advertising. Northern Trust said it did not specifically request bailout money from the Capital Purchase Program but agreed to take part in the government's "goal of gaining the participation of all banks in the United States." (Michelle Garcia, Advocate.com)
