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twitterWells Fargo defends, then reconsiders Vegas junket
Published Tuesday, Feb. 3, 2009 | 12:15 p.m.
Updated Tuesday, Feb. 3, 2009 | 11:33 p.m.
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Wells Fargo & Co. abruptly reconsidered a pricey Las Vegas casino junket Tuesday 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 the company had booked 12 nights at the Wynn Las Vegas and its sister hotel, the Encore Las Vegas, beginning Friday. But within hours lawmakers on Capitol Hill had scorned the bank, and the company said it was reconsidering.
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."
Because of the bailout and the recession, other banks have canceled employee outings, including Morgan Stanley, which informed employees Monday that an appreciation trip to Monte Carlo was off.
Wells Fargo, however, has not.
"Recognition events are still part of our culture," spokeswoman Melissa Murray said Tuesday afternoon. "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.
The weekend of Feb. 25, Wells Fargo's insurance division is scheduled to host a 40-person team for a two-day meeting at the Mandalay Bay Hotel, according to the Las Vegas Convention and Visitors Authority.
Kevin Waetke, another spokesman for Wells Fargo, defended the trip. He said the company, which recently acquired Wachovia Corp., had a long-standing tradition of recognizing top employees.
"This year, we have the unique opportunity to bring together our Wells Fargo and new Wachovia mortgage consultants to focus on continuing to do all we can for U.S. homeowners," Waetke said.
On Capitol Hill, lawmakers disagreed.
"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."
In previous years, top Wells Fargo 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.
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.
Morgan Stanley, another $25 billion bailout recipient, had been planning to send its top employees to a hotel in Monte Carlo this April. A Morgan Stanley travel agent said that the trip, along with a similar event in the Bahamas, was still on as of Tuesday afternoon. But company spokesman Jim Wiggins said employees were told Monday that the events were canceled. He said the travel agent was incorrect.
Bank of America, which recently purchased mortgage giant Countrywide and Wall Street financial house Merrill Lynch, said it has canceled all employee incentive trips.
"Given the current economic and business environment -- and to further align our interests with those of our shareholders -- we are making some difficult decisions to reduce or eliminate programs that do not directly impact our ability to serve our clients, customers and communities," Bank of America spokeswoman Kelly Sapp said in an e-mail.
Discussion: 21 comments so far…
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The Sun
Locally owned and independent for more than 50 years.
"Still part of our culture"
You have GOT to be kidding me. This entitlement mentality HAS to go!
it's part of a convention, if they moved it to Harrahs, Monte Carlo, NY NY or similar property it shouldn't be a big deal.
The culture is fine, it's just the expense of the culture which needs to be tweaked
How is this fine?
"traditions" end when bad things happen. The economy is in the toilet these guys are going on vacation thanks to a gov't bail out loan.
What is worse is that our Senator wants 4% loans for refi's and new mortgages. All these bankers will just collect more commissions, bonus's and parties off that deal. NOTE: I do support the 4% loan idea though. The problem is the baker idiots will charge 1% to originate the damn thing.
Just crazy.
Now this is a great LV bet: do you really think they are going to do this???
Why are y'all bitching about people coming to Vegas?
We need the tourists.
Has the Sun gone out of its mind?
If you don't what culture is you don't know what makes businesses work at all. A business is half culture. In this case their other half (leadership) let them down. You've got to keep culture intact if you ever want to rebound and be successful. Your braintrust leaves for greener pastures when you stop watering the grass...
What they really need to do is take a look at getting more value for their money instead of extravagance.
While incentive trips have been commonplace in the financial services industry, we have a new set of economic circumstances present. In spite of Wells Fargo Home Mortgage laying off people and cutting back at the branch level, the people at the top still do not seem to understand the need to change behavior. But then what would you expect from a Company (WFHM)that has two Presidents, and two National Sales Managers? Seems to be a redundant high cost,no?
Not to burst your bubble "jfnance32" but you're paying for this junket.Why don't you crash the party...after all we're ALL paying for it. How stupid can they be at this time... the FEDS should come down on them like a ton of bricks.
I hope everybody is happy.
They are going to cancel the trip.
Yes, let's write stories to make it shameful to come to Vegas.
http://www.charlotteobserver.com/597/sto...
I'll be happy when they pay back $25 billion they got from the government. But you have a point about Las Vegas needing the numbers. Lets hope the rest of our visitors dont do the same thing an start canceling trips because of the way it looks. We dont need all the conventions and expos to decide that Las Vegas no longer looks prudent enough to book.
Thank God....you are reading my main point.
Here is the Sun writing a story that basically says.....Vegas is soooooo expensive......you have to be an idiot to vacation or have business conferences here during this economy.
I hope that the writers even know that the Sun owners have a limit to their deep pockets to fun their hobby newspaper.
First Wells Fargo Bank is the one that didn't want any government money. They took it under pressure from the treasury department "because we don't want taking the money to taint those that do". Now that's good logic. Now coming to Las Vegas will be tainted for any corporation and that will help all of our incomes and home values. Thanks harry Reid and Pres Obama, your fixing our economy for good.
nance; what the heck article did you read?
nance... you continue to crack me up. The Sun didn't write the article... it's an AP piece. You can read the exact same article on cnbc.com, and I don't think Brian has much pull over there. Secondly, you need to look at the bigger picture and not totally focus on the local scene. Sure, the decision to not come here hurts the local economy, but we're footing the bill anyway. The initial decision by Wells Fargo typifies exactly what's wrong with corporate America. How can anyone in good conscience take charity and then run off and have a good time with it? It isn't that Vegas is too expensive or company's shouldn't reward their people for a job well done. The problem is that when your company gets a handout for $25B, you have to change the fundamentals of how you do business, and that includes not rewarding people for a job not well done and cutting back on all extraneous spending. And sorry... conferences in Vegas are nice, but not necessary. I'm all for rewarding employees for a job well done, but that should come out of profit. When you drop $2 billion a quarter and there's negative profit, exactly what are you rewarding your top performers for? For not losing $3 billion?
neiman... short of drilling for oil at the corner of Vegas Blvd and Sahara, what do you propose we do about the situation? You're really good at lobbing little morsels of disdain from the sidelines, but until I hear you put forth actual useful tidbits, your input will remain irrelevant with me. It's really easy to attack Reid and Obama for this mess, but your exalted ruler Bush didn't do us any favors over the previous 8 years either. Get over it. Your GOP lost big time, and now we're all having to sort out the mess from many years of neglect. But out of fairness, the crap storm we're in right now isn't the fault of any single party. It's taken the handiwork of both sides of the aisle to get to this point.
You two can complain about this being another example of Obama dropping your home value if you want, but at some point you're going to have to realize the inevitable. People don't need Vegas. And people certainly shouldn't feel obligated to come here. Things are changing. When things tighten up, recreational spending goes down. Vegas is, and always will be, a recreation destination. The sooner you come out of your state of denial the better off you'll be.
jfnance32: "we need the tourists"
Not when the tourists costs are paid for by US taxpayers who had no say in it.
We need those kinds of tourists like a moose needs a hat rack.
Hey Uncle Sham, cancel my contribution to the bailout. These crumbum banks and financial institutions are on their own - just like the rest of us. This kind of crap will lead to a revolution.
nance: Again, I don't understand you. You complain on here all the time about all the money and benefits that State (government) employees but this is OK with you? Either your thoughts are way out of whack or are you just putting things out there to see what you get back. Do you have a boat paddle in your hands just stirring things up?
The problem wasn't them coming to Vegas. The problem was that they are a company in the hole coming to Vegas on government money. And they are staying at the Wynn and Encore, which are currently two of the most expensive hotels here. It's not like they are staying at the Rio or the Golden Nugget and eating at $10 buffets. They are staying at top of the line hotels that are very expensive.
And FYI, the complaint isn't that Vegas in general is too expensive, it's that those properties are. Only a total idiot would not know that those two hotels are not catering to the middle class. Those two are there for the rich and people willing to blow thousands of dollars for a weekend.
And yeah, wondering, he is just stirring the pot.
To all those who are NOT in favor of Wells Fargo coming to Vegas - I couldn't agree more - Nance, you are the one who doesn't seem to 'get it'. If anyone's gonna have a good time in Vegas on MY dime it better be ME!
Who are the largest shareholders in Wells Fargo & CO.= The Maloofs.
Who owns the Palms Casino = The Maloofs.
Hmmmmmmmm.....