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Northern Trust Should Embrace Golf and Renounce TARP

John Powers 26 February 2009 3 Comments

Judging from the Presidential election results in New Trier Township, voters were confident enough in Barack Obama and the Democrats to support him by a 63-35 margin. During the election season, I would occasionally mention to my neighbors that Obama has promised to raise taxes on them, which would get a response of “No, he is only going to raise taxes on rich people, not us”, which shows how bewildering the campaign was. Given New Trier Township includes Winnetka, Kenilworth, Wilmette, Glencoe, plus portions of Glenview and Northfield, this demographic is exactly the target of the the 2010 tax hikes.

Another feature of the Township is a fierce allegiance to trust funds, and in particular the staid wealth managers at Northern Trust. For 120 years now, Northern Trust has not only operated as the leading trust manager in the Chicago area but also represented the country-club lifestyle of its wealthy clients. So hosting a (fairly tame) golf tournament in Los Angeles for clients would be a commonplace and expected perk provided by Northern Trust, using the tournament as a charitable fundraiser, as well as a chance to calmly pitch sales to customers.

In happier economic times, no one would blink at a charity golf tournament, yet in 2008, Northern Trust received $1.6 Billion in TARP funding from the Federal Government. Northern says it

“did not seek the government’s investment under the U.S. Treasury’s Capital Purchase Program, but agreed to the government’s goal of gaining the participation of all major banks in the United States”

which sounds accurate enough, but also has put it in a moral hazardous position. Certainly cost shifting goes on at every company, as it is impossible to totally separate one set of equity holder’s funds from another, despite what Northern claims. Golf, sports tickets, opera, symphonies are all a part of client marketing at Northern Trust (and other financial management companies) , with the implicit subsidy of the Federal Government.

So our esteemed Congressional leaders got wind of entertainment going on, they responded with typical sneering condemnation and a sniffy letter asking Northern to return funds it “frittered away” at this event. John Kerry (D-MA) went as far as to propose putting the Feds in the corporate hospitality business introducing legislation that “would prevent any recipient of TARP funds from hosting, sponsoring, or paying for conferences, holiday parties and entertainment events.”

This may have crossed the line between acceptable limousine liberalism and cutting into time spent on the golf course. The Democrats can tax all they want, but now they want to have some type of authority over whether you can go to the Symphony with your private banker. Especially damaging is the use of the term “fritter” which has been extinct on the North Shore for nearly 100 years. I do not think the people of New Trier Township will stand for it.

The simple solution is for Northern Trust to take the Feds up on their offer and pay back the TARP money tomorrow. While distressed banks faced collapse, Northern reported record profits of $342 Million last quarter adding credibility to its claims of not needing TARP money. Why not go about private business without the heavy hand of government telling us how to market financial services? What better signal that the solution to the economic “crisis” is found in the private market, not in higher taxes and more regulation from the Federal Government.

3 Comments »

  • Kevin said:

    Amen, get those grimey government hands off!!! Pay them back their socialistic dollars and move on!

  • Amy said:

    Amen. Amen. Amen. I wrote an email today to the CEO of Northern thanking him for taking a stand. We need the men and women who are the producers in this country to stand up to these Washington wingnuts. Why did we force those who didnt need it to take it ? Seems to me that they forced the money on them so that they could tell thesecompanies how to run their businesses – either that or as hush money.

    And for the record … if the GOVT was stupid enought to give it, I say keep it! After all, that what those these socialistic mortgage moochers will be doing – living fat cat easy – on my hard-earned dimes!!!

  • Northern Trust Hostage Crisis Enters Day Three: Media Steps In To Defend Tour And Sponsors | gs5 said:

    […] Powers says Northern Trust should give back the TARP money and keep on sponsoring golf […]

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