Bailout "party watch" catches Wells Fargo bank
First it was AIG being caught throwing not one, but two fancy resort events. There were the Merrill Lynch bonuses paid out even after dismal financial results and the need for taxpayer funds. This week we heard about Citibank paying $400 million to get the naming rights for the New York Mets stadium.
The latest bank caught spending questionably is Wells Fargo. The bank got $25 billion of taxpayer funds, and is celebrating with a 12 night bash at the Wynn Las Vegas and Encore Las Vegas. This high-end event is being hosted for the top mortgage officers, and Wells Fargo says it's a tradition to spend big on its best producers. The insurance division of Wells Fargo is holding a party of their own at Mandalay Bay in February.
There are, of course, excuses for this spending. In the past we've heard that the divisions throwing parties are not the same ones that technically received bailout funds. We've also heard that incentive programs for employees in sales positions are an industry norm and are required if a company expects to keep its best producers. No matter what excuse is offered up, it's a little hard to swallow a vacation at a swanky resort when the average Joe is essentially financing it with bailout funds.
There's something that doesn't sit right with me when corporate welfare is needed but expensive parties and retreats are being thrown. Either Wells Fargo (and all the other financial institutions guilty of similar behavior) needs taxpayer money or they don't. And if they need taxpayer money, they better trim everything down to the bone and be good stewards of the gift we the taxpayers have given them.
UPDATE: Wells Fargo announced this evening that the Vegas vacation is being canceled. Yes, it's the right thing to do. But make no mistake that they wouldn't have made that move if the vacation hadn't been exposed in the media.
Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.