Wells Fargo cancels Vegas junkets

February 3, 2009 9:46:11 PM PST
Wells Fargo has had a change of heart. It's apparently not the time to spend a fortune on a fancy trip to Las Vegas for its employees, especially not when you're taking bailout money.

The bank has taken a lot of flack over the trip. The company's last-minute decision to later cancel the trip was attributed to "scaling back because of the economic climate" according to Wells Fargo spokesperson Chris Hammond.

The trip was still a go, however, when ABC7 News spoke with Hammond earlier Tuesday afternoon.

"It's very important for us at Wells Fargo to recognize our team members for the great job that we're doing," said Hammond.

In this case, honoring Wells Fargo's top mortgage officers.

The big party was supposed to begin Friday. The bank booked 12 nights at the Wynn and Encore hotels in Las Vegas -- two of the most expensive on the strip.

In previous years, Wells Fargo held lavish retreats in Puerto Rico and the Bahamas. Its top officers were treated to private performances by Cher, Jimmy Buffett and Jay Leno. Hammond says employee recognition junkets like this are a tradition.

"We've had events like this going back at least two decades," said Hammond.

Most of Wells Fargo's customers we spoke with believe it's not a good idea.

"It would behoove the banks to show more discretion," said customer Cary Rosko.

"They can have fun, but they also should spend some of that money on the people," said customer Ronny Tarazi.

Bank of America just took a lot of criticism for its five-day Super Bowl bash, a move the bank defends by claiming they will make much more than the party cost.

Congress blasted insurance giant AIG for spending almost $500,000 on a spa retreat just after taking $85 billion in bailout money. But Wells Fargo counters that it's a healthy bank. It just paid a quarterly dividend of $371 million to the government.

Wells Fargo increased its lending in the fourth quarter by $70 billion, far more than the $25 billion it got in government bailout money.

Vic Lee: "So, Wells Fargo feels this is the right thing to do?"

Chris Hammond: "What is the right thing to do, Vic?"

Vic Lee: "The right thing is to hold this event in Las Vegas."

Chris Hammond: "Again, the spirit of recognition, absolutely. It's part of our culture."

Former labor secretary and UC Berkeley economist Robert Reich says banks need to realize they're now under intense public scrutiny.

"This is not the time for parties or bashes or celebrations because every dollar that they are using is needed to make loans or to keep going. That's what taxpayers expect," said Reich.

This was just one of several controversies brewing in the banking industry. Just last week, Bank of America confirmed that it was talking with the New York Yankees about a sponsorship with a new stadium. They have been criticized for that because they received about $45 billion in bailout money.


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