WASHINGTON - Wells Fargo & Co. abruptly canceled Tuesday a pricey Las Vegas casino junket for employees after a torrent of criticism that it was misusing $25 billion in taxpayer bailout money.
The company initially defended the trip after The Associated Press reported it had booked 12 nights beginning Friday at the Wynn Las Vegas and the Encore Las Vegas. But within hours, investigators and lawmakers on Capitol Hill had scorned the bank, and the company canceled.
The conference is a Wells Fargo tradition. Previous all-expense-paid trips have included helicopter rides, wine tasting, horseback riding in Puerto Rico and a private Jimmy Buffett concert in the Bahamas for more than 1,000 of the company's top employees and guests.
"In light of the current environment, we have now decided to cancel this event as well," the company said Tuesday night in a news release that also said the it had never planned to use taxpayer bailout money for the trip.
Of course, it gets even better. Wells Fargo spokesman Kevin Waetke said that the Las Vegas trip provided a "unique opportunity" for employees from both Wells Fargo and Wachovia Corp. "to focus on continuing to do all we can for U.S. homeowners."
Naturally, Congress had to get into the criticism:
"Let's get this straight: These guys are going to Vegas to roll the dice on the taxpayer dime?" said Rep. Shelley Moore Capito, a West Virginia Republican who sits on the House Financial Services Committee. "They're tone deaf. It's outrageous."
The trip was to come on the heels of this week's announcement that Wells Fargo lost more than $2.3 billion in the last three months of 2008.
"Now, they're sending employees on junkets to Las Vegas. You do the math," said New York Attorney General Andrew Cuomo, who recently sought information about Wells Fargo's bonuses as part of his investigation into the banking industry.
Pass the popcorn.
Hmmmm...well playing devil's advocate, there are two sides to every story. I get the criticism, but I would also like to have read Wells Fargo/Wachovia's explanation detailing spokesman Kevin Waetke's statement. As a Wachovia mortgage holder, I'm interested to hear what the continuing focus, "to do all they can for homeowners", will be....since Wachovia's loan modification program is today, much different than Wells Fargo's after this new merger.
ReplyDeleteButterfly:
ReplyDeleteHope you're having a good time in New Orleans--you are from the government and are here to help! In the case of Wells Fargo's Vegas party, I'm laughing at the whole PR fiasco Wells Fargo had gotten itself into by planning this Vegas party at a time when the U.S. economy is in a severe recession, scandals have come out on corporate executive excesses in pay, bonuses, and perks, and Wall Street is coming to the government asking for bailout money to cover their gambling losses on the subprime mortgage investments and derivative strategies. To make matters worse, this Wells Fargo Vegas party is a company "thank you" for their top mortgage officials. Whether these officials were involved in writing the subprime mortgages that originally got us into this economic mess is not the important factor here--it is the public relations image of Wells Fargo giving this Vegas party for their top mortgage officials in the aftermath of the subprime mortgage meltdown that makes the company look really bad. And now the PR-spin is that Wells Fargo was going to put on this party for their mortgage officials because they wanted "to do all they can for homeowners." I'm so sorry, but I just have to laugh at the audacity, and possibly the PR-incompetence, of Wells Fargo here.
But the loan modification program between Wachovia and Wells Fargo is a serious issue here. The merger has brought Wachovia's loan modification program under Wells Fargo's management, and I'm not sure if Wells Fargo will change the terms of such loans, or outright deny loans to applicants that Wachovia had originally accepted. It is a whole new ballgame here, and that could be scary for Wachovia customers.