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VIDEONo Wells Fargo Wagons to Vegas
By
Scott Reeves Feb 04, 2009 10:30 am
Bailout money not to be spent on nickel slots.
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The bank cancelled a planned junket to Las Vegas only after the predicable outcry from the usual hectoring politicians concerned about the possible use of public money.
Wells Fargo is one of 9 banks to receive public bucks from the US Treasury. Despite this nettlesome fact, Wells Fargo initially defended the trip.
"In light of the current environment, we have now decided to cancel this event," the bank said in a press release, stressing that it never intended to use taxpayer money for the trip to Las Vegas.
It's not like condemnation for the planned trip fell from the sky. Anyone with half an ounce of insight would've seen it coming.
Lawmakers and the press have jumped on financial companies for continuing perks and hefty bonuses since Uncle Sam announced a $700 billion bailout in October 2008.
American International Group (AIG) was slammed for spending $440,000 on a retreat at the St. Regis Monarch Beach Resort in Southern California after pocketing a taxpayer-backed bailout. Four AIG top dogs followed up by traveling to England to go partridge hunting. The cost: a mere $87,000.
Such expenditures were just fine before the companies accepted federal bailout funds to stay afloat, but taking public money changes the rules. It's astounding that no one at Wells Fargo realized this, especially after the AIG flap.
Morgan Stanley (MS) has its ear to the ground and cancelled a planned employee-appreciation trip to Monte Carlo.
The danger is that Congress will use continued public-relations faux pas to impose new rules and regulations.
Wells Fargo said the trip to Las Vegas would've provided a "unique opportunity" to meet the employees of recently acquired Wachovia. Sure, but (write this down, Wells Fargo) not after grabbing $25 billion from the taxpayers. Next time, book a room at Motel 6.
Rampant stupidity seems to be part of corporate America's DNA. Coming next: a bailout for the Las Vegas casino industry, also battered by the economic downturn. Here's the back story: Wynn Resorts (WYNN) announced it will slash pay for salaried employees and reduce hours for others as consumers stay home. The decision by Wells Fargo to cancel its trip is just more bad news.
Wells Fargo is a well-run bank, despite recent losses. It has killer ads featuring a stagecoach and a team of steeds to underscore its Western heritage. Sad to say, it looks like the southern end of the horses are now making executive decisions at the bank.
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