Last week there was much fuss made about Northern Trust having the temerity to sponsor a golf tournament after having received TARP funds from the federal government. On Saturday, John Paul Newport--the Wall Street Journal's golf guy--attempted to restore rationality to the proceedings by explaining that Northern Trust was simply doing what businesses do best (sub req):
Building up business by developing closer relationships with clients is, of course, the main reason many companies sponsor golf tournaments. Northern Trust's agenda last week also included seminars for clients, such as one on the credit crunch. In undertaking such commitments, sponsors tend to be rigorous in their analysis of the substantial costs versus the benefits, just as they are for all marketing and advertising layouts. As business propositions, underwriting tournaments can make sense on many levels, especially for companies like Northern Trust, which cater to high-net-worth individuals and for whom personal relationships are central.
But never mind all that, because last year Northern Trust accepted $1.6 billion in Troubled Asset Relief Program funds, despite record profits of $795 million and a solid balance sheet. The bank, in a letter to shareholders this week, said it didn't seek the funds but accepted them to accommodate "the government's goal of gaining the participation of all major banks in the United States." Whatever the reason, taking the money changed everything. It turned all of the bank's business practices, especially those that smack of cultural excess, into red meat for politicians and others looking to direct public outrage about the state of the economy.
Within hours of the TMZ report, Rep. Barney Frank of Massachusetts wrote a letter to Northern Trust, co-signed by 17 others, demanding that it return to the federal government all the money it "frittered away on these lavish events" at the golf tournament. The New York Times op-ed columnist Maureen Dowd wrote a sarcastic column the next day headlined "I Ponied Up for Sheryl Crow?" Fox News commentator Bill O'Reilly hopped on the bandwagon Thursday, commending Sen. John Kerry of Massachusetts (an unlikely bedfellow) for proposing legislation that "would prevent any recipient of TARP funds from hosting, sponsoring, or paying for conferences, holiday parties and entertainment events."
This is another example of why I dislike O'Reilly. When the news of the Northern Trust "scandal" first broke last week and politicians like Barney Frank were scrambling for microphones to begin the ritual denunciations of yet another greedy company, Rush Limbaugh went after them hard, explaining what their real motives were and revealing their hypocrisy. Not necessarily an easy argument to make.
So what does O'Reilly do? He lazily throws in with the hoary rhetoric of the populist demagogues and embraces their mob mentality. All in the interests of looking out for "the folks" as he assures us. That sort of easily manufactured and stoked faux outrage is part of his stock and trade and I'm frankly quite tired of it.
The Northern Trust incident is yet another warning to companies that they should absolutely avoid taking a dime from the government if at all possible. While the cash may seem like a God send at the time, in reality it's a corrupt bargain, a deal with the devil. And we all know that the devil will get his due.
Once you enter into such a "partnership" with the government, you leave all of your business practices open to question and query. You get guys like Barney Frank poking and prodding around in areas that you would normally keep off limits to his ilk. Everything you do is subject to public exposure and criticism whether it be your sponsorship of golf tournaments, the off-site conferences you host, and even the money you spend promoting your company and selling your product through commercials.
A scene from "Goodfellas" comes to mind:
INT. MARTY KRUGMAN'S QUEENS BOUEVARD WIG AND BEAUTY SALON -DAY
ANGLE ON MARTY'S TELEVISION COMMERCIAL
WE SEE MARTY swimming the length of a pool, surrounded by adoring MODELS in bathing suits.
MARTY'S TV (V.O.): They'll stay put even in a typhoon. And I should know. I'm the president of the company.
WE SEE MARTY and HENRY standing near television set commercial is repeated over and over. MARTY is taking bets on the phone and complaining to HENRY. WE SEE an agitated JIMMY BURKE in BG poking at wigs and looking toward HENRY and MARTY
MARTY: (complaining sotto voice to Henry while taking bets on the phone) Jimmy's busting my chops. (into phone) Okay, give 'em eight to five on Cleveland. (hangs up phone and to Henry, while nervously eyeing in the other room) He wants three points over the vig. From me? I don't believe this s***?
HENRY: (pleading) Marty. Please. You know Jimmy. You borrowed his money. Pay 'em.
MARTY: (so outraged his voice gets louder) I didn't agree to three points over the vig.- What am I nuts? I didn't need it that much.
HENRY: (getting exasperated) What are you gonna do? Fight with him? He wants his money.
MARTY: F*** 'em. I never paid points. I always did the right thing. Did I ever bust his balls? Did I? Did I? I could have dropped a dime a million times, and I wouldn't have had to pay dick.
HENRY: (getting annoyed) Marty, you're talking crazy. Drop a dime? Call the cops? Don't even let anybody hear such bulls***. Hey, why don't you just pay the man his money and shut the f*** up.
WE SEE JIMMY in BG start toward HENRY and MARTY when he hears HENRY raise his voice.WE SEE JIMMY come up behind MARTY and wrap the long telephone extension cord around MARTY's neck. WE SEE MARTY's eyes begin to pop. WE SEE HENRY try to get his hands between the wire and MARTY's neck while trying to get JIMMY to stop.
JIMMY: (total fury) You got money for your bulls*** television, don't you? I gotta watch you swimming back and forth on TV all night long, don't I? You got money for that, but you don't have my money?
HENRY: Jimmy. He'll be okay. He's good for it. Relax.