Bailed-out Wells Fargo plans Las Vegas junket Company spokesperson says event is part of the bank’s culture WASHINGTON - Wells Fargo & Co., which received $25 billion in taxpayer bailout money, is planning a series of corporate junkets to Las Vegas casinos this month. Wells Fargo, once among the nation’s top writers of subprime mortgages, has booked 12 nights at the Wynn Las Vegas and its sister hotel, the Encore Las Vegas beginning Friday, said Wynn spokeswoman Michelle Loosbrock. The hotels will host the annual conference for company’s top mortgage officers. The conference is a Wells Fargo tradition. Previous years have included all-expense-paid helicopter rides, wine tasting, horseback riding in Puerto Rico and a private Jimmy Buffett concert in the Bahamas for more than 1,000 employees and guests. “I was amazed with just how lavish it was,” said Debra Rickard, a former Wells Fargo mortgage employee from Colorado who attended the events regularly until she left the company in 2004. “We stayed in top hotels, the entertainment was just unbelievable, and there were awards — you got plaques or trophies.” While the nation’s recession has led other banks, such as Bank of America, to cancel employee recognition outings, Wells Fargo has not. “Recognition events are still part of our culture,” spokeswoman Melissa Murray said. “It’s really important that our team members are still valued and recognized.” Corporate retreats have attracted criticism since the bank bailout last fall. Congress scolded insurance giant American International Group Inc. for spending $440,000 on spa treatments for executives just days after the company took $85 billion from taxpayers. AIG has since canceled all such outings. Beginning Feb. 25, Wells Fargo’s insurance division is hosting a 40-person team meeting at the Mandalay Bay Hotel in Las Vegas, according to the Las Vegas Convention and Visitors Authority. Murray did not immediately have details about the size or cost of the events or what was planned. In previous years, top loan officers were treated to performances by Cher, Jay Leno and Huey Lewis. One year, the company provided fortune tellers and offered camel rides, Rickard said. Every night when employees returned to their rooms, there was a new gift on their pillows, she said. Wells Fargo Chairman Richard Kovacevich has traditionally greeted every employee personally when they arrived. Rooms at the Wynn and the Encore are consistently among the most expensive in Las Vegas. The $2.3 billion Encore opened in December as sister hotel to the Wynn. Its decor includes a 27-foot Asian dragon made from 90,000 Swarovski crystals and artwork by Colombian artist Fernando Botero. One of the restaurants features Frank Sinatra’s 1953 Oscar. Both properties have high-end retail stores, including Manolo Blahnik at Wynn and Chanel at Encore.
Is it not obvious what a disaster TARP is? These companies irresponsible spending has helped lead them down the path of needing cash in the first place.
Where is my bail out? I want government to pay my mortgage and I want vacations and I want party money!
God I hated Bush administration for making everyone take the money! If they don't need it, don't give it them!
but they took it, because that's the can of worms that TARP opened. it wouldn't be prudent for the gov't to only give it to distressed firms, and it wouldn't be prudent for a public company not to ask for free money. The gov't should have stuck to the plan of buying distressed assets. it may have taken time, but it could have gone to preventing this.
If the government didn't force banks like JPM and WF to take the money then there would be massive shorting and runs on the major banks that took the money. Buying distressed assets could not and will not work because a) there simply is not enough money to buy all the distressed assets, and b) the government will either be way overpaying for the distressed assets or will cause major insolvency issues for banks when they have to write down the troubled loans. Injecting capital was and is a better option because it can be leveraged.
It was actually that WF and JPM were pretty much forced to take it to reduce the stigma associated with taking bailout money. It was "free" money in the sense that it was extra money for those businesses, but they had to distribute preferred shares and pay annual dividends on that. If anything, this money would be the part that likely will be the most profitable part to the government and least beneficial to the banks. JP Morgan has already said they intend to pay the money back as soon as it's allowed because they really don't want it (3 years from when it was distributed, I believe).
well you answered my question to tulexan, but i still think they should have stuck to the original plan
Yeah - I don't really know which of those two options is most effective. I think Obama is planning to use the 2nd half of the TARP more along the lines of buying up bad assets, but it seems everytime they go that route, they keep running into snags (not sure what they are).
How do you decide how much to pay for the troubled assets? The models that priced them are worthless. And if you pay such a high price to ensure that banks won't run into liquidity problems after the writedowns, you will never get the money back and it will cost a lot more to buy all the troubled assets. Give the banks money to plug up holes in their B/S's and they can leverage the money 10x-15x. The plan they chose was the best one, the problem was that it was hastily written.
They should cancel the MFing trip. That "It is part of our culture" is one of the reasons the banks etc have been failing. If you are getting federal funds...tighten your belt like the rest of us. DD
