Lawmakers are demanding that a beneficiary of the Troubled Asset Relief Program give back the government assistance money it spent on a golf tournament and other expenses.
House Financial Services Committee Chairman Barney Frank and more than a dozen other committee Democrats asked the $68.9 billion-asset Northern Trust Corp. of Chicago to return any portion of Tarp funds used for the tournament in a letter released Tuesday.
The lawmakers wrote that they were "dismayed and angered" over reports that Northern Trust spent millions of dollars on hosting a PGA Tour event at the Riviera Country Club, hosted clients and employees at places like the Beverly Wilshire and Ritz Carlton hotels, and gave away Tiffany souvenirs.
"If this is accurate, we are demanding you take corrective action," the lawmakers wrote in the letter to Frederick H. Waddell, Northern Trust's president and chief executive. "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." Any future Tarp requests should be conditioned on a reform of the company's policies, the letter said.
According to published reports, Northern Trust said the tournament and related events were "part of a business decision regarding an annual event to show appreciation for clients."
This is the second year Northern Trust sponsored the tournament "as part of a five-year contract," the company said. "The contract was signed in the fall of 2007 — a year before the U.S. government's Capital Purchase Program (under the Tarp) existed." Northern Trust also said it is healthy and did not seek Tarp assistance, but it agreed to participate in the program at the request of the Treasury Department. The funds "are not allocated to operating expenses, including marketing, advertising, corporate sponsorship, or charitable activities," the company said. "These are funded through our normal cash flow."