Northern Trust under pressure over parties

Northern Trust’s Holt noted that no government funds are allocated to operating expenses, including marketing, advertising, corporate sponsorships or charitable activities. He said those costs come from cash flow from the bank’s operations.

Northern Trust made its first quarterly payment of $19.7 million to the government earlier this month as it repays the $1.6 billion investment.

Throughout the ongoing credit crisis and recession, Northern Trust has remained profitable, unlike some large commercial banks that have received larger sums from the government. Northern Trust earned $794.8 million, or $3.47 per share, in 2008.

Despite remaining profitable, Northern Trust announced in December it would cut 4 percent of its staff, or about 450 jobs.

As sponsor of the golf tournament, Northern Trust hosted dinners Wednesday, Thursday and Saturday for special guests, according to TMZ. Each dinner was followed by a concert, with performers including the bands Chicago and Earth, Wind and Fire as well as Sheryl Crow, according to the report.

“The band has had no knowledge of Northern Trust using bailout money to support their event last week,” said Earth, Wind and Fire’s publicist Mark Young in an e-mail to The Associated Press, in response to questions about the group’s performance Thursday at a private hangar at the Santa Monica Airport.

E-mails to Chicago and Crow’s publicists were not immediately returned.

PGA Tour Commissioner Tim Finchem noted that Northern Trust is in the wealth management business, and that entertainment vehicles help their business. “I think it’s unfair to them,” he said. “To take a company and say, ’You should play by these rules because you have tax dollars’ — the taxpayers should want the business to work. Most of these companies that are being beaten up so bad weren’t mismanaged companies.”

Michael Yamaki, a corporate office for the Riviera Country Club said unlike in past years, Northern Trust’s executives did not head to the tournament early to play golf at the host course.

Yamaki said: “You could tell they were really tightening their belts and doing this for business. All the executives I saw were in coats and ties, not golf clothes. I know everyone was wondering at the start what position they would be in. Years ago, the top executives would come out and golf. Not this time.”

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