Frank Demands Repayment From Financial Services Firm

Posted February 24, 2009 at 4:09pm

House Financial Services Chairman Barney Frank (D-Mass.), along with 17 other committee Democrats, fired off a letter to Northern Trust on Tuesday demanding that the financial services company “immediately” repay funds used from the financial sector bailout amid reports that they spent taxpayer dollars on lavish parties.

In the letter addressed to Northern Trust President and Chief Executive Officer Frederick H. Waddell, Frank and other Democrats say they are “dismayed and angered” to learn that the company recently spent millions of dollars on a PGA golf tournament sponsorship and other parties as it has taken more than $1.5 billion in Wall Street bailout funds.

Media reports indicate that Northern Trust not only sponsored a golf 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,” the letter states.

Frank blasts the executives for demonstrating “extraordinary levels of irresponsibility and arrogance” at a time millions of homeowners are facing foreclosure and businesses are struggling for credit.

“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,” the lawmakers conclude.

The letter is signed by Frank, along with Democratic Reps. Carolyn Maloney (N.Y.), Brad Sherman (Calif.), Dennis Moore (Kan.), William Lacy Clay (Mo.), Stephen Lynch (Mass.), Brad Miller (N.C.), Al Green (Texas), Gwen Moore (Wis.), Paul Hodes (N.H.), Keith Ellison (Minn.), Charlie Wilson (Ohio), Bill Foster (Ill.), André Carson (Ind.), Mary Jo Kilroy (Ohio), Steve Driehaus (Ohio), Alan Grayson (Fla.) and Gary Peters (Mich.).