Democrats & Liberals Archives

Mulligans and the Northern Trust Bank

Northern Trust Bank received $1.6 Billion from the government as one of the many, many companies to receive TARP money. The money, as the government put it, was to jump start the economy by getting the money to flow again. Last week, the money started flowing, except this time to professional golfers.

Last weekend Northern Trust Bank hosted the PGA tour’s “Northern Trust Open”. That fact isn’t all that new since Northern Trust bank has hosted the tournament for quite a few years. But it’s not about what the bank, the 4th largest bank in the country, and what they did during the good times; it's about what the bank does during the bad times.

According to pgatour.com, Phil Mickelson eventually won the PGA tournament, The Northern Trust Open, where the sponsor’s purse was $6.3 million and the winner's share was $1.1 million. Northern Trust said no TARP money was used for the tournament either to pay for purses or for the lavish entertainment (Sheryl Crow was one of the artists that appeared). It doesn't really matter if the money was used or not; a perception is out there. The perception is of a bank taking bailout money from hand and paying millions of dollars in tournament purses with the other hand. No wonder people are crying afoul (link).

According the Northern Trust's CEO Fredereck Waddell: “We came to the conclusion that no public purpose would be served by canceling the Northern Trust Open and related events”.

Really? No public purpose? How about the impression or message it sends to the public? How about the message that the government gives you a bailout because, if you didn't receive the money, you'd fail like your other competitors. Or how about ethics; don't they count anymore in the new way of doing business?

i don't begrudge a company hosting tournaments to improve their image, market their services and raise money for charity (PGA tour event raise millions of money each year for local and national charities). But at time like this to even give the hint of doing business as usual is just irresponsible.

Golf is the only sport where you police yourself; where you call penalties on yourself and there's something called golfer's etiquette. A true golfer doesn't take mulligans but i guess Northern Trust Bank didn't understand that golf is grounded in ethics. What a shame.


Posted by john trevisani at February 27, 2009 7:06 AM
Comments
Comment #276320

Top N.Y. legal officer demands bonus list from BofA CEO

Posted by: womanmarine at February 27, 2009 9:18 AM
Comment #276329

Really? Really? Banks aren’t allowed to sponsor golf tournaments now? Even banks that were in good shape before, during and after the current mess? I don’t think President DAxelrod, I mean BHO, would agree with you in this particular case. Y’all are really trying to drive people out of the democratic party. Should banks be allowed to sponsor basketball, baseball, football, the Chicago Marathon, won by an Kenyonian this year, or is it just golf?

Posted by: ohrealy at February 27, 2009 10:57 AM
Comment #276334

Ohreally:

Not if they needed money from the government.

Posted by: womanmarine at February 27, 2009 12:17 PM
Comment #276355

ohrealy:
i guess you missed the point.

Northern Trust took government money. That would mean that the bank wasn’t in good shape. And since they weren’t in good shape they should probably refrain from sponsoring golf tournaments.

i thought that i was clear in my original message. Sorry.

Posted by: john trevisani at February 27, 2009 4:13 PM
Comment #276368

Why shouldn’t they sponsor golf tournaments? For that matter, why shouldn’t spend their money on strippers and cocaine?

As long as Obama is giving them our tax dollars and they don’t have to worry about actually surviving in a free market economy, it’s party time. This is the face of socialism, after all. The elite living high on the tax-dollars of everybody else.

Expect a lot more companies and mortgage-holders and other borrowers to behave this way. This is the new face of Obama’s America. Change you can believe in!

Posted by: Loyal Opposition at February 27, 2009 6:38 PM
Comment #276369

LO:

As long as Obama is giving them our tax dollars

Um… they got their money, like most of the banks, from the previous resident of the White house… What was his name again?

Posted by: john trevisani at February 27, 2009 6:56 PM
Comment #276370

Loyal O
Or was it Bush who gave them that money?!?!
Remember? It was Bush that presided over the passage of TARP?

Posted by: steve miller at February 27, 2009 6:57 PM
Comment #276372

Steve, so it is Obama that is presiding over the recession since it is now his watch?

Posted by: Honest at February 27, 2009 7:29 PM
Comment #276373

John,

It is my understanding that the golf tournament was scheduled some five years ago. It might have cost more to cancel than carry out the contracts???

Posted by: Marysdude at February 27, 2009 8:16 PM
Comment #276385
Loyal O Or was it Bush who gave them that money?!?! Remember? It was Bush that presided over the passage of TARP?

Obama voted for this irresponsible orgy of giveaways when he was a Senator, so he can hardly point his finger for Bush over it now.

Today Bush is a private citizen while Obama is president. So Obama gets the heat for it. Obama has not only continued this irresponsible practice, he’s doubled down on it, and there’s no end in sight.

When TARP was passed, I wholeheartedly condemned Bush for signing it. In fact, it was the worst decision of his entire presidency by far. But now Obama is determined to not only saddle our children but our grandchildren and great grandchildren with debt to the Chinese.

I used to think that Obama was shaping up to be Carter redux, but the more we see of him the clearer it is that he’s actually Robert Mugabe redux and we’re on our way to becoming just another Third World Socialist basket case.

Incidentally, I love how liberals exempt Obama from any responsibility for his votes while he was a Senator and blame Bush for them instead. In the meantime, who do they blame for laws signed into law by Clinton? Phil Gramm, for one.

A nice little trick liberals use there. When a Republican is president, he’s to blame for how Democrats vote. When a Democrat is president, Republicans are to blame for anything that Democratic president signs into law. This way, Republicans are always to blame and Democrats are always as pure as the driven snow.

Posted by: Loyal Opposition at February 28, 2009 12:33 AM
Comment #276398

LO-
Yes, lets let every major bank fail. Let’s let the stock market and everything our economy depends upon collapse so we can satisfy ourselves that we’re not doing anything socialist. Because that’s what’s important: ideology, not results.

Both Democrats and Republicans were involved in this, but I think it’s laughable that you think that your party in particular can actually distance itself from its share of the blame, the way its tried. Why do you folks keep pounding away at Fannie Mae and Freddie Mac, pretending they were the source of the crisis? Why do your folks blame the CRA, a law most of the offending lenders barely had to comply with if at all?

And why do you blame us for blaming a guy who’s NAME was on a critical law that enabled these banks to get as intertwined with other financial industries and as acquisitive as they need to be to become too big to fail?

Please don’t give me this crap about Republicans always being blamed for things, when its those very things they fight and advocate for. You can’t have it both ways. You can’t push on an almost party line basis for the repeal of Glass Steagall, and then forestall your own responsibility by saying some Democrats jumped off the Brooklyn Bridge with you. You not only made your choice, you led on those measures, by choice. I’m sorry Clinton joined in on the Republican’s spree of deregulation and business-friendly regulation and legislation. Are you as sorry now that your Republicans lead on this fight and advocated for these laws, or are you just going to waste our time here trying to escape responsibility?

Bush knowingly took actions that made the problem of predatory and irresponsible lending worse, preventing states from taking their own action on these cases, punishing those lenders who knowingly indebted those who could not pay things back. He and the Republicans knowingly pushed changes in the rule such as the amendment that prohibited regulation of derivatives, derivatives whose unregulated excess was a necessary condition for this crisis to develop.

But hey, the Democrats helped you, so that makes everything… what, compromised? Seriously, if you walk yourself back through the logic of it all, either nobody did wrong, or everybody did wrong, and two wrongs, as you know, do not make a right. But Republicans are unwilling to admit that their program of business-beholden policy was a major cause of this, that they stood by and let the cheaters get what they wanted in regulatory laxity. You’re not going to mention the almost absent enforcement by the SEC under Bush, which only seemed to spring into action when doing otherwise would cause a political embarrassment for the President. You’re just going to conveniently forget that Bush put the person who once lobbied for Accounting standards to be relaxed (Harvey Pitt) in charge of the agency that was supposed to be the watchdog.

Was TARP mishandled? Badly. Was it necessary? Yes. Just like hurricane recover from Katrina was necessary. Just like keeping a balanced budget was important, winning a war, keeping our armies functional and capable of waging other wars were important. Just because something is badly mishandled doesn’t mean we shouldn’t be intervening. Did you not read my post about the collapse in the money markets, about how that collapse could have almost literally dumped us back into the stone age? Some kind of intervention was needed. Democrats, in particular, Obama, campaigned for intervention, but with preconditions meant to clear the decks of the wastefulness the banks were engaged in.

But your folks? You said, “Oh, that would be socialism!” Well, yes it might be. But it would be necessary, and if you did it right, you’d have functional banks back in private hands, and a stern warning to those who would avail themselves of such a bailout lightly. Instead, your people softened virtually everything in it, to limit government intrusion. Bush was having none of it, the Republicans were having none of it. You folks simply assumed that the idiots who got us into this mess could be trusted by themselves to get us out of it, that government could play a passive role and just hand them the money.

We may need to nationalize these banks, as your own Lindsey Graham said, to just clear their decks of everything and start them off new. Most Democrats like myself are with our President on being hesitant to take this step, but when the alternative is basically haveing zombie banks eating up billions of tax dollars and giving nothing back to the economy, you tell me, what’s the better idea! And no, letting them fail doesn’t count, not at least if you consider bankrupting the American financial system a second time brilliant regulatory strategy.

Posted by: Stephen Daugherty at February 28, 2009 7:34 AM
Comment #276405

Mdude, the golf tournament was part of a 5 year contract. The Northern Trust did what they were supposed to do with the money that they got from the government, which was lent out. This letter is from 4 days ago:

“In recent days, questions have been raised regarding Northern Trust’s sponsorship of the Northern Trust Open, a PGA event that has raised millions of dollars for charities, along with client-focused events during the Open.
We understand this is a time of great anxiety and financial distress, and the question of supporting an event such as the Northern Trust Open is legitimate. We came to the conclusion that no public purpose would be served by canceling the Northern Trust Open and related events.
Here’s why:
Northern Trust had net income last year of more than US$640 million, and paid for this event using normal operating funds.
No Capital Purchase Program funds were allocated for operating expenses, including marketing, advertising, corporate sponsorship or charitable activities.
Northern Trust did not seek the government’s investment under the U.S. Treasury’s Capital Purchase Program, but agreed to the government’s goal of gaining the participation of all major banks in the United States.
Northern Trust pays dividends on the Treasury’s investment, and will continue to pay them until the capital is returned. Currently, Northern Trust pays the government US$78.8 million on an annual basis as a return on taxpayers’ investment – almost US$20 million per quarter…At a time when economies worldwide are attempting to rise above current difficulties, it is important for healthy banks like Northern Trust to continue to invest in our clients and the communities we serve. We appreciate the support that you have given us and will continue to keep the lines of communication open…”
from northerntrust

According to news reports this morning, because of the stink raised, they will be returning the money that they did not want in the first place. Barney Frank should apologize for his stupid remarks. All the banks haven’t been nationalized just because some have failed, and the government continues to get involved with worthless institutions like Shiticorp.

Posted by: ohrealy at February 28, 2009 10:31 AM
Comment #276414

ohrealy,

No apology should be necessary. Banks may have been encouraged to take funds if funds were needed, but no one twisted any arms to make them take it. They saw some free money and grabbed it. That is a settled deal, they give it back and no harm done. Those preparations for the tournament went forward and as long as they had tax-payer monies in their till, it should not have. The books are even, i.e., tournament is a done deal…monies returned to the treasury…Northern Trust on solid ground.

The bank did what it thought was right, and Frank did what he thought was right. It turns out both were right…the world is whole again.

Posted by: Marysdude at February 28, 2009 12:31 PM
Comment #276484

At least the money is being used to stimulate the economy. When there is a tournement many people coming to see tyhem play golf will travel, eat out, stay at hotels etc. which causes dollars to move through out the economy and helps to save jobs in small business’s.

Although the same can be said for the bank executives of other banks that wanted to host lavish trips and retreats for their upper management this tournament lacks the arrogance and disregard shown by these other financial institutions IMHO.

Posted by: j2t2 at March 1, 2009 12:00 PM
Comment #276510

Loyal Opp said quite humorously I thought: “I used to think that Obama was shaping up to be Carter redux, but the more we see of him the clearer it is that he’s actually Robert Mugabe redux and we’re on our way to becoming just another Third World Socialist basket case.”

I love it when folks get their underwear in such a twist as to cut off the blood flow to the brain, creating arguments diametrically opposed to reality. Holding the line on debt and deficits this year would, by a vast majority consensus of economists far more educated on the topic than Loyal Opp’s Limbaugh talking heads, turn our economy into, (to quote Loyal Opp) “another Third World Socialist basket case.” And I would add that as a direct consequence of such oxygen starved commentary, America’s hand would be out to the IMF to feed the millions of homeless and starving in the U.S. of A. that Loyal Opp. would create if he were running things to the conservative view’s logical conclusion which took us down this road from 2001.

Wrecking our economy is not good enough for conservatives, they now want to hammer the nails in its coffin for some ideal fantasy revelation that now that their election choices are no longer in power, suddenly deficits and debt are a pariah to be avoided even if unto death of the economy.

Republicans calling themselves conservatives took a 5.65 trillion dollar national debt and elevated it to over 12 trillion in just 8 years. Now someone else has power and suddenly debt and deficits are to be avoided at all cost?

The hypocrisy. The comedic hypocrisy, is too laughable to bear.

Posted by: David R. Remer at March 1, 2009 8:42 PM
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