An emotional, ill-thought out letter sent to Northern Trust CEO Frederick Waddell by Barney Frank, Chairman of the House Financial Services Committee, on the subject of The Northern Trust Open got the response it deserved. Waddell simply told Frank (politely) to get back in his crib, and get his facts straight.
Here's the exchange of letters:
Mr. Frederick H. Waddell
President and Chief Executive Officer
50 South LaSalle
Chicago, IL 60603
'Dear Mr. Waddell:
We are dismayed and angered to learn that Northern Trust recently spent millions of dollars on a PGA golf tournament sponsorship and associated parties at the same time it has taken over $1.5 billion in federal stabilization funding under the Troubled Asset Relief Program. According to published media reports, your bank not only sponsored the Northern Trust tournament at the Riviera Country Club, but also 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.
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.
We insist that you immediately return to the federal government the equivalent of what Northern Trust frittered away on these lavish events. Federal taxpayers should not and will not stand for such abuses, and we will insist that any future Treasury support for Northern Trust be conditioned on a thorough reform of your company's policies and practices.
We look forward to your reply and immediate reimbursement of these funds.
'Dear Congressman Frank:
Thank you for your letter dated
We understand this is a time of great anxiety and financial distress, and your question regarding our support of an event such as the Northern Trust Open is legitimate. We deeply regret that some of the events associated with the Northern Trust Open have distracted from the positive nature of an event that has raised more than
We take our responsibilities to our shareholders, clients, employees and taxpayers seriously, and we remain committed to doing the right thing for all constituencies. While our client educational and entertainment activities have all been within applicable guidelines under the Capital Purchase Program, we will redouble our efforts to ensure that these activities are appropriate given the current environment.
Our capital ratios are, and consistently have been, strong. Our company has been consistently profitable, including net income in 2008 of
As you are aware, the U.S. Treasury yesterday released an FAQ addressing the Capital Purchase Program under the American Recovery and Reinvestment Act of 2009, including guidance on repayment procedures. Northern Trust has engaged our regulators with the goal of repaying Capital Purchase Program funds as quickly as prudently possible under the new guidelines.
As we have stated publicly, the Northern Trust Open and its related activities were in no way reliant upon Capital Purchase Program funds, and would have occurred even had we not received Capital Purchase Program funds.
Moreover, as disclosed in public documents, Northern Trust has used Capital Purchase Program funds to support high quality loan growth, benefiting personal and institutional clients. As of
Northern Trust is profitable and well capitalized, and we will continue to invest in our clients and the communities we serve. We appreciate your efforts to help our nation's financial system and economy achieve a full recovery'.
Source - The New York Times
'I applaud Mr Waddell for his company's support of the Los Angeles community, and for defending his and Northern Trust's position. They made commitments, fulfilled their contractual obligations, and along the way raised significant funding for many organizations through the Jaycees.
In today's times, you still need to do business. You cannot just save your money and expect to remain profitable. Creating new business opportunities through the utilization of marketing events help build your brand and tell your story. That's a formula for success'.
Source - The New York Times
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