Frank Demands Bank Give Bailout Funds Back

Rep. Barney Frank, D-Mass., on "Face The Nation," February 15, 2009. CBS

Massachusetts Congressman Barney Frank is demanding that Northern Trust, a bank that received $1.6 million in bailout funds, pay the government back for the money it spent on lavish parties and concerts last week in Los Angeles, according to entertainment Web site TMZ.

Frank, the Chairman of the House Committee on Financial Services, is sending the letter on behalf of the committee, TMZ reports.

Northern Trust sponsored a PGA event, the Northern Trust Open last weekend at the Riviera Country Club in Los Angeles. According to TMZ, the bank flew out hundreds of employees and clients to stay at lavish hotels, and attend parties and concerts with acts like Earth, Wind & Fire, as well as Sheryl Crow.

The bank responded to TMZ'S claims by arguing that the Northern Trust Open is "an integral part of Northern Trust's global marketing activities, focusing on retaining and growing business with existing clients and attracting new clients."

Northern Trust also said that the bank did not seek the government's help during the November 2008 Capital Purchase Program when it was issued $1.6 billion in preferred stock and warrants, but agreed to the "government's goal of gaining the participation of all banks in the United States." The bank has said that none of the CPP funds are allocated to operating expenses, including marketing and advertising.

Frank told TMZ that the bank should have spent the money making loans and stimulating the economy, and that the Open was an "ego thing" that had nothing to do with good business.
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