Wells Fargo says it will reduce spending on golf tournament
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Big banks that have long sponsored high-profile golf tournaments are backpedaling fast, afterNorthern Trust Co. suffered withering criticism for its spending on the annual Northern Trust Open at the Riviera Country Club in Pacific Palisades.
We may be nearing the point where bankers who have accepted federal money to bolster their balance sheets will have to ask taxpayer permission to use the office water cooler.
From Bloomberg News:
Wells Fargo & Co., recipient of $25 billion in government aid, is cutting spending on the Wachovia Championship golf tournament that starts in April amid criticism from U.S. lawmakers about banks’ corporate expenses. Wells Fargo, which acquired Wachovia Corp. in December, has a sponsorship contract with the PGA Tour through 2014, spokeswoman Mary Beth Navarro said in an e-mailed statement. The company is reducing costs, including some related to client entertainment, and hasn’t determined the specifics, she said. ‘This event helps us drive significant revenue for our businesses by building client relationships, but we are carefully evaluating all of our expenses given the economic environment,’ Navarro said. ‘We plan to reduce expenses as much as possible, while meeting our contract obligations.’ Northern Trust, which received $1.6 billion in funding through the U.S. Troubled Asset Relief Program, was criticized by lawmakers yesterday for spending on clients and employees at a company-sponsored golf tournament this month. U.S. Bancorp spokesman Steve Dale said that the Minneapolis-based bank is not renewing its sponsorship of a PGA tournament after this year. The final U.S. Bank Championship in Milwaukee will be held from July 13 through July 19, and the company will reduce ‘hospitality and entertainment aspects of the event,’ Dale said today in an interview.
Don’t we have to wonder whether bankers’ growing status as national pariahs will make them even less psychologically capable of making new loans, for fear of screwing up again? New lending, after all, was the whole point of the government-aid program.
-- Tom Petruno