--2 Bank That Handles Billions In NM State Assets Blows Millions On A Party (Updated)
         
Nov. 26, 2014

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Bank That Handles Billions In NM State Assets Blows Millions On A Party (Updated)

February 25, 2009, 12:00 am
By Corey Pein
We told you about Northern Trust, the Chicago-based bank that handles billions is assets for the state of New Mexico, back in January.

We told you how the bank has given tens of thousands of dollars to Gov. Bill Richardson's campaigns, and got its state contract after Richardson took office.

We told you how State Investment Officer Gary Bland thinks “Northern Trust is not doing an adequate job.”

All that was fishy enough. Now get this: Yesterday, the gossip site TMZ reported that Northern Trust, also a major beneficiary of the federal bank bailout, spent millions of dollars sponsoring a golf tournament at a Los Angeles country club. And that ain't the half of it. From TMZ:
- Wednesday, Northern Trust hosted a fancy dinner at the Ritz followed by a performance by the group Chicago [above].

- Thursday, Northern Trust rented a private hangar at the Santa Monica Airport for dinner, followed by a performance by Earth, Wind & Fire.

- Saturday, Northern Trust had the entire House of Blues in West Hollywood shut down for its private party. We got the menu -- guests dined on seared salmon and petite Angus filet. Dinner was followed by a performance by none other than Sheryl Crow.

There was also a fabulous cocktail party at the Loews. And how's this for a nice touch: Female guests at the Chicago concert all got trinkets from ... TIFFANY AND CO.

The Washington Post and others followed up the story today. From the Post:
In Washington, Democratic lawmakers on the House Financial Services Committee pressed Northern Trust President and CEO Frederick Waddell to immediately return the money spent on the outing to the government.

Eighteen Democrats on the financial services panel, led by Chairman Barney Frank, D-Mass., told Waddell in a letter, "We insist that you immediately return to the federal government the equivalent of what Northern Trust frittered away on these lavish events."

Frittered away? Barney—dude—we are talking HOT PROG ROCK, here.

Updated 5 p.m.-ish with state responses. After the cut:



We asked for comment from the State Investment Council and the New Mexico Board of Finance, which actually issued the contract.

Charles Wollman, spokesperson at the SIC, wrote back that "For what it's worth, I agree with you that it looks bad from an optics perspective with the current economy, but beyond that, I don't see how our opinion is really relevant."

Board of Finance Director Olivia Padilla-Jackson forwarded our question on to a subordinate, Nicole Gillespie, who serves as the board's information officer. Here is Gillespie's response:
The State compensates Northern Trust Corp. for providing custodial bank services, which means that the money the bank recieves from the State is earned revenue, not donated like the federal funds. As such, the State does not require Northern Trust to report on the uses of its earned revenue.
After soliciting competitive bids from multiple banks, Northern Trust has been the lowest cost provider for the past several years. The bank receives separate payments from four state agencies. The Board of Finance pays the State Treasurer's portion of the payment, which is approximately $69,000 per year.

I guess everybody's leaving the outrage to Congress.

 

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